The Demyst Team

The Demyst Team

September 20, 2021

Mitigating Marketplace Onboarding Risk With External Data

Last week, the Demyst team attended the Marketplace Risk Management Conference in San Francisco attended by notable players such as AirBnB, Uber, Lyft, and DoorDash, as well as dozens of emerging players and service providers (external data providers, legal firms, insurers, etc.). There was a notable buzz in the air as marketplaces, particularly in the ridesharing industry, are aiming for a strong comeback as economies recover from the slump associated with the pandemic. And as it was our first conference in a while, we welcomed it!

External Data to Onboard Gig Workers

With growth comes new challenges in onboarding gig workers (e.g., drivers, contractors, professionals, etc.), onboarding customers, and managing interactions between the two parties. Luckily for marketplaces, there are now a growing number of external data partners (e.g., Checkr, Vetty, Ekata, Socure, Mitek, Prove, all of which attended the conference) to help them address the customer onboarding challenge. Below we identify a few external data checks that are particularly relevant:

  1. Mobile Device Verification: As almost all marketplaces are now mobile-first, the first check in onboarding a gig worker is to ensure that their device is not risky and not associated with fraud rings.

  2. Identity Verification: As a gig worker joins a platform, it is critical to verify their name, address, phone number, and email, in processes that are similar to KYC checks. 

  3. Credentials Verification: In order to participate in the platform's activities, the gig worker must provide proof of minimum required credentials (e.g., driver's license or professional certification).

  4. Background Check: In order to ensure ecosystem security, marketplaces should scan public records data for criminal history, accident history, and watchlists. In the context of the initial two categories, marketplaces should consider the implications of rules that are overly strict.

  5. IP Address and Geolocation: Depending on the platform, it is critical to ensure that a gig worker's location is within the vicinity of acceptable use. For example, it may be concerning if an Uber driver registered in Austin, Texas is attempting to pick up riders in New York City.

Our Take

The pandemic accentuated demand for certain types of gig workers (e.g., remote web developers) while de-emphasizing demand for others (e.g., Uber drivers). Our view is that as demand accelerates across all marketplaces, there will be a two critical needs. First, as large numbers of gig workers attempt to join marketplaces, onboarding workflows will face new pressures. Second, these marketplaces will need to actively monitor gig workers to ensure their characteristics, profiles, and behaviors are consistent over time. The pandemic recovery period will be an exciting time for marketplaces and we're eager to work with our consumer, property, and business, data partners to deploy api-based solutions to marketplaces that optimize for speed, reliability, and customizability.

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