To play, you gotta pay
In May of this year (2023), I landed home in Madison, WI at 10pm. My family is usually lucky to make it to 9pm so they are asleep, I order a Lyft.
I just got back from The Marketplace Risk Conference, which is a great event that takes place in San Francisco every year, dedicated to Trust and Safety of marketplaces. Lots of great speakers, amazing networking, and deep industry insights.
I get in my Lyft half asleep myself and my driver asks where I’ve been. I say, “Funny enough I just got back from a conference all about marketplaces like rideshare companies.” And I had to ask, “Say we talked a lot about what benefits do independent workers on these platforms really want - Occupational accident, health benefits, insurance, yada yada. What would you say to those folks in the room?”
A bit paraphrased here - “To me, it’s about the money. I just want my fair share of the money, I want transparency of how much I made and how much went to the rideshare company.” He went on to explain he is financially sound. He checks his bank statements, he knows what’s coming in, but the money on his bank statements didn’t match his end-of-the-year tax statement. He had a hard time finding help to answer why that was. He knew his decision-making as an independent gig worker started at the top - his revenue. Revenue drove [no pun intended] decisions he made like the insurance he buys, the time he dedicates to his side hustle and much more.
I bring this up now because of a story I read today from Insurance Journal [Link here] where a class action lawsuit is being brought to a grocery delivery platform because of - you guessed it - pay.
Looking at the class action lawsuits over the past number of years two common things show up in nearly every one of them.
People didn’t make enough to be considered minimum wage
People worked a whole lot of hours and didn’t make any money (they wanted overtime pay)
Simply put, if you are scared of misclassification of your workers, maybe pay them. You want to retain the workers? They like money. If two similar platforms are out there and one pays them more, which do you think they’ll use?
Will it prevent/stop every misclassification lawsuit, no of course not, but by golly this would’ve prevented a lot of the previous ones. A class action misclassification lawsuit could put you out of business, don’t let that happen.
My suggestion
Use your technology and data to find trends around these pain points. Do you have a worker that’s been doing 50, 60, 70 or more hours per week in to your platform? What do you think is going to happen when they are burned out and still can’t pay their bills?
Do you see trends with workers of high frequency and low pay? Be proactive, address it, figure it out.
They care about pay and how they get paid as well. Ask me about companies who can provide payment options for your independent workers - some even same-day!
