When Skye Theodorou was building an insurance product for delivery drivers and other gig workers, her team talked to 1,500 people about their experiences.

‘A scooter rider in New South Wales told us that when she had an accident, she was able to claim from Uber Eats, Deliveroo and her own CTP insurance,’ says Theodorou, co-founder and CEO of insurtech upcover. ‘At the other end of the scale were people in other states and on different platforms who had no protection whatsoever.  This lack of consistency is very worrying given the number of people who are taking on this kind of work.’

Broadly, as most Australian gig workers are classified as independent contractors and not employees, the Fair Work Act 2009 doesn’t apply. That means they have no insurance protection. For example, between September and November 2020, five bicycle delivery drivers died while they were working, but their dependents were not entitled to any workers compensation.

In New Zealand, it’s been almost two years since the Ministry of Business, Innovation and Employment began consultation on improving protections for contractors, but, so far, there have been no legislative changes.

Like their Australian counterparts, they are not entitled to the rights and benefits associated with formal employment. Meanwhile, the gig economy is booming worldwide.

Research by Mastercard and Kaiser Associates predicts it will generate US$455 billion globally by 2023. Stats NZ reports that just over 5 per cent of all employed New Zealanders work as self-employed contractors, while in Australia, the gig economy is already one the country’s largest industries.

‘Between 2015 and 2019, [the Australian gig economy] more than tripled in size to an estimated 250,000 people,’ says Pieter Koene, principal, Digital Strategy and Transformation, at PwC Australia.

COVID-19 certainly played a role, with lockdowns creating a surge in home deliveries. 

‘Platform providers can also enjoy more flexible access to workers and lower costs relative to traditional employment,’ says Koene. ‘For workers, there’s a low barrier to entry. And many either prefer, or need, this level of flexibility and autonomy.’

The term ‘gig economy’ has been attributed to former New Yorker editor-in-chief Tina Brown. She coined it in 2009 to describe how many workers were pursuing ‘a bunch of free-floating projects, consultancies and part-time bits and pieces while they transacted in a digital marketplace’.

Freelancers and contractors have been part of the workforce for some time. However, according to Anthony Joseph, PwC’s Financial Services Digital Operations and Automation practice leader, those described as ‘gig workers’ tend to be financially vulnerable — younger, less affluent, students or formerly unemployed.

‘When it comes to insurance, this is the cohort least likely to be aware of their needs, their cover and any gaps,’ he says.

Challenges for insurers 

This is clearly a growing — and challenging — opportunity for insurers.

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