Among the casualties of the pandemic: The gig economy. As estimated by PYMNTS, 40 percent of gig workers have lost at least $10,000 of income since the start of the pandemic. That implies a sizable economic impact, considering that 53 million individuals in the U.S. are gig workers.
On a good day, or in a good month, the nature of gig work can charitably be called volatile. In the current economic climate, the steady work — and steady paychecks — proves elusive. At times, gig workers have to tap into alternative (and sometimes expensive) financing sources.
To that end, as Steady CEO Adam Roseman told Karen Webster, platforms can help gig workers find steady work, and set and achieve financial goals at the same time — a combination of job search and money management.
Navigating The Platform
The platform seeks to help freelancers find flexible and project-based work, searchable by location and job interest — and they can select jobs that dovetail with desired income levels. In terms of navigating the site and its choices across freelance and financial wellness opportunities, individuals sign on to browse through work-from-home, full- or part-time positions or “anytime” work. They can also sign up to create accounts that track all earnings across various workflows. Elsewhere, “Steady Income Boosters” offer incentives for users to sign up with, for example, Postmates, and receive cash payments directly to their bank accounts.
Of the ability to push those incentives directly to bank accounts: “What we have now is ACH and integration with our bank account linkage too,” Roseman explained. “If they complete one of those boosters, it’s going to serve to improve their financial health. They can receive that cash from us immediately — and it may prevent users from needing to go out and borrow funds.”
Roseman described the Steady app as a “one-sided marketplace,” where the firm is not paid by the employers (other than the income boosters). As he told Webster: “The financial services and benefits marketplace for us really is, is two things. One is, it’s a mechanism for us to monetize given that we’re not monetizing the employer. The second is the fact that we’re looking at jobs as revenue.”
For low- to moderate-income workers, he said, the decisions about where to work, how to spend one’s time, and of course, the income coming in are critical ones.
He said that leveraging data that can be used for expense management can be used by gig workers to increase their personal incomes or top lines.
Though Steady traces its top line to helping people solve the challenges of underemployment, Roseman said that the end-of-month expiration of additional unemployment benefits ($600 a week) through the CARES Act presents new opportunities for the company, which has 2 million workers on its platform and insight into verticals as far-flung as food services and transportation.
Looking For Primary Income
“You’re going to have 40 million people whose primary use case is going to be finding primary income and supplemental income,” he said.
Even with unemployment insurance, overall income for a significant percentage of Steady’s workers is down 25 percent, and without that boost would be down as much as 50 percent.
To drive personalization and access to the platform’s job search and financial management offerings, he said, Steady requires users to link bank accounts to the platform through data aggregator Plaid. Through that connection, Steady offers an income tracker that can help gig workers gain personal finance insight, manage expenses, and plan for tax season.
Upcoming features will let users set income goals each month. Expense management is especially critical, where 32 percent of Steady’s base is generating overdraft fees or roughly a third are using cash advance services.
Looking ahead, “there’s a massive pool of workers with very shared challenges right now that don’t have the ability to aggregate purchasing power and to drive that collective bargaining and positive change,” he said.
Drilling down a bit, he said there had been growth in non-discretionary retail, while grocery delivery has peaked (and some grocers are opening back up). From an expense-management side, it’s not sustainable to keep ordering from restaurants. There also is growth in contact tracing positions and work from home customer support services.
“There are have a lot of people who come to our platform because they are not making enough money from primary jobs to save for retirement, save for a down payment on a home, build a safety net. There are a lot of those products that tie into earning extra income that are appropriate for them,” he told Webster.