Editor’s note: This post was republished with permission from the Ewing Marion Kauffman Foundation’s Growthology blog.
The emergence of the platform economy has impacted all participants in the traditional economy: consumers, workers, and businesses. The rise of startups like Uber and Airbnb helped to create the platform economy. In fact, these businesses have helped define the concept as they disrupt traditional economic models.
But how can the platform economy create opportunities for entrepreneurs?
The emergence of the platform economy has presented entrepreneurs with opportunities to develop innovative solutions to problems facing participants in this new economy. The entrepreneur has always been a problem solver, building businesses to tackle new challenges and to rethink how things can be done better, faster, and smarter. As the platform economy is creating new challenges for participants, entrepreneurs can help solve these problems. Below, I share two examples of how entrepreneurs developed potential solutions for two of the major challenges facing platform economy workers.
Participants in the platform economy are often attracted to this type of work because it is flexible. The worker is often able to determine how much they work, they can set their own hours, and they can combine it with other sources of work. However, one consequence of this benefit is income volatility. To address this problem, the company Even has created an app to help workers manage irregular scheduling and income. The app does this by first determining the user’s average income. When the user has a lower than average payday, Even deposits extra money into their account. When the user has a higher than average payout, Even “pays itself back” with the extra money the user earned. By recognizing this new challenge facing platform economy workers, yet another platform startup was born.
Access to Benefits
Another challenge facing platform economy workers is access to benefits. Because platform economy work is often part-time, workers are not always eligible for work benefits. The company Peers has attempted to solve this problem for platform economy workers through the creation of a benefits package which is:
- “Portable, staying with the worker regardless of employer,
- Newly structured to allow for… workers’ compensation insurance for work across multiple employers, and
- A payments system that allows for multiple employers to fund an individual’s benefits.”
The benefits include health insurance, vision and dental insurance, life and disability insurance, and retirement savings plan. A new feature being developed will allow for companies to contribute to the benefits package, “per job completed, sale made, [or] ride given.” The units of measurement used by Peers (per job) on its website highlights the strong connection between Peers and platform economy workers.
The platform economy presents both challenges and opportunities for its workers. At the same time, the platform economy has created new resources and ways for customers and businesses to address the challenges and opportunities that a more flexible and on-demand economy demands.
Emily Fetsch is a research assistant in Research and Policy for the Ewing Marion Kauffman Foundation, and assists in the processing of new grants including grant research, grant write-ups, setting deadlines, and reviewing financials. She also assists in writing literature reviews and informative briefs, and conducts quantitative and/or qualitative analysis on the economy, policy, and entrepreneurship.