Gig Economy

How Smart Algorithms Deliver Faster, Secure Gig Payouts

Freelancing has become an attractive source of income to a wider percentage of Americans in recent years, with 36 percent having conducted ad hoc work either part-time or full-time. The U.S. is not alone in this trend, with a rising number of workers in countries like Poland and the U.K. freelancing for their own financial or work needs.

However, challenges have begun to arise as the gig economy continues to expand globally. Regulators around the world are passing new laws to make sure ad hoc workers are properly protected, and some of these rules could have sweeping implications for businesses and their freelance partners.

Aside from staying compliant with existing and emerging regulations, businesses must also work toward removing payment friction points as gig workers increasingly expect to be paid for each of their completed projects promptly. Relying on outdated payment methods could mean these freelancers will simply work for another company, rather than wait for checks to arrive in the mail.

In the latest Gig Economy Tracker, PYMNTS examines how developing regulations around freelancers are affecting the future of work, as well as how they might be impacting the way ad hoc workers are paid. The Tracker also analyzes how payment technologies and methods may be changing to keep freelancer needs met.

What’s New In The Gig Economy Payment World

The most sweeping of these rules in the U.S. has come out of California, where Assembly Bill 5 (or the gig economy rule, as it is better known) is having a major effect on the future of ad hoc work. Many in-state creative freelancers — such as writers, editors or photographers — have expressed concerns over how the regulation applies to the way they work and get paid, as the bill places a cap on how often they can submit to one publication. Eighty-eight percent of freelancers who fall into such creative categories opposed this submission limit, according to one survey. This is only one of several shifts to freelance work in the state under the bill.

Lawmakers in other U.S. states are developing similar regulations. New Jersey became one of the more recent states, for example, with its regulation designed to make freelancers and independent contractors legally distinct from self-owned businesses and other such organizations. The law seeks to make sure that each group receives the benefits that best apply to their designations.

Companies that rely heavily on freelancers are also making changes to comply with such regulations. Ridesharing company Uber, for example, announced several updates to its platform to remain compliant with California’s rule. The company will make significant changes to its payments structure, now charging users based on time and distance, similar to the way taxi companies traditionally charge their riders. Uber has also adjusted the fees it will be charging per ride, moving to a flat fee structure.

For more on this and other news, visit the Tracker’s News & Trends section.

How misterb&b Approaches Homesharing Payment Challenges

Homesharing was one of the earliest ways for consumers to participate in the larger sharing economy, and has grown into one of the most competitive. Consumers looking for places to stay on vacation are coming to platforms with more personalized needs, while homeowners now have their pick of marketplaces when looking to rent out their properties.

One of the major factors weighed by owners when making that choice is how they will receive payments from guests, which is why it is critical for intermediary platforms to make sure home owners can receive payouts both easily and securely. Francois de Landes, co-founder and chief operating officer for LGBTQ-focused global homesharing platform misterb&b, explained why enabling access to fast and secure payments has become key to engineering trust and how the company is utilizing machine learning and smart algorithms to help achieve that.

To learn more about how misterb&b is streamlining and securing payments to keep both sides of its platform satisfied, visit the Tracker’s feature story.

Catching Up On The Freelancer Payment Curve

Freelancers will make up a significant portion of the global workforce over the next few years, with 43 percent of workers in the U.S. alone expected to participate in this type of work in some form by the end of 2020. These individuals expect the companies they work with to pay them promptly and without friction, which can be difficult to achieve when businesses rely on outdated financial tools to process freelancer invoices.

These payments grew even more complex over 2019 and the early months of 2020, as states and cities began to pass laws that radically changed the status of some ad hoc workers, and how they can receive payments. These shifts in the regulatory space make it all the more important for companies to stay up to date on how they must enable access to ad hoc worker payments.

To learn more about how businesses can further upgrade their payment processes to satisfy freelancers, visit the Tracker’s Deep Dive.

About The Tracker

The Gig Economy Tracker, powered by Tipalti, examines the latest changes to payments in the gig economy, and how freelancers and partner services are responding to shifting payment needs.

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NEW PYMNTS STUDY: LEVERAGING THE DIGITAL BANKING SHIFT – SEPTEMBER 2020  

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