Throughout history, it’s been difficult to pinpoint exactly where a recession begins, but not this time. The coronavirus has created an unprecedented situation across the globe. Thanks to the virus, U.S. unemployment hit 14.7% as of May 8, 2020.[i]
In a time when millions of Americans are without work, you might think that they’re looking at any and all options – and many are. Twitch, a live-streaming content-based site popular among gamers, saw a 24% increase in accounts since the beginning of lockdowns.[ii]
Twitch is a gig-based company; it offers flexible hours and allows gamers and artists to work as freelancers instead of full-time employees. Some of the more well-known gig-based companies include Uber, Lyft, Etsy, Airbnb, and Shopify – basically any company that connects providers directly to users of some good or service and takes a cut of the transaction.
Gig workers don’t have many protections in place. They don’t have guaranteed wages, and they don’t have sick pay or health care – things that are crucial in a public health crisis. Now, many gig workers face a dilemma: break the lockdown orders to try to pay the bills or stay home without pay. Many who decide to take the risk are finding that they’re only bringing in about half of what they did before the pandemic began.[iii]
For example, take a look at Kiki’s Pet Services, based in Tampa, FL. Kiki Mercier founded Kiki’s Pet Services nearly two years ago after starting her business on Wag! and Rover.
Both companies offer local pet sitters and walkers who care for pets the way their owners would. Wag! is a little more service-as-needed, where walkers pick up nearby walks as they appear in the application, while Rover allows walkers to schedule trips. For many pet lovers, Wag! and Rover were great ways to add joy to their day while bringing in a few extra bucks.
Mercier didn’t plan to grow her business into a full-time gig – it just sort of happened. Before she knew it, Mercier was being requested specifically by dog owners in her area. Within six months, she quit her job and moved to pet-sitting full-time, and she’s never been happier. At least, she couldn’t have been happier until lockdown hit her business hard.
Before the coronavirus lockdowns began, Mercier welcomed Romeo, an Italian greyhound, every weekday while his owner was at work. Conley, a young golden retriever, had been staying with Kiki on weekends since he was just two months old. She walked Gunner, Teddy, and Koa daily, and she’d pick up extra walks where she could. In all, she’d walk between 5 and 10 dogs a day.
But now? Mercier is down to about two walks per day, and she hasn’t seen Romeo, Conley, Gunner, Teddy, or Koa in months.
“I typically walked dogs at lunch time while everyone was at work,” Mercier said. “Now that most people have been required to work from home, the demand for afternoon lunch walks has diminished to almost nonexistent. Same for overnight sittings. Clients have been forced to cancel their flights and postpone any travel plans, which in turn erases the need for my services.”
Mercier is not alone. By mid-March, Airbnb bookings dropped over 80% across Europe. Bookings in New York, Seattle, and San Francisco had dropped more than 50%, and bookings in Washington, D.C., and Chicago dropped over 35%.[iv]
Some companies, like Instacart and DoorDash, are trying to support their workers through the crisis, offering 14 days of pay if they are diagnosed with the virus and have to stay home. Others, like Uber Eats, Postmates, and Grubhub, have been able to offer “no-contact delivery” service so that drivers can complete orders without interacting with customers.[v]
However, with demand for gig services so low, it’s hard for these companies to continue to support their workers, particularly those who are still able to work but find themselves with the opportunity to do so by no fault of their own.
The gig economy may be in trouble because of the pandemic, but companies are doing their best to stay abreast of the situation. Wag! and Rover are publishing articles to their blogs about how to keep pets safe and healthy during the crisis. KitSplit, a production and camera gear rental company, offers insight about how to sanitize equipment being shared via their platform. Flip, a subleasing platform, answers questions about rent payments during a time with such high levels of unemployment.
The most important thing gig companies can do right now is support their workers, cut their losses, and find new ways to meet the needs of their consumers.
Questions for Marketing Managers to Consider:
- As a marketing manager, how can you reposition your product to meet changing needs in your audience?
- How can gig-based companies like Airbnb and Uber adapt their business models to survive worldwide lockdowns?
- How will the COVID-19 closures change gig-based work permanently? What aspects of this new way of life will outlast the virus?