The rise of the sharing economy model and gig economy, empowered by mobile IT and big data, has rapidly transformed an antiquated labor market, where the average independent worker often ended up dependent on temp agencies (which aggregated this labor pool) in order to find employment. However, this evolution of the labor market has come with legal pitfalls, stemming from companies wanting to categorize workers as independent contractors, instead of as employees, and thereby avoiding benefit entitlements like unemployment insurance and minimum-wage protections that are stipulated under state labor laws. This is a problem to which sector innovator ShiftPixy, Inc. (NASDAQ: PIXY) believes it has the answer, in the form of a new hybridized model where workers are treated as full-time employees of ShiftPixy, who are then lent out to clients on an independent contractor basis.
According to recent analysis by TurboTax owner Intuit (NASDAQ: INTU), which has been witnessing the growth of the gig economy via its own earnings, the broader freelancer labor market now makes up 34 percent of the workforce and is on track to hit 43 percent by 2020 (http://nnw.fm/Boef8). While we won’t see U.S. Labor Department data until next year on the freelance labor market, the Intuit research project conducted with Emergent Research indicates there are around four million quintessential gig workers, and that the number is likely to grow to 7.7 million by 2020.
Needless to say, ShiftPixy’s disruptive new hybrid worker classification model is perfectly timed to capture this projected growth, resolving the complications that have led sector juggernauts like Uber to face repeated litigation. Last year, Uber reached a landmark $100 million settlement to two class action lawsuits in California and Massachusetts over the status of its drivers as independent contractors (http://nnw.fm/d85pM).
GrubHub (NYSE: GRUB) also faced litigation last year over these same issues with its delivery drivers (http://nnw.fm/PYb0d), and the specter of such litigation still looms large for the industry, despite recent victories like the one in Florida (http://nnw.fm/B5joX), where an appeals court upheld the state governor’s decision that Uber drivers are independent contractors. Uber’s $68.5 billion valuation, backed by strategic investors like General Motors (NYSE:GM) and Microsoft (NASDAQ: MSFT), was recently pegged at just $50 billion by secondary shareholders (http://nnw.fm/Uf8lS). This decline has opened the door to up and comers like Lyft, which has backing from the likes of Icahn Enterprises (NASDAQ: IEP) and KKR & Co. (NYSE: KKR), as well as Chinese companies Alibaba (NYSE: BABA) and Tencent (OTC: TCEHY).
The recently launched ShiftPixy mobile app (http://nnw.fm/Bkrj1) allows the company’s employees, which it calls “shifters,” to access and select shifts in real-time from the pool of broadcasted open shifts on the ShiftPixy Shifter Network. This offers shifters an all new level of free agency as workers, while streamlining the overall process for business operators who have open shifts they need to fill by giving them real-time access to a wealth of fully-vetted and available shifter candidates. Moreover, this immensely powerful recruiting and scheduling platform tracks and communicates with fixed and flex staff, and it does so within an environment designed from the ground up to be compliance-driven. Accurate and simple pay management from the ShiftPixy platform, which adapts to most time and attendance systems, allows business operators to handle reporting and compliance without failure while enabling the fine tuning of escalating worker compensation costs.
ShiftPixy is basically the best of both worlds. On the one hand, you have unprecedented freedom for shift workers who get to be classed as full-time employees, and, on the other, you have a pre-verified ecosystem of candidates for worksite employers, so long as they are part of the ShiftPixy universe. ShiftPixy’s co-founder and CEO, Scott Absher, noted at the time of the app launch that the automation provided by ShiftPixy’s platform not only makes the worker onboarding process extremely simple and paperless; it also acts as a secure personal gateway for shifters to manage all of their employment data.
Perhaps signifying how ShiftPixy’s human capital management (HCM) platform is rebooting the temp worker and developing into a truly 21st century hub for workers and business operators alike, the company recently announced the opening of its first regional office in New York City’s historic Grand Central Station (http://nnw.fm/JL8cz). This move plants an unambiguous ShiftPixy flag on the 56 million-plus Northeast region, which is one of the mostly densely populated and important regions to consider when studying the rapidly expanding contingent workforce. Seen as a crucial market by management, New York City’s always-on, 24-hour nature, as well as the size of its leisure and hospitality industries, are inescapable catalysts behind the thriving local gig economy.
ShiftPixy’s uptake will most likely be driven by the sheer ease of use for business operators, who can utilize the platform to easily navigate complex regulatory mandates while minimizing the often daunting administrative burdens associated with shift work staffing in general. ShiftPixy’s comprehensive HCM ecosystem could easily become the standard solution for dealing with regulatory requirements like paid time off laws and Affordable Care Act stipulations, and it has drawn considerable attention from sector analysts since the company’s $12 million IPO in June (http://nnw.fm/bn4UR). Currently trading around $3.71 with a $105 million market cap, ShiftPixy made a good showing at the influential Drexel Hamilton 2017 TMT Conference in early September, where Absher was able to really demonstrate his three decades-plus of organizational development, capital development and employment industry expertise. The de-risked compliance environment will continue to differentiate Irvine, California-headquartered ShiftPixy from other gig economy operators, as the company continues to provide a foundationally pitch-perfect blend of insurance products, regulatory compliance services and proprietary human administration tools to a labor market whose future is still largely up in the air.
You might say that there is a new sheriff in town and that ShiftPixy’s quest to free the contingent worker is a noble crusade, but there is no need for such characterizations when it is clearly a well-timed and heartfelt Uberization aimed at transforming the temp staffing agency and PEO (professional employer organization) space in a way that is meaningful for often marginalized workers. ShiftPixy could become a real boon for unemployed, under-employed, and part-time workers. That potential, in and of itself, is an abundant investment proposal, as it represents significant good will and proactive public relations/marketing of the ShiftPixy brand, which appears to be a genuine solution to the problem of ensuring equitable employment practices in the gig economy.
Human Resources in an app that lets workers find shift gigs which fit into their schedules could be a real game changer for what is a large and growing population of gig economy workers.
For more information, visit the company’s website at www.ShiftPixy.com
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