COVID-19 brings uncertainty for gig economy insurance as Just Eat Takeaway scraps model
The spread of coronavirus and resulting lockdown measures had the potential to spark considerable growth in the gig economy insurance market. Consumers were no longer able to visit restaurants and instead shifted towards takeaways, increasing the demand for delivery drivers. However, Just Eat Takeaway has announced it will stop using gig economy workers – a move that could stifle growth in the insurance market.
Research from GlobalData’s 2020 UK Life and Pensions Survey indicates that 42% of those aged between 18 and 29 have less than £2,000 in savings. Given this demographic are the most active within the gig economy, the shift towards more stable employment terms will be welcomed by many.
With Just Eat Takeaway set to become the world’s largest food delivery company outside of China, its move away from the gig economy form of employment could set a precedent in the food delivery market.
This will undoubtedly affect the burgeoning gig economy insurance market given that other well-known brands could follow suit. However, there will continue to be demand for flexible insurance coverage for gig economy workers and freelancers, as individuals seek increasingly flexible employment terms or look to supplement their main income in the aftermath of coronavirus.
The insurance industry should see this as an opportunity to draw attention to the benefits their specialist insurance products can bring for those working in the gig economy, allowing them to continue to benefit from flexible working choices whilst having the peace of mind that they are protected.
The economic recession caused by COVID-19 will result in a number of individuals becoming unemployed. The gig economy may be seen as an attractive option to have a source of income whilst searching for full-time employment. This in turn will create an opportunity for the insurance market to grow, as given that these individuals are potentially financially vulnerable their need for insurance is higher.