This year, one in three U.S. workers describes themselves as a freelance worker. That’s 700,000 more workers striking out on their own since just 2014. In San Francisco, Silicon Valley’s biggest cheerleaders have embraced the burgeoning “gig economy,” while many actual contract workers complain that they do such work not by choice, but out of necessity.
Uber alone has signed up more than one million contract drivers, some of whom famously sued the company in California courts. The drivers argued that Uber unfairly categorized them as contract workers, when in reality the only difference between them and full-time employees was their lack of benefits.
Now, to better serve the financial needs of Uber drivers, another California startup wants to offer freelancers like them unique financial products.
Andrew D’Souza pitched his Clearbanc idea to the famous tech incubator Y Combinator’s fellowship program. He proposed a daily payment system that would give Uber drivers direct deposits every 24 hours, helping them access funds immediately to cover expenses like gas.
As more Americans move towards the gig economy, whether out of choice or financial necessity, D’Souza is one of the first entrepreneurs to directly target their financial needs. Typically, stocks have been one of the primary ways middle class Americans managed their savings, but in 2015, just 55% of households earning between $30,000 and $75,000 are invested in the stock market.
“Our goal is to build a new type of bank for self-employed freelancers and independent professionals,” D’Souza says. “Uber has over a million drivers, growing really quickly, and all of those drivers have a common set of banking and financial services needs. And so, it made sense to start with them…Having the money they’ve already earned faster is a huge benefit and an immediate need for them.”
D’Souza’s company has not yet secured an endorsement from Uber or any other major rideshare company, although he has lured some drivers to sign up for the financial products. In addition to daily direct deposits, Clearbanc would provide debit card services as well.
While entrepreneurs like D’Souza are going after freelancers, so are larger Silicon Valley players, like LinkedIn. Also this October, LinkedIn launched a pilot version of a new program called ProFinder, which aims to help Bay Area freelancers find work more easily. Unsurprisingly, LinkedIn ProFinder project lead Vaibhav Goel is a big cheerleader for the gig economy.
“The trend is very real and here to stay,” Goel says. “It enables professionals to pursue several jobs or passions at once while having the flexibility to work when and where they want.”
At least, as long as they get paid on time.