THE GIG ECONOMY WON’T LAST BECAUSE IT’S BEING SUED TO DEATH

18. February 2015

Date: 17-02-2015
Source: Fast Company

If Uber, Lyft, and others don’t stop relying on contract workers, business could crumble. Is it time for a new definition of employee?

When Vilma and Greta Zenelaj came across a Craigslist job ad that promised they could make as much as $22 an hour and get paid fast, it seemed like a good deal. The Albanian sisters had moved to Santa Monica to get a foothold in the film industry, and though they had produced a few independent features, they had run out of savings before they could also make a living. Now they were desperate to pay their bills.

Handy (then Handybook), the company that posted the Craigslist ad, is best known as a cleaning service. But unlike Merry Maids or your local cleaning franchise, it doesn’t actually employ any cleaners. Instead, it relies on an army of independent contractors to complete jobs, taking a 15% to 20% commission of every hour worked. It’s part of the “gig economy,” a much-hyped new class of the service industry where workers are expected to operate like mini-businesses. The influence of these companies is growing: according to an analysis by Greylock Partners, the value of transactions over platforms such as car services Lyft and Uber, grocery delivery service Instacart, courier service Postmates, and others could grow as large as $10 billion this year.

IT WAS TRUE THAT WHEN THINGS WENT WRONG, THEY WERE RESPONSIBLE. Read the rest of this entry »

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