Gig Workers Benefits and Protections are for Life, Not Just for Pandemics

by Dianne See Morrison for insuretech startup

A 300-year-old industry, with the help of tech, can build the safety net gig workers need and deserve.

Ever since Uber sent its first cars onto the streets of San Francisco in 2009 to test a business model that grew into the gig economy, we have been shifting millions of workers into a new reality of employment. They gained the freedom to set their own hours but gave up protections and benefits to be their own boss. In the early days—when wages were higher—that tradeoff seemed fair, fuelling the gig economy’s dramatic rise, which by 2018 was worth $4.8 trillion globally, according to Staffing Industry Analysts.

Then came Covid-19. The pandemic exposed the brutal reality of gig work without a safety net: stop working to self-isolate, and you lose weeks of income; keep working while sick, and you risk your health—and everyone else’s. Governments and companies scrambled to respond. In its March 11 budget, the government announced £500 million in support for the self-employed. But workers had to claim universal credit, which could take five weeks to process and paid out just £94.25 a week—a little over £13 a day.

Food delivery company Deliveroo pledged to pay “in excess” of statutory sick pay for workers who contracted the virus or had to self-isolate but gave no clear figure. Meanwhile, delivery firm Hermes set aside a £1 million emergency fund, yet affected workers would receive just £20 a day for up to 14 days, and only if they earned less than £90 a day.

It all felt too little, too late.

Gigs Up

Covid-19’s disruption has made one thing clear: for the past decade, as the gig economy has boomed—bringing consumers convenience and workers jobs—we have dodged the tough questions. Where is the financial safety net for gig workers? Whose responsibility is it to protect them? And how can they protect themselves?

If self-employed people cannot work, should they have to rely on the welfare state? Should taxpayers shoulder the cost of protecting workers whose labour fuels gig platforms’ revenues? If responsibility is shared between the government, businesses, and workers themselves, where does the balance lie?

These questions can’t be avoided any longer. The gig economy is here to stay. The platform model hasn’t just rocked lower-wage industries—it has infiltrated higher-paid professional sectors, adding doctors, lawyers, management consultants, and accountants to the growing roster of gig workers, often without the security that once defined these careers. Yet the emergency measures introduced during the pandemic remain just that: temporary fixes for a crisis. Sick pay and worker protections can’t be a short-term patch for extraordinary times. They need to exist 365 days a year—not just for 14 days when a pandemic strikes.

Today’s regulations are nowhere near adequate to protect those toiling in the gig economy — or freelancers — when misfortune strikes. Proposed political solutions, such as universal basic income or a “gig minimum wage,” are not only impracticable and unaffordable for the government but also fail to keep pace with a rapidly changing workforce.

Traditional insurers have also failed to adapt. The world has changed, but insurance policies have not.  It seems obvious that products should evolve as new markets emerge, yet traditional insurers have been slow to modernise both their offerings and distribution channels. The result is that even the professional sector of the self-employed often lack insurance cover because the current market options are inappropriate, inaccessible and unaffordable. 

Pool Party

After three centuries of next to no innovation in the insurance industry, technology can finally deliver a solution that is accessible and affordable and tailored to the specific needs of the self-employed. Current insurance products for the self-employed  are prohibitively expensive, because each self-employed person is risk-assessed individually, rather than having their risk pooled in a large group like employees. Even worse, many policies don’t pay out on day one. In fact, most require workers to be sick or injured for a month or more before coverage kicks in—completely impractical for gig workers who rely on immediate income. That’s why we’ve created sick pay insurance designed for gig workers from day one. Our tech platform pools risk at scale, reducing costs and making coverage accessible. For less than the price of a weekly coffee, gig platforms can provide workers with real income protection—without waiting for regulators to catch up.

Long before Covid-19 made going to work a life-or-death choice, gig workers were already sounding the alarm about their lack of benefits. Gig platforms have a crucial role to play in shaping how the world’s fastest growing workforce is treated. If the leading gig-economy platforms combine forces with the public and private sectors, we can quickly and effectively build a real safety net for the self-employed—before the gig economy’s workforce is permanently left behind.

(Originally written as an opinion piece for an executive).