Speeding Up Gig Economy Disbursements

Gig economy workers have certain expectations when it comes to payments and disbursements, whether they are homeshare hosts who rely on reservation income or rideshare drivers who collectively make millions of trips per day. The 3.9 million Uber drivers around the world are accustomed to instant disbursement options that can pay out wages within minutes, while Airbnb resolved its payment processes to fit the needs of international home renters and hosts.

Freelancers are earning more than $1.4 trillion in income in the U.S. alone, and this economy is rapidly expanding around the globe. There are certain sectors that are still behind the times when it comes to serving this growing labor force, however. Traditional insurance providers have yet to update their paper-based methods and thus underserve the gig workers who need them.

Freelance professionals who are accustomed to quick and easy disbursement experiences expect the insurance industry to offer similar services, but they are often disappointed, according to Tim Attia, CEO and co-founder of gig economy insurance provider Slice Labs. Traditional home and auto insurance claims can take 15 to 30 days to reach claimants, which is unacceptable for workers who are used to simple click-and-pay in-app experiences.

In a recent interview with PYMNTS, Attia said Slice has automated its claims experience to bring more speed and convenience to the payout process.

“On the claims side, if it’s a smaller-value claim, those are handled within … hours to days, depending on [additional factors],” he said. Attia also noted that 80 percent of the company’s claims are currently settled within a three-day period.

Slice offers insurance policies for rideshare, homeshare and cyber professionals, allowing users to purchase coverage on demand and cover specific home reservations or driving shifts. Automating this process can provide more benefits to consumers within the on-demand world, and companies like Slice are innovating their payments processes to meet those needs at scale.

Disbursements in the On-demand World

Slice relies on its website, mobile apps and technologies like artificial intelligence (AI) to more quickly disburse claims, Attia said. All claims for rideshare, homeshare or cyber insurance policies first begin with a chatbot, although rideshare customers can also start them through the mobile app. All users are also given the option to begin filing through more traditional methods, like phone calls.

The platform’s ultimate goal is to offer insurance and claims processes that are as on-demand as the gig economy itself, which is why Slice’s approach differs from those of traditional insurers. Users can sign up and pay for policies only when necessary, and they do not have to pay monthly fees to remain active. The company is moving that experience into the claims side, too.

“We allow [customers] to pay when they’re earning money,” Attia said. “Then, the other side of it is, if we are going to auto-settle a small property claim, we obviously want the money to show up in their bank accounts, let’s call it, instantly. I think that’s one of the biggest shifts, … that we don’t have a billing system. We have a payments system, and I think that a lot of traditional insurers are still thinking billing systems.”

Slice is looking to further innovate its claims experience to boost speed, especially as instant payments become the norm in the gig economy. The company’s claims are still paid out via checks, despite the automation it has tied into the process, but it is currently “evaluating options” to enable instant reimbursements. Attia said Slice is also examining how tools like artificial AI and machine learning (ML) could better fit into the payout system, including using such technologies to detect fraud.

International Disbursement Challenges

Speed is not the only challenge insurers must confront when it comes to gig economy claims and disbursements. Freelancers also operate internationally, meaning providers must be able to accommodate a global workforce.

“In our world, we have to bring in money and pay out money,” Attica said. “If you look at Airbnb … it’s across a large geography. Putting aside insurance regulation on collecting and paying out premiums, it’s a challenge to try to look for a solution that would cover that many jurisdictions. That’s one of the areas we’re working to try and solve. How can we handle things like payments across a large geography?”

Responding to the payment needs of such a large and diverse workforce may not be easy, but it is necessary. Gig workers are beginning to expect all payments to be both instant and convenient, and their preferences are rubbing off on the rest of the world. It is up to disbursements providers to keep pace.