If there’s one thing that’s clear, the gig economy has hit global markets with force. While the recent Uber IPO and the subsequent protests from drivers are still in the headlines, the reality is that gig work is far from over. As controversial as the gig economy is, the MBO Partners State of Independence report found that 41.8 million workers in the US are now self-employed and generate $1.3 trillion in revenue. It has led to the emergence of the likes of Uber and Deliveroo, and it is nearly impossible to ignore. For most enterprises, the conscious risk is more from the innovative and disruptive business models these firms offer, but there are also lessons to be learned in how they attract and manage talent. In a market where talent wards crop up everywhere, your enterprise must embrace innovative talent models from the consumer market. This piece will examine the role of blockchain in underwriting the modern gig economy, and the benefits it can bring to gig economy intermediaries and its workers.
Intermediaries aren’t the only winners in the gig economy; there are a wealth of opportunities for all enterprises
The gig economy intermediary model is based on nothing more than middlemen connecting customers with workers for a transaction fee without offering any products themselves. All of this is changing as new, innovative firms attack the space. While the first firms that come under fire are the intermediaries themselves, it opens up the playing field to other enterprises that utilize technology and operating models to leverage and deploy talent in new ways. No business leader wants to come under the scrutiny that Uber has over the past few months, but with the right technologies and models, they can build a gig economy model that makes sense for their business.
Technologies are available that can reassure gig workers and secure enterprises
Firstly, blockchain’s smart contracts would remove uncertainties surrounding payment—54% of gig economy workers have felt it has taken too long to receive payment for a job. Writing the agreement between the worker and customer on the blockchain, which would hold the funds and release them once the agreement is fulfilled, speeds up the process. Managing payment this way provides enhanced security over traditional intermediaries as it is impossible to reverse a payment. An impartial third party often settles disputes. Blockchain also has the advantage of being immutable; currently, it is relatively easy for workers to hide their working history and any negative reviews by creating new accounts with intermediaries. Implementing blockchain would create a complete history of every task ever completed by a worker, which customers could view to verify the skill level and ensure they haven’t oversold themselves. It’s likely this would prevent disputes or disappointment later in the transaction.
Three blockchain-fueled disruptors offering talented workers increased flexibility in the gig economy
Dascee: Dascee, short for Decentralised Alternative Cab Serving & Empowering Everyone, is a Malaysia-based ridesharing app that runs on the Ethereum blockchain. It claims to offer a decentralized platform that allows drivers to operate as small business owners rather than as employees of a large multinational corporation. The application of blockchain has other benefits. For example, its immutability allows customers to find a previous driver and select them for another journey—something many intermediaries in the space do not offer. Since its release, the platform has seen some success; reports suggest that Dascee’s value currently exceeds $100 million, and the number of bookings has risen 800% in the second half of 2018. Dascee executives advise that they plan to move beyond Malaysia and expand into other Southeast Asian countries including South Korea and Thailand, a true testament to the idea of a blockchain-powered ridesharing platform.
Beenest: Beenest is another blockchain platform that uses the technology to give complete control to the workers, this time globally, in short-term housing rental market. Combined with decentralization, it has used smart contracts to offer the same service as other operators in the industry without the high commissions, which are often up to 15%. If the customer pays with Beenest’s cryptocurrency, there are no fees; however, the firm makes its money by charging if customers pay with other currencies. The firm also handles customer disputes well. With a single enterprise governing the market, it could be a lengthy process to solving a dispute, but Beenest is different because it selects a random mediator from a group of its most engaged clients to resolve the situation. Consumers have evidently bought into the idea of becoming blockchain backed hoteliers, as Beenest’s three-staged initial coin offering raised approximately $15 million.
OpenBazaar: OpenBazaar is an international decentralized marketplace that allows consumers to trade directly with one another without any intermediaries, meaning there are no transaction costs. By downloading the OpenBazaar app, individuals can create their own stores, browse through others, make offers, and purchase goods and services. The decentralized marketplace is also appealing as it allows for an impartial third party, also a user of OpenBazaar, to be chosen to settle any disputes which may occur throughout the transaction. One of the main criticisms of the marketplace in its early days was that people sometimes misused it for black market trading, but the company prevents this now by making users’ IP addresses visible so that it’s possible to track every member of the peer-to-peer marketplace and trace any illicit trades to their origins.
The Bottom Line: Decentralization is a direct threat to the model of gig economy intermediaries, but they can survive by distancing themselves from customer transactions.
Because the market is nascent, these startups are all tackling failings at the intermediary level. But what’s clear is that blockchain can right many of the wrongs with the current system by enabling forward-thinking enterprises to build the dynamics of the gig economy into their business models. Ultimately, workers want complete flexibility when working in the gig economy, and if intermediaries are unable to detach themselves from transactions, they risk losing both workers and their reputation.
