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Escrow leads the gig economy growth

    “Which company do you work for?”

    In a world where more than 50% of the urban millennial population is self-employed, this is a question that is becoming increasingly obsolete as an increasing number of professionals are opting to freelance for an income. In the US, freelancers in the gig economy constitute one-third of the workforce. In the past five years, their numbers have increased by a staggering 3.7 million. This is only indicative for the trend to be replicated in a country like India where the proportion of the workforce is substantial. The freelance workforce in India, which was at a staggering 15 million in 2018, is set to double every five years as per predictions.

    What is it about freelancing that is luring so many young professionals away from more predictable and stable jobs with established companies? What is the reason for this unprecedented growth of the gig economy? One is that it gives freedom and flexibility with work and, therefore, in life. The prospect of being able to work in your own time and from anywhere, freedom from long term commitment to and engagement with a company, flexibility to maintain a decent work-life balance, opportunity to explore one’s skills in an open market, and many more such factors make the gig economy a booming one.  Furthermore, social media – where young professionals spend a significant amount of time to escape the monotony of a regular job – has become something of a glamorous professional profile for a growing number of freelancers, alluring more followers.

    While the lockdown to fight COVID-19 has restricted movement, an unprecedented amount of work has moved online. With a sharp increase in professionals experiences of working remotely with the flexibility of time, it is only apparent that the number of freelancers would increase faster than predicted. Besides, the proportion of outsourcing of jobs has shot up across the world as well. Companies don’t mind hiring someone on a short term basis for a project as long as the work that is delivered is of good quality. As companies increasingly outsource work to other companies, they realise that it not only more effective in terms of cost but also the quality of work.

    There has also been a recent boom in companies which operate simply by connecting service seekers to service providers. From food delivery start-ups to cab services and freelancing platforms, it has become far more comfortable to become a part of the ecosystem by knowing which of these companies match one’s profile and skill set.

    But how does all of this work? How does the client trust the freelancer to deliver high-quality work after receiving a payment? How does the freelancer produce excellent work for and trust a client who has not paid up upfront? Escrow! Escrow is the payment platform where payments of the commissioned work are safely parked under terms and conditions that are agreed upon by both parties. The instalments and frequency of payments are pre-decided in the contract digitally signed by both parties, and the amount is released or disbursed upon satisfactory submission of work.

    Without the security and transparency of payment provided by escrow, freelancing would be a far more risky and uncertain prospect that would dissuade more people than it would persuade. Just as one is assured of receiving a salary at the end of the month for all the hard work one puts in, freelancers the world over are assured, and more importantly encouraged, to take charge of their career and become empowered and independent members of the workforce. In a nutshell, escrow is the engine that is propelling the growth of the freelancing world and encouraging a robust growth of the gig economy.