Before the pandemic hit, the gig economy was already on the rise. Once we entered COVID-19, many companies had to quickly pivot and figure out how to survive in the world of shutdown, lockdowns, and restrictions. No longer could consumers go into restaurants, stores, shopping centers, etc. So where did a lot of these companies turn to? Delivery.
Some companies struggled with where to start or how to rapidly implement a delivery program. Should they have a website that shows all their offerings, how would they employ people, what ecommerce platform should be implemented to receive and assign orders, and how to handle the last mile delivery?
There are many factors to think about as a company attempts to rapidly grow their business model. Many companies turned to 1099 independent contractors (gig workers) or the gig model to execute the delivery of their products. While companies want to have control over their W2 employees, there are many pros to having a 1099 workforce and many discovered that it is still possible to have a great deal of control in an independent contractor model:
Having a 1099 workforce can help your bottom line and at the same time offers great flexibility to scale up and down. Having 1099 workers, can at times position your company to generate more revenue, which of course impacts the enterprise value positively..
There is an entire world of people that highly value a flexible schedule, working when they want to work, and not working when they wish not to. Having a 1099 workforce allows these workers to set their own schedule.
With W2 employees you need to offer an enticing benefits package that would cost the company more money. With a 1099 workforce, the cost for benefits decreases dramatically as independent contractors are just that; they are self employed. Insurance companies are trying to stay relevant to 1099 workers and are offering them competitive packages. It’s surprising what some companies are willing to try and package to make a deal with independent contractors.
When you have 1099 workers they often have a fair amount of their compensation tied into completion of individual jobs basis versus pure hourly. This makes for a more productive work force as the more jobs they do the more money they typically make. No longer are they sitting around watching the clock to punch in / out, but they’re hustling to get the job done. This also weeds out the unproductive workers. In return the workers can make more money than they had as W2 employees.
This really opens up new opportunities of working or getting the job done allowing 1099 workers to do the job. While you might lose a modicum of control of the worker in this process, you can make your company more efficient.
Having 1099 workers opens the door for them to work for other companies at the same time. If your company can only offer a limited amount of jobs or hours, the worker has the option to stay busy in between that time and you’re not having to pay that hourly rate.
The gig economy is continuing to grow and constantly changing. Over the past 15 or so years, people have been pushing to have more flexibility in their careers and allowing a 1099 independent contractor model can allow for that flexibility and competitive edge. Delivery Driver Network (DDN) helps companies ensure they are following the right guidelines when it comes to having a 1099 workforce. With our innovative solutions and proprietary platform, DDI helps companies:
- Recruit, Onboard and Screen Top Quality Driver-Partners
- Assist with Accounting, Payroll and Tax Services
- Provide Risk Management through Compliance and Legal Expertise
- Provide workers the ability to stay covered with cohesive insurance option and dynamic Screening capabilities
With over 25 years of experience in the rapidly growing gig economy means we have the know-how to empower clients across all industries that utilize independent contractors for last-mile deliveries.