One enduring feature of the gig economy is “multi-apping” — driving or delivering for several platforms. Many gig workers drive not only with Uber, for example, but with Lyft, too.
The problem, though, is that gig workers don’t receive benefits from any of the platforms they work for due to their legal status as independent contractors, which has contributed to a back-and-forth between gig workers and gig companies that has roiled the gig economy for months.
But what if gig workers not only received benefits, but received them across all of the apps for which they work? That’s exactly what Stride Health plans on doing with the $47 million Series C funding raise it announced on Tuesday. The California-based company will use the money to continue its mission of establishing portable benefits accounts for independent contractors, freelancers and part-time employees who lack necessities such as health care and dental insurance.
The round was led by King River Capital with participation from Allstate (NYSE: ALL) and Mastercard (NYSE: MA), with which Stride partnered last year to offer portable benefits accounts to Mastercard and Mastercard partner cardholders. The Series C was also supported by Stride’s existing investors, which include NEA and Fidelity’s (NYSE: FIS) venture capital arm, F-Prime Capital.
A portable benefits account can be transferred between employers and can apply to a range of benefits, from medical to vision to dental plans, but just about any defined-contribution plan is covered.
Stride’s portable benefits accounts are aimed at workers who lack the safety net of a traditional employee. The company provides dental insurance that is accepted at over 300,000 locations across the country, vision insurance with access to over 84,000 vision specialists and life insurance with flexible coverage. And, through a unique partnership and integration with healthcare.gov, Stride enrolls independent contractors in Affordable Care Act health insurance.
The service also helps gig workers manage and minimize taxes and provides access to a suite of financial benefits and guidance.
Over 120 companies on the Stride platform offer the company’s portable benefits packages to their workers, including Uber (NYSE: UBER), DoorDash (NYSE: DASH), Instacart, Amazon (NASDAQ: AMZN), Grubhub (NASDAQ: GRUB), Etsy, Patreon, Gopuff and more. According to the company, health enrollments more than tripled from 2020 to 2021. Around 2.7 million users were active on the platform as of August, and Stride says they’ve collectively saved about $2.7 billion.
“Getting your own benefits can be stressful, confusing and expensive for independent workers,” said Noah Lang, co-founder and CEO of Stride. “An estimated 90 million Americans will work independently by 2028, and they all deserve to feel financially secure. That’s why we’ve built a modern, flexible benefits system for independent workers — because benefits shouldn’t be reserved for full-time traditional employees.”
The investment Stride received from Allstate will go toward expanding the range of insurance benefits available on the Stride platform, as well as extending health care benefits to Allstate customers. And with the funding from Mastercard, Stride will expand the partnership the two companies entered into last year.
Stride has also been working to improve other aspects of gig workers’ financial stability. Last month, it partnered with fintech company Payfare (TSX: PAY.TO) to offer real-time payments to any customer with independent contractor status.
Gig workers have been pushing for expanded benefits and protections for years now, with drivers for Uber, Lyft, DoorDash and Instacart repeatedly protesting and going on strike over what they see as poor treatment. As independent contractors, gig workers are denied the protections extended to employees under the Fair Labor Standards Act, such as a minimum wage.
Despite protests, gig companies spent millions pushing forward the passage of California’s Proposition 22, which exempted rideshare companies in the state from AB5. That allowed platforms like Uber and Lyft to continue to classify their workers as independent contractors.
The result has been their drivers turning over at astounding rates, to the point where the companies are pushing a bill in Massachusetts that would create their own version of a portable benefits account. The bill can’t be voted on until November 2022, at the earliest.
Stride, though, is making portable benefits accounts available today for gig workers all across the country. King River Capital co-founder Megan Guy, who was brought on as a Stride board director as part of the funding raise, explained why that’s important: “All Americans benefit when more of us have access to affordable, portable benefits.
“We need a system that mirrors the flexible, individualized nature of work today and that helps the 59 million independent workers in the U.S. navigate the complex world of benefits and financial security,” she continued. “The speed at which Stride’s business is scaling speaks to the urgency of this need and the value that its platform delivers to this essential, yet underserved, segment of the U.S. economy.”