Lessons from Roll

Push-button Employment for a Brighter Future of Work

Imagine you're living in Alabama earning the median hourly wage. At the end of the week, you take home $470. Your car breaks down and your mechanic says getting back on the road will cost $400. You're among the 140M Americans who can't cover a $400 emergency expense. You're in trouble and need extra money now. You use a car title lender to borrow the money, get your car repaired, and you're back on the road.

Car title lenders typically extend credit on 30 day terms, and charge 25% of the value of a loan as an origination fee. So now you have a month to come up with $500. You need a new part-time job and fast. You spend an entire day over the weekend making rounds to a handful of large employers like Walmart, Starbucks, and McDonald's to complete their job applications.

It'll be a few days-to-weeks before you can commute half an hour to revisit each place during the manager's hiring window for a job interview. Do you have the relevant experience? Are there any blemishes on your resume? Do you have a lot in common with the hiring manger so he'll take a personal interest in hiring you? Were you charming in the interview? The hiring manager has total control over the job you need to repay your title loan. Hopefully, in a few days, you'll hear back from one of the managers who liked you and wants to offer you the job.

In the US, hourly labor has been a buyer's market for decades - we know this because wage growth has been practically nonexistent. Hiring is slow and rotten with bias because it's run by prejudiced people responding to risk-averse incentives.

You've been trying to recover from the shock of an emergency car repair for a few weeks. You got a loan, spent a day applying for jobs, spent hours attending interviews, were lucky enough to land one, and now the hard part begins. You're already working 40 hours a week to take home $470 and, on top of that, you now have to figure out how to squeeze a few 8 hour shifts at your new job into your already full schedule. Hopefully, you're not spending about 3 hours a day caring for your child (like the average mother with a kid under the age of 6), going to school, or taking care of an elderly parent.

Jobs are scheduled in 8 hour shifts for the convenience of management.

Another week or two goes by before your schedule lines up with the shift schedule at the new part-time job, but the good news is you're finally at work. It'll be another week or two before you get paid for the first time, and it's been a month already since you took out the car title loan, so you've got to return to your lender and roll the loan over. Another $100 to originate a new loan. Your first payday comes and 2 shifts at your second job turn into $188 in your bank account. You're working 56 hours a week now, plus you added 2 hours of commute to your week with another job. After a month, you've earned enough to repay your car title loan, if everything works out perfectly. If you couldn't get 2 whole 8-hour shifts each week, or your payday doesn't line up with your loan repayment date, or you spend literally any of the extra money you made on other stuff, you're going to need to roll the loan over again. Another $100 in fees means another crazy packed work week - just to get back above water.

It's possible to get out of a $400 emergency for only $600, but realistically it's going to cost $700.

Applying for a job takes hours. Getting a job is rife with prejudice. Accommodating a second 8 hour shift is really challenging. Payroll processing adds more delays before you'll see some take-home pay. It's a process that really sucks, even if you're not paying $100 a month in fees on a predatory loan. Companies have little incentive to compensate workers well while it's so obviously costly for workers to switch jobs.

Our current employment system is broken because it was designed by and for managers, not workers.

Compare all of that to ride-share and it's little wonder 3M Americans have dipped a toe into the gig-economy there.

Download an app to start working. Schedule your hours by tapping a few buttons. Switch jobs by switching apps. Get paid instantly if you want. Thinking back on how you dealt with that $400 emergency, if you'd started driving for Uber as soon as you'd taken that car title loan, you'd have saved a month getting the job, and probably another month of rolling over your loan to work around the payroll cycle. It would have saved you $200 in fees - more than a week's take-home pay from the part-time job!

In the US there are 10 times as many ride-share drivers as taxi drivers.

For workers, finding jobs in the gig economy is irresistibly simpler than traditional employment. Unfortunately, gig-work comes with a bunch of other tradeoffs. They're a major reason over half of ride-share drivers churn each year, according to our user research. It's no secret a ton of the structural inequalities in our society have their sources in the labor market, so for us making working in the gig-economy sustainable for everyone is key to a fairer tomorrow for all.

People want to know how much they're making from their work.

When you work at Wal-mart, you know exactly what you're making per hour and what you'll take-home on payday. Figuring out your numbers as a ride-share driver turns into statistical algebra problem, where you need to model the distribution of your revenue, account for cash and accrued expenses, do the multi-jurisdictional tax math, and then finally arrive at a take-home pay figure. At Roll, we built the world's first paystub for ride-share, so drivers can see what they're actually taking home - without busting out a spreadsheet.

When you drive for Uber, you're responsible for corporate finance.

Imagine working at American Airlines, and one day, your manager comes over and says "Hey Zane, hope you saved 30% of your income last year! Because now you have to pay taxes or face criminal prosecution." Sounds ridiculous, right?

Independent contractors get all their income dumped into their personal bank accounts. Figuring out how much money they need to set aside for a variety of different things - like how much money should be set aside for gas tomorrow, tires next month, taxes next year - turns into a second job.

We're building a banking solution that automatically budgets for expenses so workers don't need to worry about constantly recapitalizing their jobs from their personal funds.

People want to know their paycheck is theirs to keep without the specter of unexpected major expense.

When you work at Jamba Juice, there's no world where you go into work one week and your manager says "Oops, I didn't budget enough for building maintenance, so everyone needs to chip in all the money you made last month so we can fix the roof so we can run the business today so we can all have jobs".

For ride-share drivers, their ability to earn money is contingent on their ability to fund the operation of their vehicles, and they regularly end up out of a job - and a car - when major expenses pop up. We're making access to working capital available based on the strong signals available in gig work history, ratings, and banking data - so people aren't left with nowhere to turn but 300+% APR on car title loans.

At Roll, we're obsessed with translating the best parts of traditional employment for the gig-economy. Because when working gigs is as easy as collecting a paycheck, we'll unlock tens of millions of hourly workers for new on-demand marketplaces, bringing more economic freedom and flexibility to everyone.

Everyone should have the opportunity to self-determine their work.

Originally published on the Fintech Today Blog