For a growing number of workers, the ideal workplace is home — and the perfect employer is not one, but many. Welcome to the flexible workforce, nurtured by the emergence of digital work platforms like Uber, Deliveroo, and Task Rabbit, and accelerated by the Covid-19 lockdowns of the past year. Given trends, this could also be how more of us will work in the future.
But if the pandemic has accelerated the shift toward the flexible workforce, it has also exposed its vulnerabilities. The economic slowdown of 2020 hit freelancers hard: 50% worldwide reported job losses, according to Fairwork, which tracks the platform economy.
Therefore, it’s only fair that those of us who enjoy the fruits of the flexible economy — including cheap rides and home deliveries on demand — take interest in their well-being. We must ensure these workers have access to some of the same safety net protections that traditional employees receive in a civilized society.
The rise of the so-called “gig economy” is undisputed. Last year, the European Commission’s Joint Research Center estimated that 11% of European adults have provided services at least once through a digital platform. A study commissioned by Mastercard expects the sector to grow 17.5% annually, representing $455 billion in global activity by 2023.
The European Commission has been closely monitoring this tectonic shift. This year, the Commission opened two consultations with trade unions and employers’ organizations and social partners on improving work conditions for people employed through digital platforms.
Policymakers are exploring ways to provide the flexible workforce with protections defined by its European Pillar of Social Rights — which promises secure employment and fair wages, access to a minimum income, a right to social protection and to adequate unemployment benefits, work-life balance, social dialogue and life-long learning. What’s important is to strike the right balance — providing a better safety net, while nurturing the innovation that companies like Uber, TaskRabbit, FarmDrop, and others have brought to market.
Of course, innovation often results in disruption — and in this case, disruption of the traditional employment contract. If we want to maintain the social contract that Europe is known for, we must design an equally innovative set of labour policies for the future of work.
At Mastercard, we’re eager to work with policymakers, platform companies and the many other stakeholders — because we believe we can provide the innovative tools to begin building a safety net for the flexible economy. Working with Xynteo and Europe Delivers, a business coalition committed to sustainable growth models, we convened more than 60 flex workers, businesses, tech entrepreneurs, labor groups, universities, and NGOs earlier this year to gain insights — and potential solutions — to the challenges flex workers face. The workers celebrated their independence to choose who they work for, where they work and how much work they do. But they also described the downside of the flexible work economy — fickle clients, long payment cycles, uneven cash flow, and struggles to get credit and health insurance.
Mastercard is already a financial intermediary between many employers and flex workers and we can build a platform to address many of the needs of employers and workers. An innovative website or app could enable employers to pay their freelancers almost immediately. Mastercard already provides such a service to Uber and Lyft drivers, giving them instant access via card to the money they earn, rather than having to wait days or weeks under traditional payment systems.
This only scratches the surface of what we can do. An “income smoothing” program driven by artificial intelligence could shift income during boom times into a saving account that workers can tap when the work slows. AI could also drive a credit-rating system that takes into account the seasonal and intermittent nature of flex work, easing the ability of business owners to get loans. Workers could also receive personal finance content, including primers on business skills like pricing and budgeting.
We believe that a standardized payments platform would make it easier for employers to work with financial service providers to provide the customized banking, savings, credit, insurance and educational services their workers desperately seek. We’re ready to start the conversation on how to give flex workers the support they need.
Mark Barnett is President of Mastercard Europe.