In this new age of self-employment, who do you work for? A company? A Platform? Your own business? Self-employed? Freelance working? All of the above?

Multiple mobile applications (Apps) are creating a vast amount of jobs and creating new opportunities for people looking to try new things and break the norm or even get back into work.

Most of these App companies don’t actually employ these people and the people are counted as free lancers, gig workers or self-employed. The Apps just “facilitate orders” or “requests”. They are a ‘platform’. Uber is the largest taxi company in the world without employing any drivers. AirBnB is the largest hotel operator that not only does not own hotels but does not employ cleaners, catering staff, concierge or maintenance teams.

If you operate through these companies and ask them “Are you my boss?” or “Are you employing me?”, their answer will most definitely be NO! But if you ask the people on the other hand “What job do you do?” They will usually say I am a driver for Uber or Lyft, or say I am a host for AirBnB. There is an attachment here, but there is also a change in the way people see the role of the company. It is a new way to represent yourself – you are freelance – self-employed – but you have 1, 2 or 3 or more jobs.

What feels like a life time ago now, before mobile Apps, when people said “I’m self-employed” they usually owned and ran a small business, for example tax accountant or builder. One part of being self-employed was giving out your business a name like Smith Accounting or Big Build Construction.

Now it’s not the same, people don’t have the chance to personalise their services and own the ‘brand value’ they now promote the App. When you’re self-employed with your own business the success or failure of the business can be based on your success. But if the App that “facilitates” you goes bust or is merged or just stops, where do you stand?

Let’s say you’re a driver for a company called ‘ZOOMCarApp’. You have been successfully driving (self-employed, freelance working) for 3 years. You have completed 30,000 trips and you have an average of 4.8-stars, awesome! But what does this mean for you? What can you do with this?

Can this data be transferred when changing companies or finding a new App to work with or a new role? What of this do you own?

Whose ‘reputation’ is it really?

When you want to start on a new App or change roles or add a new skill and go to an interview with a new App or employer you maybe be asked what you have been doing for the last year(s). What do you say? “I have been self-employed” “I’ve been freelance working” Great! What client references do you have. Can you hand over your ‘stars’ what do they count for?

What can Apps do to help? How can they support people when leaving the App or starting on a new App? Who really owns the person’s 5-star rating?

Tech companies also have huge amounts of un-published data, how can that data help people? Rating a driver 1 to 5 star goes deeper – is it just 4.2-stars, or is it 3,000 jobs at 5-stars and 20 at 2-stars over a period of 1 year and the driver showed great attention to detail and managed to improve and achieved 3 months at constant 5-star on 500 jobs?

Here at MIC Global we believe that DATA is the key to building a better, more flexible and transferrable workforce and insurance can be a way of building an real asset linking your data in a multitude of Apps back to your policy, allowing you to own the rating you have built up.

The world of employment is always changing, however today there is an acceleration towards people looking after their own hours and becoming more flexible. The sharing and gig economy is here and we are providing sharing economy insurance around these new businesses.

Two large surveys have been undertaken in the UK and USA about the Freelance or GIG economy, apparently it’s preferred now to call it the Freelance Economy, both surveys released earlier this year, 2017.

1. Freelancing in America Survey by the Freelancers Union and the giant freelance platform Upwork.
2. Good GiGs Survey By The RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce).

The surveys show that freelancing continues and stunningly suggests that by 2027 a majority of U.S. workers will be freelancing. UK freelancing is to growing apace with many peer to peer platforms driving this change and access. This is a great opportunity for development of new services such as insurance.

The current mix of work being undertaken by the freelancers is:

• Professional, creative or administrative services 59% of workers
• Skilled manual or personal services 33% of workers
• Driving and delivery services 16% of workers

The growth in technology platforms has made it easier to find work and to present yourself or your business as a freelancer. Platforms such as Upwork, People Per Hour, AirBnB, Uber easily come to mind but these are just a few of the many new platforms available.

While freelancing is a part-time or side gig for many respondents, a growing number are making a living freelancing. In the US, 29% of freelance respondents said their businesses are their sole source of income. That percentage rose by from 17% in 2014. The main drivers for full-time freelancers, the survey found, are freedom and flexibility. The demand for this type of work has accelerated over the last few years and shows little sign of slowing down. The UK survey found that young people (aged 16-30) are particularly attracted to the idea of freelance work – one in four said they would consider some form of it in future. Given this enormous potential for growth its time now to think of how platforms can become a catalyst for fair, fulfilling work in the modern labour market. There are challenges as to how to respond to the impact of freelance work.

There are views camps forming; One view is that government and business should be actively encouraging innovation and supporting platforms to scale. These people are the champions of platforms as progressive and liberating, highlighting workers newfound freedom and flexibility; The other view is that companies and government must keep standards, and thus be active when it comes to the practices and processes of platforms using self-employed workers, the fear is a race to the bottom in terms of pay and conditions.

Another view is that there is a middle ground, again lead by markets and companies that want to protect and manage their risk. The companies will lobby for change in employment and standards. These changes will again lead to updates in how local authorities and governments act. The platforms need to keep both the customer and the professional (the freelancer) happy, they need BOTH parties to be there. The freelancer has as much choice as the customer. It puts the difficulties of regulation into perspective; since there is no universal experience within the gig economy, government must carefully weigh many trade-offs for workers in deciding whether to intervene and, if so, in what way.

Insurance is the traditional way to protect against employment and business issues and over the many years the industry has developed products to protect both employees and businesses alike. The industry is intertwined with employment and commercial regulation and law and their products are distributed and bound in the old and outdated practices of the insurance industry.

Today the focus of the industry is still on the annual policy, renewal books, bundled policies and manual claims processes. Technology is not a strong suit of the industry. The industry is changing on the fringes and there are start-ups and partnerships forming to improve its technology and financial performance and to face up to the revolution that is taking place in the platform businesses.

Reference

1. Freelancing in America Survey by the Freelancers Union and the giant freelance platform Upwork.
2. Good GiGs Survey By The RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce).