- Charging monthly fee of US$20 for solo, US$40 for teams
- Model is expected to remove the need for talent to leave the platform
“You are the one delivering the work, you should get paid the full amount for that work,” said Rashvin Pal Singh, group CEO of Mereka, an education technology provider.
He is referring to knowledge based gig workers, as opposed to delivery and rideshare, where the business model of platforms such as Upwork and Fiverr is to take a cut, ranging from 10% to 20% from each job the workers get through the platforms. One platform, Toptal which connects businesses with software engineers, designers, finance experts, product managers, and project managers, charges up to 40%.
Finding this to be fundamentally unfair, “because the person delivering the service is the expert, but the platform as an intermediary takes a huge cut of their earnings,” said Rashvin, Mereka aims to disrupt this with the introduction of its subscription based talent marketplace platform in June where talent do not have to pay the platform for the number of jobs they get. Rather users pay a US$20 (RM88) monthly fee for individuals or US$40 (RM176) for teams. “You pay us for access, versus the other way around where you come on board the platforms for free, but they keep taking 20% to 40% of what you earn.”
In tandem with launching the talent platform Mereka has launched an equity crowdfunding campaign on pitchIN with the target of raising RM1.5 million. As of 6 Nov, it has reached RM800,700, mainly from existing investors from its 2018 campaign that raised over RM1.6 million.
[RM1 = US$0.227]
The funding will address the two main challenges Rashvin faces. Like all socially-driven impact companies, finding the balance in delivering impact and being inclusive while addressing its own business needs at the same time is a high wire act. The funding will act as a safety net should it fall.
The second is, with a seven-person tech team, the need for continuous investment in tech development for long-term results versus balancing cash flow for the current year.
“We want to boost our tech development,” Rashvin said.
Having said that, Mereka has been cash flow positive for the past three years.
Pivoting to the subscription model
To be sure, the platform did not start out with the subscription modal when it was first launched in 2021. While it offered job matching and training programs, it was mainly a resource management platform that allowed users to book not just training programs offered by Mereka but also rent facilities available at its large makerspace in Kuala Lumpur. It also partnered with Taylor’s University and some TVET/vocational centres in Kuala Lumpur to list their facilities for rent.
It adopted the commission model as that had the lowest barrier to entry and was the market norm.
Despite seeing 220,000 learners (from 2021 to end 2023) access various courses with 80% coming from Indonesia thanks to a partnership Biji-Biji Initiative Sdn Bhd (Mereka is a subsidiary) had with Microsoft in 2022 for the Skills for Jobs Indonesia programme where Mereka served as implementing partners, revenue was not great.
It was here that Rashvin also noticed the bugbear of all platforms that match gig workers to jobs – workers cutting out the platforms to deal directly with clients. “There was no loyalty to the platforms, but I understood this,” said Rashvin. “Because the challenge with transaction-based models is once you start finding a few projects on the platform, you will tend to find a way to leave it, because you would want to avoid paying the commission per job.”
Taking the high moral ground with the subscription model that allows talent to keep all their earnings makes for good headlines but on a practical level it also helps build loyalty and reduces the risk of talent wanting to deal off-platform with clients.
“We will also keep adding value to our customers like giving them access to our academy courses, while matching them with jobs via our job board. Building loyalty and making the platform more equitable truly allows us to stick to our motto – ‘Skills to Income’, said Rashvin.
The use of “expert” to describe the talent is deliberate as the marketplace does not just target knowledge workers but also those who are experts within their fields, ex craftsmen, though this pool makes up less than 5% of the talent.
With the gig economy in Southeast Asia valued at US$3 billion, said Rashvin, Mereka is targeting to sign-up 50,000 experts on the platform over the next eight years.
The unfairness in compensation between labour and knowledge-based work
The unfairness in compensating talent first hit Rashvin at Biji-Biji Initiative where he was co-founder and CEO. Launched with some friends in 2013 Biji-Biji is a social enterprise in Malaysia that focuses on sustainable development through technology and education.
During the first three years of Biji-Biji, although they were doing production work like woodworking, metal fabrication, handmade bags for women, the challenge faced was being valued as mere ‘labor’ work. They were not being paid fairly for what Rashvin says was skilled labor work with payment ranging between RM100 to RM150 a day.
This realisation only hit him when Biji-Biji started offering educational programs in 2015. “We realised we were getting RM150 to RM200 an hour from customers learning from instructors versus the same fee per day for any production work,” Rashvin said.
This glaring disparity in compensation led to the establishment of Mereka in 2017 as a subsidiary of Biji-Biji Initiative, targeting corporates to deliver higher value education and coaching.
Seven years later, Mereka has evolved into a talent development ecosystem preparing creatives, professionals and entrepreneurs for the future of work. “We provide our learners with access to digital entrepreneurship content and income generating opportunities through our talent marketplace,” said Rashvin.
He hopes the market will respond positively to the model. “Because the money is yours, there is no incentive for you to transact off-platform.”
He expects the model to be sustainable because Mereka will have recurring income while talent who join the platform get access to two things, continuous income-generating opportunities and upskilling opportunities (which they have to pay for).
Mereka will launch a free tier in January, where users can access the platform’s digital content but not its income-generating opportunities.
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
