Business Trends

How COVID-19 has impacted the global gig economy

Gig economy workers have been among the hardest hit by the COVID-19 pandemic this year. This has most notably played out with ridesharing platforms Uber and Lyft Stateside, but it is not only in the part of the world where the gig economy has struggled in 2020.

Aiming to put it in perspective is Flourish, a fintech investment platform, which recently published a report looking specifically at the gig economy titled – The Digital Hustle: Gig Worker Financial Lives Under Pressure.

The report highlighted the significant lifestyle impact and the financial damage brought by COVID-19 in South Africa, India, Indonesia, Brazil and the USA, in particular.

The report specifically surveyed 3 195 gig workers from May this year through to August 2020, with 605 of them coming from SA.

With two other BRICS nations included, it serves as a solid indicator of how things are faring locally by comparison.

“The gig economy has created an alternative source of income for many people away from the 9am to 5pm jobs. Covid 19 disrupted the models in e hailing, online deliveries and the general gig economy. We saw similar trends and insights in terms of the impact of the pandemic in South Africa, India, Indonesia, Brazil and USA,” noted Ameya Upadhyay, venture partner at Flourish.

Unsurprisingly, the report found in SA that 91 percent of the gig workers surveyed were very concerned about the pandemic. Their biggest concerns were how the pandemic will affect their ability to earn an income and the risk it posed to their family’s health.

“The trend is almost similar in Brazil, Indonesia and USA, apart from India, where the gig workers experienced financial cushioning owing to a strong savings culture where 83% used their savings and 15% found new or additional work,” according to the report.

Room for optimism?

While there has been a clearly negative impact as a result of the pandemic, Flourish believes the dynamic nature by which the gig economy works will make it flexible enough to change once lockdown regulations ease.

“With many economies now reopening, we hope to see the gig sector become more vibrant. Operations are obviously going to change in terms of adhering to health protocols in different countries but the industry should be flexible enough to take on board the changing consumer behavior,” says Ameya.

“In our post pandemic world, the gig economy is going to become more important and more vital, especially in Africa. Gig work is becoming increasingly important as a potential pathway to socio-economic development and employment creation, given Africa’s unique status as the continent with the youngest population but the highest youth unemployment rate,” Ameya concludes.

While Flourish is relative optimistic about the outlook for the gig economy in general, we’re still a little sceptical, especially as several of the shortcomings and issues that the pandemic highlighted regarding the gig economy, still remain.

Source: htxt

Leave a Reply

Your email address will not be published. Required fields are marked *