Calvin·Farel and Inventive Ventures jointly focus on the lack of gig workers benefits through a new class of start-ups and platforms in the region of the Middle East

App-based marketplaces like Uber and Lyft for example have revolutionized the way people find work and earn income. Workers today can choose many kinds of short term and flexible jobs, whenever they want or need.

Calvin·Farel and Inventive Ventures are currently developing under the “Future of Entrepreneurship” a platform business model for the region of the Middle East for gig workers closing the “lack-gap” of workers benefits, as job flexibility comes currently at a high cost.

Most of these “gig-workers”, while they earn income, do not receive benefits, including healthcare, life insurance, disability insurance and pensions. For this new way of working to be net positive for workers, the ensuring and emerging gap for traditional employment benefits will need to be filled. There are in our opinion in principal three potential options for filling this gap. A public solution would see governments step in to provide these benefits. That seems in our opinion unlikely in the current climate, particularly in countries such as the US for example.

A private solution would have companies start to treat their gig workers like employees and provide full benefits. The upcoming flotations of Lyft and Uber, which each filed confidential listing paperwork with the US Securities and Exchange Commission last year in December will probably give investors a glimpse of how likely each company is to do so. But given the costs involved, analysts expect them, and most other companies, to refuse unless they are forced to by new laws or regulations. That means that in the short term in our opinion, gig workers will have to carry the cost of their own benefits, unless we invent something else.

That creates an opening for the third possibility: a new set of for-profit businesses could emerge to provide benefits tailored to gig workers through cryptocurrencies for example. This new class of start-ups has in our opinion a market opportunity because the existing traditional benefits infrastructure is not currently set up to meet the needs of these individual gig workers.

These “new” kind of private companies could find it very attractive to offer, on an aggregate basis, lower cost options for healthcare, workers’ compensation and retirement savings in cryptocurrencies that individual gig workers would never be able to negotiate on their own or receive otherwise. Further, these companies could come up with innovative products aimed at these workers, including loans designed for individuals with intermittent but predictable income, or tools for running freelancer businesses. If governments eventually require gig platforms to step in and cover partial benefits, the start-ups would be well positioned to profit from helping them – apart from the fact that we at Calvin·Farel and Inventive Ventures consider it as part of our social corporate responsibility.

Given how work has evolved, labour regulations must change as well in our opinion. The existing work contract needs to be reimagined to extend beyond the typical categories of self-employed, full-time or part-time. This new “gig status” would be designed to protect flexible work – the reason in our opinion people pursued gig work in the first place – while providing some economic protection, enabling them to weather financial shocks and provide a path to longer term economic stability. Under this new arrangement, a worker for example who spends 15% of their time working for the platform Instacart and 25% working for Lyft, could have 15 cent of their benefits covered by the former and 25 cent by the latter, for example. Such a model would likely benefit the new emerging benefit providers, as they would arguably have already built relationships with gig workers and developed more affordable benefits services.

It will take us some time to develop and implement a new framework that strikes the right balance between flexibility and economic security. We know that work brings more than just income: it also provides dignity, purpose and social connections. A reimagined work contract would allow every worker on our upcoming platforms to achieve their full potential, on their own terms.

Together, Towards Tomorrow