Ventures WorkerTech newsletter: February 2022 The latest update from Resolution Ventures 22 February 2022 by Emma Selinger Emma Selinger Did you know that in 2019, 10% of the working population did some form of weekly gig work? Growth in this part of the labour market shines a light on the tension between the autonomy and flexibility that gig work offers, and the lack of income security, worker rights and safety net that are inherent to atypical work. In this edition of the WorkerTech Newsletter we explore issues facing gig workers, and how WorkerTech can be deployed to improve workers’ experience of the on-demand economy while retaining its benefits. But before we dive into this, first let us tell you about the most recent addition to our investment portfolio, CareerEar. Founded by Claudine Adeyemi and Precious Ene, CareerEar is an online platform helping career-seekers from underserved groups to make career choices and prepare for the future of work. Read our blog to find out more and get in touch if you’d like an introduction to Claudine and her team. Enjoy reading and as always, drop us an email if you’d like to know more about our work. Emma Selinger Ventures Manager Resolution Ventures WorkerTech and the gig economy When we talk about the gig economy, the first thing that might spring to mind is an Uber driver or a Deliveroo rider. But in reality, the gig economy is much broader than just these workers that are visible to us. We think of a gig worker as any atypical worker – someone who is not in a traditional employee-employer relationship, and instead might be platform worker, zero-hour contract worker, temporary or agency worker, or self-employed on low pay. So what do we know about these workers? A lack of a universal definition means that identifying the characteristics of gig workers and the broader trends of the gig economy is tricky. However, research using a variety of definitions has found: The number of gig workers or self-employed workers in low-paid or precarious roles has grown in the past decade. 40% of the growth in self-employment since 2009 has been in precarious sectors and in 2019 just under 10% of all working adults did some form of gig work weekly, up from 4.7% in 2016. Precarious workers tend to be aged 18 – 34, underemployed, not have received training in the past three months, not own their own home and live outside the South East of the UK. Gig workers have varying experiences of pay. In 2016 45% of self-employed workers earned less than the national minimum wage, rising to 55% in wholesale and retail sector, and 59% in the transport sector. Online jobs are likely to earn less than national minimum wage, and courier services earnt the highest levels of hourly income, nearly double the national minimum wage. Gig workers don’t all agree about their future earnings. In a survey commissioned by the Department for Business, Energy and Industrial Strategy in 2018, 34% of respondents said that their income from gig work would get better in the coming year, 34% said it would stay the same and 16% said it would probably get worse. These characteristics lead to workers in the gig economy facing the following issues: Low pay and unpredictable income: gig workers can end up earning less than the minimum wage, with huge implications for standards of living, mental health and financial resilience. What’s more is that given the piecemeal way they are paid, it’s hard for workers to know exactly how much they are earning on each job and plan spending against this. Lack of prospects or progression: good employers tend to invest in training and development for their employees. There is little incentive for platforms to offer training as workers could easily take new skills elsewhere to a competitor. Lack of rights and benefits: as gig workers aren’t employees, they aren’t entitled to typical rights such as pension contributions, sick pay or holiday pay. On top of this, workers find it more difficult to pressure platforms to improve conditions as the isolated nature of their work prevents them from organising with other workers, and they don’t have traditional union support available to them. Algorithmic management: gig workers using digital platforms can be at the mercy of an algorithm managing job allocation and therefore earnings. The Institute for the Future of Work highlights this problem in their report, The Amazonian Era, and also explores the need for better stewardship of worker data. Given how much of gig work is facilitated by technology, it’s fitting that we can also harness technology tackle some of these problems. Fortunately there are a few ventures already working on this: Collective Benefits – helping platforms protect their independent workers with sick and injury pay, mental health support, everyday savings, and insurance. Clarity – a financial health app for on-demand workers that provides them with income and expense tracking and spending insights to help workers meet their savings goals. Drivers Cooperative – a New York based worker owned co-operative for taxi drivers offering drivers 8-10% more earnings than comparable platforms. Shiffle – an app offering earned wage access, job stacking and spending insights for gig workers. We’re keen to discover and back new solutions improving the experience of the gig economy for workers, so if you have an idea that tackles any of the issues we’ve talked about, please get in touch. Latest insights from the Resolution Foundation Under pressure – The 2020s are set to see the pressures from ageing intensify, healthcare costs rise, and the state investing to drive the net zero transition. This report assesses these demands in detail and considers what we can learn from the strategies employed to deal with the spending pressures of the past as the government seeks to manage existing and emerging fiscal pressures. Leaving Lockdown – This spotlight explores younger people’s employment trajectory during the Covid-19 pandemic, and sets out where policy makers should now be focused. It finds that there remain clear areas for concern including employment and pay scarring, insecure contracts, and an increasing proportion of young people who are economically inactive and not in education or training. Under new management – Immigration has been billed as both a driver of, and a cure for, a low-wage economy. This publication examines these two arguments in light of Brexit, recommending that policymakers need to recognise that a new migration regime can complement a high-wage economy, but won’t necessarily drive it. Workertech stories The Institute for the Future of Work published their Good Work Time Series, a brilliant piece of research that combines analysis, dataviz and strategy on good work trends over time. This unique view is designed to help policy makers identify the most effective ways to improve social, economic and health outcomes together, enabling better interventions tailored to local challenges. In an open letter to the Prime Minister, Ufi VocTech Trust calls for investment into technology for adult skills to realise the levelling up agenda. It sets out how education technology can complement the agility needed for the future workplace, and the fast changing business models which demand new skills. A new podcast from JFF explores the impact of technology and AI on education and employment through conversations with experts that highlight both its risks and rewards. Topics covered include the dangers of invisible AI, how AI can encourage entrepreneurship, and the need for schools to embed ethical use of AI into their curriculum to ensure a positive impact on the future of work. In 2019 – 2021 Nesta ran the CareerTech Challenge – a funding programme to stimulate innovation for precarious workers to upskill and retrain online, or access accurate data-driven information, advice and guidance that helps them find work. Nesta Challenges caught up with two funding recipients, Stay Nimble and our latest portfolio company, CareerEar, to hear about how the pandemic has increased demand for their services, and how the cost of living crisis has increased in-work poverty and exacerbated the demand for better work. Get involved Apply for direct investment from Resolution Ventures. We accept applications from WorkerTech ventures on a rolling basis. Or you can book a slot in our office hours for an initial conversation. Impact Central’s accelerator programme is open for applications until 18 March. Their six month programme for early stage founders offers 150 hours of learning, mentorship from successful entrepreneurs and a community of founders for life. Subscribe to BGV’s brand new newsletter, Tech for Good Compass, the go-to place for resources and updates on the tech for good startup world Three of our portfolio companies are hiring. Follow the links to find out which roles Organise, CareerEar and Breakroom are currently advertising.
