Businesses and consumers still see the new coronavirus’s reverberating effects upon their finances and lives. Gig workers have been particularly affected by the pandemic, as many saw their opportunities for work dry up and disappear over the past few months amid stay-at-home orders and social distancing protocols.
The United States government has attempted to offer relief through its federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, which opens unemployment benefits to self-employed individuals. Just 40 percent of full-time freelancers are eligible for support, however, leaving many tapping into their savings. At the same time, they wait on overdue payments from companies and try to find new projects to pay their bills.
In the latest Gig Economy Tracker®, PYMNTS examines the COVID-19 pandemic’s continued impacts on the freelancer economy, as well as how outdated invoicing and payment processes employed by the companies that hire them can contribute to these individuals’ financial strains.
Around The Gig Economy Payments World
The COVID-19 pandemic is keeping individuals in their homes, and many are thus ordering their meals for delivery rather than making trips to grocery stores. Rideshare firm Uber has expanded its Uber Eats food delivery platform to its Uber for Business clients after noting a recent increase in their orders. The platform hopes broadening the reach of its food delivery platform will help its drivers and couriers pick up more orders and thus pad their monthly incomes, too, as many who drive for its rideshare platform have seen fares dwindle since the outbreak began.
The pandemic is also adversely impacting freelancers in the travel industry, including those who earn money by renting out their properties on homesharing websites like Airbnb. Travelers who had to cancel planned trips are now requesting refunds from the platform and its hosts, but the latter claim they are receiving limited shares of funds from cancellation fees — with some noting that they have not yet received any at all. Airbnb has stated that some of its payments may be late and has created a $250 million relief program to send those funds to these expectant hosts.
The U.S. government is also doing its part to help gig economy participants who are currently experiencing financial struggles. Its Small Business Administration (SBA) opened its Paycheck Protection Program (PPP) to self-employed workers like artists, electricians and small business owners on April 10, for example. The money distributed from the PPP could help these workers at least meet their rent bills for up to two months, providing some much-needed relief for those who are not seeing new work opportunities during the pandemic.
For more on these and other stories, visit the Tracker’s News & Trends.
How Gun.io Speeds Freelancer Payments For Improved Talent Retention
Freelancing is attractive for many reasons, including workers’ ability to collaborate with multiple companies, try out new projects and create personalized work schedules. Gig workers are searching for stability rather than flexibility in how they are paid, however. This is especially the case for freelancers in competitive areas like coding, programming and software design, explained Teja Yenamandra, founder and CEO of software and programming freelancer website Gun.io. Keeping payments simple and speedy is key to keeping such workers satisfied with their job sourcing platforms. To learn more about the growing importance of fast, steady payments, visit the Tracker’s Feature Story.
Deep Dive: Using Automation To Solve Slow Invoices
Seventy-one percent of freelancers claim they have worked with companies that have either paid them late or not paid them at all. This missing money can have damaging effects on gig workers’ finances, especially while businesses are shut down due to the COVID-19 pandemic. Many delayed payments are caused by time-consuming or outdated invoicing processes, as companies’ accounting personnel need to manually input dozens of details into their systems and have them approved by multiple parties before they can be finalized and sent out. Finding ways to innovate invoicing and pay freelancers at speed is thus critical for companies that want to retain lasting and satisfactory collaborations with their gig workers. To learn more about how slow invoicing can impact freelancer relationships, 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 freelances and partner services are responding to shifting financial and payment needs.