Corporate Responsibility in the Gig Economy

Heart keychain represents trust

Heart keychain represents trust

Gig Economy companies provide a wide range of services through the use of contract or freelance employees. Often, these contract workers receive their job task through an app from someone in the general public needing assistance or a service. Whether it be grocery delivery, food delivery, home maintenance tasks, child care, or taxi service, the contract worker provides the service of the company to the consumer. With the gig economy currently constituting half of the workforce, and an estimated growth to 80% of the workforce by 2030, background screening laws and best practices must be put in place.

Gig Economy Responsibility

While some states and local municipalities have laws for industries serving “sensitive populations,” such as minors and the elderly, there’s no background check requirement at the federal level for the gig economy. The industry has yet to institute best practices for screening contract workers as well. Some companies in the gig industry recently started to change this, boasting commitments to public safety and background checks, but these are often the lowest cost, instant-return checks that lack the depth and breadth of more involved screening. Still others don’t perform any background checks at all.

Every company, regardless of industry, has a vested interest in the quality and safety of its employees and clients. So why aren’t background checks more prevalent in the gig economy? One argument from gig companies is that their business model simply allows a service to be rendered, where the company acts as a middle-man to introduce gig worker to customer, and therefore isn’t the actual provider of the service. This line of reasoning removes any responsibility from the company and places it solely on the individual performing the service, or “gig.”

Following that line of thinking, when something does go wrong, when a contracted worker breaks the law or commits any misconduct, is the company responsible? Should they be held responsible for not taking precautions and thus endangering the safety of their customers? This is why trust economy is a better title. Without laws or even best practices concerning background checks, companies must rely on consumers to honor them with a significant amount of trust.

Benefits to Incorporating Background Checks

Build Brand Trust

By becoming an industry leader in safety, companies would instill trust in their customers. According to an op-ed by cybersecurity entrepreneur David Thomas' for InfoSecurity magazine, lack of trust costs brands $756 billion just in the U.S. and approximately $2.5 trillion worldwide, each year. When customers feel a brand is trustworthy, they feel connected to it, and that connection leads to consumer loyalty. Building a brand is more than selling a product or service, it’s building consumer trust and delivering on it. 

Mitigate Loss

Another benefit to adding background checks is to mitigate financial losses caused by an eventual, and expensive, litigation. Just earlier this year, a delivery driver for gig economy company GrubHub was caught on camera stealing a tip jar from a Detroit area restaurant. The person in question, the police discovered, has an outstanding arrest warrant in another state. This is just one of many stories, and many more to come. By investing in nominal background check fees now, companies could save hundreds of thousands of dollars in legal fees. Small to medium companies may not survive the financial and stigmatic effects of accusations brought against a gig worker, regardless of the case outcome. 

Prepare for Change

Additionally, the current court cases in California could lead to a change in the landscape of the gig economy. The industry may move to background checks as a standard or law, sooner rather than later. If companies integrate these processes now, not only does that position them as an industry leader, but also sets them up for success if those laws do go into place. When others in the industry are scrambling to adapt and integrate quickly, these companies can focus efforts on other objectives.

At Critical Research, our goal is to help companies incorporate the right tools to mitigate risk and build trust with clients and consumers. We work to maintain transparency and provide support through the package building and integration process. Our easy-to-use technology provides quick turnaround, which is a crucial component of the gig economy. Visit our services page to read more about how Critical can work for you.