Fraudsters, like consumers, love a good deal.
And the gig economy, estimated to be worth half a trillion dollars in 2023 and employing 38% of the U.S. workforce, is becoming their latest target — with more than a third of U.S. consumers report being victims of fraud on gig platforms, a rate 10 times higher than any other fraud circumstance.
“The challenge is that anyone can join these platforms … therefore, the bad folks do as well,” Rodger Desai, CEO at Prove Identity, told PYMNTS’ CEO Karen Webster, explaining that the open nature of platforms like DoorDash and Uber — as well as their fundamental utility — make them attractive targets for bad actors.
Many gig economy platforms allow users to operate under pseudonyms or remain anonymous. While this can provide privacy for legitimate users, it also opens the door for fraudsters to create multiple fake accounts or impersonate others without fear of immediate detection. This anonymity makes it challenging to track and hold scammers accountable.
The challenge in fighting fraud within the gig economy, Desai said, lies in balancing security with the need for rapid onboarding and user convenience.
As the gig economy grows, so do the techniques used by fraudsters. From phishing scams and account takeovers to synthetic identity fraud and fake reviews, the evolving nature of fraud in the gig economy requires constant vigilance. Fraudsters often stay ahead of security measures, exploiting new technologies and vulnerabilities as they arise.
Against this backdrop, Desai said established trust networks like those used by credit card companies and mobile phone operators can prove to be a powerful tool in fighting fraud.
“Networks like Visa and Mastercard have done a great job of creating a circle of trust. You and I can jump on a plane and go to Thailand and have lunch somewhere, and that merchant will know they’ll get paid in their currency … in the same way you can go anywhere in the world and make a phone call,” he said. “The question is, how do you apply that to the gig economy?”
Implementing a system of “check marks” to verify users while maintaining their privacy, Desai said, could be one promising solution.
Under this system, users could maintain anonymity on the platform while still being verified. For example, a user could choose a pseudonym like “Taylor Swift” but have a check mark next to their name, indicating to other users that they have been verified by the platform.
This approach aims to create accountability without compromising privacy.
“You should be anonymous until you don’t have the right to be,” Desai said, explaining that in cases of law-breaking or terms of service violations, platforms could “break the glass” to access the user’s real identity.
The proposed system relies heavily on phone-based verification, and Desai noted that his company has developed technology that can tie phone numbers to real-world identities with high accuracy, even as users change phone numbers or devices. This persistent identity token, he explained, could form the basis of a durable verification system.
Importantly, the approach elaborated on by Desai would allow for varying levels of information sharing. Users could choose to share as little as confirming they are human, or as much as their spending habits and travel preferences, depending on their comfort level and the benefits offered by the platform.
However, implementing such a system faces challenges. It would require widespread adoption to be effective, and platforms would need to carefully consider how to incorporate it into their terms of service. There are also questions about how to handle global verification, given the vast differences in identity documentation and phone usage worldwide.
Still, “It’s a vital need that exists,” said Desai, noting that Prove has “just launched into this general category of trust and safety within the gig economy.”
And with the rise of artificial intelligence-generated content and deepfakes, being able to verify the authenticity of both users and content is critical.
While it remains to be seen how such systems will be implemented and adopted, one thing is clear: As fraud in the gig economy and beyond it continues to rise, innovative approaches to digital identity and verification will be crucial in maintaining trust in our digital world.
“Over time, you’re probably only going to trust things that have been signed and verified,” said Desai, predicting that verification systems may soon come to extend beyond user profiles to content itself.
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