FinTech 1099 payroll platform Gig Wage has announced its partnership with national nonprofit Commonwealth in a new project aimed at addressing the financial insecurity of the growing non-traditional workforce. With the gig economy in the US growing by an estimated 33% since the start of the pandemic, the research will ultimately help drive sustainable change at scale to ensure that gig workers have the financial tools to achieve financial security and opportunity. The project is being funded in part by Green Dot Corporation (NYSE: GDOT), a lead investor of Gig Wage.
“At Gig Wage, our number one priority is to deliver economic empowerment to our customers and their 1099 contractors, many of whom live not only paycheck-to-paycheck but sometimes gig to gig and have been ignored and overlooked by traditional payment and banking models,” said Craig J. Lewis, Founder and CEO, Gig Wage. “We are working feverishly to understand the effects of income sufficiency and stability on these groups and build technology that helps as many people as possible. We’re excited to be collaborating with Commonwealth and Green Dot on research that will result in new insights into how we can better support the growing gig workforce and ultimately help guide us toward our mission to bank the entire gig economy.”
The income volatility faced by gig workers, which became even more pronounced during covid-19, has revealed unique financial challenges for non-traditional workers that disproportionately affect lower-income Black, Latinx, and female workers. Gig Wage and Commonwealth’s joint research initiative will study the effectiveness of strategies to bolster household incomes and reduce income volatility. The project is designed to understand strategies that can be implemented at scale to positively affect the financial security and inclusion of gig workers long-term.
“Financial security for non-traditional workers is a continuous challenge in the quickly expanding gig economy,” said Timothy Flacke, Co-Founder and Executive Director, Commonwealth. “The economic uncertainty and extreme income volatility of this labour force has been exacerbated by the pandemic. Through this research, we will continue to develop innovations and insights that drive the systems change we need to address these workers’ unique financial challenges.”
The pool of primarily Black, Latinx, and female gig workers involved in the study will be sourced by Gig Wage from its proprietary tech that is used to pay contractors. Green Dot, which also serves as the infrastructure bank partner enabling Gig Wage to design and deploy customised banking and money movement solutions for the growing customer base, has provided an investment that will help expand the pool of participating gig workers in this study.
“The growth of the gig workforce, and the unique challenges that have come with it, offers tremendous opportunity for fintechs to make these workers’ lives better,” said Dan Henry, President and CEO, Green Dot. “We’re proud to support Gig Wage and Commonwealth in the advancement of financial security and inclusion for these workers.”
What is Gig Wage and how is it different?
The Fintech Times sat down with Gig Wage’s CEO, Craig J. Lewis, to get a deeper understanding of the company and what set it aside from the rest of the market.
Gig Wage is a B2B2C company, looking to help the 10, which directly leads to helping the 10,000. Lewis said, “When you think about the gig economy, everybody thinks about the 10,000 drivers for the organisation, making sure they get their money fast and flexibly, and we do too, but we do it through the 10 people at the company responsible for paying the 10,000.
“We look at the 10’s challenges: why have they struggled in the past to deliver a fast and flexible service – be it compliance or operational challenges – and we solve these problems. The outcome is still the same, the workers get paid on time but we help the paying company organise this by sorting out operational inefficiencies, whilst also dealing with things ranging from W9 to 1099 compliance for the company.
“We lead with a third party mentality first, building our technology and business model to operate with that in mind.”
Gig Wage also sets itself apart by enabling payments to be paid directly into any bank account or neobank account, not a Gig Wage one that takes a fee for allowing early access to funds. Lewis continued, “We use embedded finance and bank accounts as we work to be the bank of the gig economy. We’re hyper-focused on providing the outcomes the customers need, but through the companies paying them. By leaning into the B2B infrastructure, the gig economy will have a groundwork that will allow others to overlay any technology on top of it as there will be connectivity and comprehensiveness.”
While Gig Wage’s main industry is transportation and delivery, the infrastructure could be applied to any field.