Product Case Study — Portable Benefits for Gig Economy Workers
By: Christine Chen
Tags: Product Design, Future Of Work, Product Management, Sharing Economy, Gig Economy

Product Case Study — Portable Benefits for Gig Economy Workers

Photo by Kai Pilger on Unsplash

Ensured is a product concept to bridge the gap of gig workers lacking benefits by providing healthcare and insurances through community funding to overcome regulatory friction over employment classification

Overview

Uber, Lyft, DoorDash, Grubhub, Postmates, and InstaCart. It’s likely you’ve placed an order from one of these household names, though have you considered what it’s like to be a gig worker? While gig workers appreciate the flexibility to dictate their own hours based on their individual needs, a survey from AppJobs revealed that 70% are unsatisfied with their lack of benefits, especially when it comes to health insurance, sick leave, and unemployment.

That statistic is staggering when you consider there are 57 million independent contractors in the United States, with 10.6 million citing contract work as their primary income source, according to the Bureau of Labor Statistics. The shift to alternative work arrangements will likely only increase with the future of work. One of the more vulnerable segments is app-based drivers, who often earn below minimum wage. App-based drivers disproportionately belong to lower economic brackets, are more likely to be African American or Hispanic than the national averages, and don’t receive employer benefits. The failure to provide gig workers with this financial safety net stems from a lack of sophisticated regulation, hampering the efforts of key players aspiring to move the needle on benefits.

The Problem

Sponsored benefits are traditionally tied to full-time employment, which neglects the healthcare needs of gig workers. A 2019 survey by Edelman found that 43% of freelancers cannot work a traditional job due to health care issues. This catalyzes a social inequality issue — a lack of benefits diminishes health outcomes for gig workers that are traditionally lower-income, diverse, and in great need of healthcare services.

So why haven’t more gig platforms provided benefits? While companies like Uber have voiced a desire to, antiquated laws penalize them for doing so. In many states, a gig platform paying for benefits could render their workers employees rather than independent contractors. This would entirely disrupt the economics of gig platforms by undermining workers’ job flexibility and right to claim some expenses against their taxes, plus result in costly payroll taxes for companies and higher consumer fares. Gig platforms are effectively disincentivized from offering benefits, leaving gig workers disempowered.

Goals

Through our problem identification, we developed several goals:

Create an opportunity for gig workers to receive benefits through their gig platform Remove regulatory friction for gig platforms to provide benefits Provide an affordable suite of needed benefits Create ease in their ability to access and understand benefits

Understanding User Demographics

Considering our problem space and our goals to provide benefits to gig workers, we identified 3 potential user groups:

All Independent Contractors

App-Based Independent Contractors

App-Based Drivers

We were able to narrow our targeted user base down to app-based drivers through our market research.

First, when we dug into these 3 groups, we found that app-based drivers were more likely to be racially diverse and in need of benefits than other groups. COVID-19 has accentuated this need, as many put themselves at risk delivering meals and services to families who are able to shelter in place.

Second, we found that corporate greed wasn’t driving the lack of benefits for drivers. Many gig platforms have publicly stated they want to provide more benefits. They are only limited by the legal landscape around worker classification — providing benefits counted against their classification argument of keeping their drivers as independent contractors. Solve that, and you create benefit opportunities for a large swath of Americans.

Third, servicing app-based drivers meant that with only a few partnerships, we would gain access to a sizeable number of Americans in need of benefits.

USER RESEARCH

Based on our market research, we hypothesized that app-based drivers would be most underserved and in need of benefits. We conducted 10 user surveys of both app-based drivers and other freelancers to validate our hypothesis. Main pain points from app-based drivers can be summed up as:

Lack of healthcare Low pay Lack of retirement benefits

Meanwhile, pain points from general independent contractors can be summed up as:

Career-related problems (mobility, recognition, work selection) Lack of healthcare Better client interactions

These findings were consistent with market research from Journal of Economic Perspectives, where 50% of self-employed workers indicated healthcare was their most preferred social program.

USER PERSONAS