Austin-based Honest Dollar has partnered with Lyft to provide its contract employees with a retirement savings plan.
Honest Dollar’s savings plan is designed to be a flexible way for contract workers to save for retirement with Lyft’s 100,000 drivers getting access to the benefit first. But Honest Dollar plans to roll out the savings plan to more freelance workers.
The market is large and growing. Today, an estimated 53 million Americans work independently as contractors, part-timers and solo business owners, according to Core Innovation Capital. And that is expected to increase to 66 million Americans in the next five years.
“The explosion of the gig economy brings an opportunity for progress and modernization of the extremely antiquated market of retirement benefits. Honest Dollar is following through on our promise to revolutionize financial services by delivering innovative products to underserved audiences,” Will Hurley, CEO of Honest Dollar, said in a news statement. “We started with small businesses and startups who weren’t offering retirement benefits because they were too costly and confusing, and follow today with a product for 1099 employees that works for everyone – employee, employer, and our changing economy.”
The savings plan meets an unmet need for independent workers, Hurley said.
Under the partnership, Honest Dollar will provide Lyft drivers with access to its new 1099 service for $3 per month. For the first 2 months, Honest Dollar will waive the $3 per month fee. And the first 10,000 Lyft drivers to sign up before the end of 2015 will be provided the service for only $1 per month in addition to the free months.
“We hear from drivers every day who use Lyft to help secure a bright future, from paying tuition to saving for a first home,” Oliver Hsiang, Lyft’s Vice President of Partnerships, said in a news statement. “We’re excited to partner with Honest Dollar to help drivers achieve these goals. This first-of-its-kind product is designed to meet the unique needs of independent contractors through access to financial planning and investment tools.”