How The MENA Gig Economy Provides Global Lessons

The gig economy — and digital marketplaces designed to service gig workers and employers — is where so much of the action is these days. Payments and other forms of innovation and disruption are taking place as the gig lifestyle spreads across the world and seeps ever further into the daily lives of consumers while becoming more critical to business.

However, nothing is easy in life (your parents were right) and that nugget of wisdom served as a central theme of a recent PYMNTS discussion with Rakan Alhassan, operations and marketplace director at Ureed. The company matches freelance writers and translators — he described Ureed as a one-stop-shop for linguistic needs — and has a focus on the Middle Eastern and North Africa region (MENA). Of course, difficulty does not equal despair, and the lessons and experiences offered by Alhassan can surely serve other operators in this ecosystem, and even other parts of the payments and commerce worlds.

Among the main challenges? The reliance on cash in many of the markets served by Ureed, Alhassan said. “The credit card penetration in Saudi Arabia is around 35 percent for the whole country — a country known for being one of the highest in the Arab region for eCommerce,” he told PMNTS. Indeed, cash-on-delivery remains a popular option for digital consumers. Moreover, many consumers remain without formal access to traditional financial services. In Jordan, for instance, more than 60% of the population is unbanked, he said.

Payment Lessons

“For someone to enter this market,” he said, “they need to ensure that whatever they have on offer is extremely convenient — no account setup and data filling, and easy to use and straightforward.” He pointed to Algopay as a positive example of that. As Alhassan told PYMNTS, it’s a “company that specialized in facilitating mass payouts with no need to set up an account, and you simply use your email to collect the cash from any exchange house. It’s similar to Western Union but cheaper, and with less complications and requirements.”

Ureed offers that payment method, along with PayPal, Payoneer and direct bank transfers. “Cash on delivery is king in our region, but with additional security features like two-factor authentication, 3D secure to prevent fraud on credit cards, more people are building trust with using their cards and paying online,” he said.

That’s hardly the only challenge when it comes to doing more in the gig economy, expanding marketplace offerings — and generally doing more digital cross-border commerce. Even as English plays its role as the lingua franca for the world’s professional class and ambitious young workers and thinkers, the fact remains that language is still a significant barrier. That is undoubtedly a problem that Ureed must deal with — but it’s also an opportunity.

“The linguistic market in MENA is extremely fragmented,” he said. “But there’s plenty of hidden talent and a talent pool that can serve the globe rather than locally only. This is why we created Ureed as a marketplace to bridge that gap between the freelancers and employers.”

Global Gig Trends

The PYMNTS discussion with Alhassan came amid significant growth and changes in the world of gig workers and employers, and the digital marketplaces and services that focus on this part of the global economy.

Earlier this year, PYMNTS research found that gig workers’ earnings were estimated to exceed $1.7 trillion. In the study, workers who sourced their gigs via such platforms were more likely than others to receive compensation via PayPal and direct deposit, and less likely to be paid via cash or check. The survey, which was conducted in Q3 and Q4 2018, found that digital marketplaces like TaskRabbit, Uber and Airbnb play a critical role for gig workers, primarily — but not across the board — for skilled, nonseasonal workers.

There’s more, and it relates more specifically to Ureed: In Q4 2018, there was a jump in nonseasonal workers sourcing gigs via digital marketplaces (38.4 percent) while seasonal workers had lower usage throughout 2018, which dipped in Q4 2018. It might seem counterintuitive that seasonal gig workers would use digital marketplaces less during the holiday season, but this likely reflects the different types of jobs available through digital marketplaces.

Ureed offers a good view of some of those gig economy trends.

“We’re finding a lot more interest by millennials and Gen Z users, [who are] leaning more toward the idea of being independent and freelancing to earn money on the side or simply make a career out of it,” Alhassan said. “Previously, freelancing was looked down on as a career path. However, the gig economy is on the rise and the realization that you can and will make money if you have the skill set and know-how to market yourself, you can simply make more money than as [a full-time employee].”

The gig economy is a massive global force, and despite all those challenges, there remain increasing opportunities as well.