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Did Upwork and other gig marketplaces miss the opportunity to capture contractor payment/EOR market or was that new territory?
Ved Sinha
Former VP Product at Upwork
Traditionally, staffing companies provide employer-of-record or EOR services with W-2 employees. The new work platforms typically wanted to be 1099, or non-employee, in order to be very asset-light.
Now, what's happened is that because of COVID, it's created a space for hiring remote workers - permanent and contractor - in different countries, not just in the US . There were companies doing international employment compliance before, but it wasn't as big an opportunity compared to after COVID.
So yes, because of their historical focus on 1099 contractors versus EOR/W-2, platforms like Upwork are missing a big opportunity. They can today handle 1099-class workers anywhere in the world. But for W-2 payroll, Upwork has a product that's only on the US side. It seems to me that there's a big opportunity to offer that same W-2 type payrolling service, not just in the US, but overseas as well.
Because a company like a Deel would be developing a global supply base, supply network, and it's totally logical that they would eventually build a marketplace layer on top of the payroll.