The impact of digital saving account on savings and welfare: Evidence from gig-economy workers in Peru

Drivers will be offered a savings plan through the Cabify app. Drivers will receive an in-app message with an invitation and a link. By doing click to the link, the driver will arrive at a landing page which includes the detail characteristics of the savings product, a promotional video, a three-question survey, and an online consent document. The in-app message will be reinforced with pop-up messages which do not require the driver to open the Cabify app. This pop-up will also include the invitation and the landing page link. Drivers can opt-out of the savings plan at any time without penalty.

After the driver signs the online consent, Cabify will sent his or her information to the bank so they can open a new bank account for the driver. This account has no transactional or logistical cost and is an account from the Peruvian bank, Banco de Crédito del Perú (BCP, for its initials in Spanish). BCP has also developed a mechanism that will allow drivers to collect their debit card in any digital platform located in their agencies . Using the digital platform, drivers will be able to collect their card in less than 5 minutes. They will also be able to follow their savings through the BCP app.

The savings plans will be offered for four weeks.

Drivers will be offered a savings plan through the Cabify app. Drivers will receive an in-app message with an invitation and a link. By doing click to the link, the driver will arrive at a landing page which includes the detail characteristics of the savings product, a promotional video, a three-question survey, a frequently ask questions section, and an online consent document. The in-app message will be reinforced with pop-up messages which do not require the driver to open the Cabify app. This pop-up will also include the invitation and the landing page link. Drivers can opt-out of the savings plan at any time without penalty.

If the driver decides to save with plan, he or she just must complete the small survey and sign the digital consent document. After this, the driver will receive an e-mail and a WhatsApp message welcome him or her to the plan given the driver additional information about the account.

Also, Cabify will sent his or her information to the bank so they can open a new bank account for the driver. This account has no transactional or logistical cost and is an account from the Peruvian bank, Banco de Crédito del Perú (BCP, for its initials in Spanish). BCP has also developed a mechanism that will allow drivers to collect their debit card in any digital platform located in their agencies . Using the digital platform, drivers will be able to collect their card in less than 5 minutes. They will also be able to follow their savings through the BCP app.

It is important to mention that, the affiliated driver will receive an e-mail from Cabify and a WhatsApp message from the research team every week detailing the successful deposit of his or her savings and the amount. The WhatsApp message will also help us to reach the driver in case there is any question.

The savings plans will be offered for four weeks.

2019-10-15

2021-03-31

The main variables of interest of the study are: (1) take-up of the savings plans, (2) contribution and savings of affiliates to their digital savings accounts, and (3) commitment to their savings.

Each variable is defined as follow:
(1) Take-up of the savings plans: This variable will take the value of 1 if the driver affiliates to the plan and 0 otherwise. This outcome is directly obtained when the driver decides to affiliate to each saving plan. We will have direct access to a real time database where we will find the status of each driver.
(2) Contribution and savings of affiliates to their digital savings accounts: This variable is defined as the drivers' total savings. The data about the drivers' savings evolution will be provided by Cabify and BCP. The research team will receive information about the savings account movements every two weeks.
(3) Commitment to their savings: This variable is defined as the period, in months, that the driver retains his or her savings. The data to build this variable will be provided by the bank. As mentioned before, the research team will receive information about the drivers' savings account movements every two weeks.

Treatment 1 (T1) called “Emergency Saving Plan” offers an automatic savings plan of 2% of a driver’s weekly earnings to cover emergencies. The drivers assigned to this treatment will received in-app and pop-up messages inviting them to visit the page. After signing the online consent, the driver will receive a detailed email and WhatsApp message bringing him or her the number of the new bank account and when they can collect their debit card. Every week, between Wednesday and Friday, the driver will receive an email and WhatsApp message with the detail of his or her weekly savings. Additionally, with the opening of the new account, the driver will receive a bonus of 30 soles (about $10) to encourage them to save more and to pay attention to their new savings account.

