Two-thirds of gig worklers across the globe have reported a large decline in income, with ridesharing drivers being hardest hit, according to a new study by fintech investor Flourish.
In a report titled The Digital Hustle: Gig Worker Financial Lives Under Pressure, the research reveals significant lifestyle impact and financial damage brought about by the Covid-19 pandemic in South Africa, India Indonesia, Brazil and the USA.
The research, conducted from May through to August 2020 reveals that a majority of workers viewed the pandemic as an economic crisis, although their health remained a significant concern .
“The gig economy has created an alternative source of income for many people away from the 9am to 5pm jobs,” says Ameya Upadhyay, venture partner at Flourish Ventures. “Covid 19 disrupted the models in ehailing, 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.”
In South Africa, 91% of the gig workers interviewed were very concerned about Covid 19. Their biggest concerns were how the pandemic will affect their ability to earn an income and the risk to their family’s health.
The report also revealed the financial resilience and coping mechanisms of gig workers in the five countries. In South Africa over half of gig workers reduced household expenses, almost half borrowed money, and nearly three out of four had to rely on savings.
The trend is almost similar in Brazil Indonesia and USA, while in India gig workers experienced financial cushioning, owing to a strong savings culture, where 83% used their savings and 15% found new or additional work.
“With many economies now reopening, we hope to see the gig sector become more vibrant,” says Ameya. “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.”
Despite the disruption and uncertainties, Flourish expects a continued growth in the gig economy as workers try to find the best way to fit into this emerging digital workforce.
“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.”
Flourish conducted online and phone surveys of 3,195 gig workers from May to August 2020. Respondents were from Brazil (539), India (770), Indonesia (586), South Africa (605), and the United States (695).