Treatment 2 (T2), called “Smart and Flexible Saving Plan”, consists of offering to the drivers the option to save 3% of their weekly earnings every time their earnings surpass a specific threshold chosen by each driver. This intervention is an adaptation of the SMarT plan introduced by Thaler and & Benartzi (2004) and its applied to a digitalize workforce from the gig-economy. T2 is expected to cover also emergencies, reduce income variability and thus smooth consumption.

Like T1, each enrolled driver will receive a detail email and message bringing him or her the number of the new bank account and where they can collect their debit card. The new bank account will be open in the next 48 hours. Additionally, every week, between Wednesday and Friday, the driver will receive an email and WhatsApp message with the detail of his or her weekly savings.
Additionally, with the opening of the new account, the driver will receive a bonus of 30 soles (about $10) to encourage them to save more and to pay attention to their new savings account.

Control Group (C) This group will not receive any type of treatment.

Treatment 1 (T1) called “Emergency Saving Plan” offers an automatic savings plan of 2% of a driver’s weekly earnings to cover emergencies. The savings plan is labeled because literature has shown that it helps individuals to not withdraw savings when they have a committed purpose. T1 might help individuals to smooth consumption in case of an emergency, solves behavioral biases such as procrastination and introduce a psychological cost of not saving by using the emergency tag.

As mentioned before, the drivers assigned to this treatment will received in-app and pop-up messages inviting them to visit the page. After signing the online consent, the driver will receive a detailed email and WhatsApp message bringing him or her the number of the new bank account and when they can collect their debit card. Every week, between Wednesday and Friday, the driver will receive an email and WhatsApp message with the detail of his or her weekly savings.

Additionally, with the opening of the new account, the driver will receive a bonus of 30 soles (about $10) to encourage them to save more and to pay attention to their new savings account.

Treatment 2 (T2), called “Smart and Flexible Saving Plan”, consists of offering to the drivers the option to save 3% of their weekly earnings every time their earnings surpass a specific threshold chosen by each driver. This intervention is an adaptation of the SMarT plan introduced by Thaler and & Benartzi (2004) and its applied to a digitalize workforce from the gig-economy. Drivers have incomes that fluctuate from day to day, so they cannot commit to save a fixed percentage of their earnings, especially in low income periods. However, in high income periods, they might want to commit and even save a larger amount. In this case, for example, a driver will not necessarily save every week if he or she does not manage to generate enough income. If the driver has a good week though, he or she will start saving automatically. T2 is expected to cover also emergencies, reduce income variability and thus smooth consumption. T2 will also solve the problems of self-control, procrastination, and loss aversion.

Like T1, each enrolled driver will receive a detail email and message bringing him or her the number of the new bank account and where they can collect their debit card. The new bank account will be open in the next 48 hours. Additionally, every week, between Wednesday and Friday, the driver will receive an email and WhatsApp message with the detail of his or her weekly savings.

Additionally, with the opening of the new account, the driver will receive a bonus of 30 soles (about $10) to encourage them to save more and to pay attention to their new savings account.

Control Group (C) This group will not receive any type of treatment.

Drivers were assigned to treatment and control group considering a stratification process based on three observable characteristics: weekly earnings with the Cabify platform, age, and years affiliated to Cabify measured as the number of years since the drivers’ first drop-off. The unit of randomization was the driver.

About the stratification process, the first observable variable, weekly earnings, was classified into three subgroups (low, middle, and high income) considering the distribution of this variable. The second variable, drivers’ age, was classified into two subgroups considering 39 years old as the cutoff between the two subgroups. Lastly, the third variable years affiliated to Cabify, was classified into two subgroups considering the distribution of the variable.

The randomization unit is the driver. The driver is identified using a code called “Driver ID”.

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5,022 drivers

1,674 drivers by treatment arm and 1,674 drivers for the control group.

The main variable for the power calculation if the take-up of the offered savings plan. We consider a minimum detectable effect (MDE) of 15%. This percent is based on a literature review from other savings intervention in developed and developing countries. The effect considers a statistical power of 80%, an alpha level (significance level) of 5%, and a standard deviation of one. For each group, the required sample for each treatment and control group is 699 observations which makes and overall sample size of 2,097 drivers.