On-demand. It makes everything sound so easy. For the consumer, app-based enterprises offer every service at the tap of a screen, from takeout to tutoring, babysitting to bookkeeping. For the worker, the on-demand labor market demands much and gives little, rife with unstable wages, erratic schedules, and intensifying precarity.
Now gig workers are realizing putting a crappy job on a platform isn’t particularly innovative. It merely replicates and intensifies an age-old reality of worker exploitation, casualized labor, and undermining of worker protections.
What is new, however, is perhaps something labor advocates haven’t anticipated: A few tech-driven on-demand companies are rediscovering the old rules of labor to inject fairness into the “new economy.” So what can labor learn from the brave new world of gigonomics?
National Employment Law Project (NELP) has flagged case studies of companies that have managed to break with the system by providing instantaneous services via swipe, as well as stability and control for their workforces. The good gigs NELP has outlined share a key feature: Workers are treated as regular employees, classified as “W-2s” rather than independent contractors or “1099ers.”
These tech-oriented companies show that, while “disruption” aids innovation, stability fosters workplace fairness.
Managed by Q, an on-demand office-staffing agency, maintains a full-time permanent workforce, not just anonymous temps. Janitorial and maintenance jobs—a sector generally associated with marginalized low-wage labor—pay upwards of $12.50 an hour, with health and retirement benefits along with stock options. Though the venture remains small and nonunion, it shows how flexible labor is not incompatible with long-term, stable employment and worker equity.
In the ride-sharing sector, some worker-driven app-based business are trying to counter Uber’s notorious model of irregular shifts and volatile earnings. Union Cab in Madison, Wisconsin, for instance, uses an online platform for dispatching drivers but is worker-managed through a cooperative structure.
The Boston-based shuttle service Bridj presents a direct counterpoint to the Uber system by meshing flexible transport with solid labor protection: an app-based “adaptive” travel network with a permanent driver workforce. Drivers get healthcare, regular schedules, and a fleet insured and maintained by the company. Last November the company jumped on the Fight for 15 bandwagon, providing a guaranteed $15 hourly wage to drivers and even challenging other startups to follow suit.
In the long run, businesses may find it wiser to build a profit structure on rights rather than exploitation. The crisis of on-demand work is that big players like Uber try to have it both ways: demanding to control and degrade workers’ labor conditions without offering the protections and job security that labor laws mandate.
According to NELP, returning to a regular employment system in these freewheeling industries could improve conditions in both digital and analog workplaces.
Integrating labor protections into platform-based work could curb the downward spiral of nonstop labor pressure in a 24/7 “always on” global commerce system. Likewise, when using an app to provide non-virtual services like housekeeping or personal catering, workers can actually be empowered, rather than disenfranchised, by technological streamlining of tasks and scheduling. A good gig entails a mutual contract of rights and responsibilities, which can be codified in the digital labor sector like any other program.
Writing at Quartz, Marcela Sapone, head of the personal cleaning agency Hello Alfred, described the growing pains facing the app-based sector. Platform-based jobs tend to “turn people into transactions rather than building meaningful relationships that could foster their career and skill development.” Meanwhile companies that use independent contractors have “no onus to provide meaningful work, training, or career advancement.” Hello Alfred decided a W-2 system provided a more productive option for their service personnel.
California-based startup Eden, an on-demand office maintenance and IT support outlet, recently shifted its team specialist “wizards” (who handle jobs ranging from tech support to painting) from 1099 to W-2 after realizing it was the best way to ensure a quality workforce.
Co-founder Joe Du Bey tells The Nation, “Ten ninety-nine models tend to have lower commitment because people aren’t building a career often in the gig economy. Some companies chose them because they tend to have lower costs in the short term.” In his experience, when workers were just 1099ers, “we had a lot more churn; people did not feel nearly as invested in [the company].”
With a small but growing workforce of about 75 employees, Du Bey says there is less turnover now that workers are settled in permanent jobs, which in turn fosters longer-term relationships with business clients.
“Fundamentally if you want someone to do world-class work and you want them to be proud of what they’re doing…it’s essential for them to be W-2 employees.”
Some on-demand companies have proposed a third categorization for workers—sometimes dubbed “dependent contractor” or “independent worker”—offering more limited protections than federal fair-labor law. But advocates eye this warily as a regulatory loophole: Rather than rewrite the law, why not force employers to comply with existing regulations that can and should be adapted to a more flexible labor force? (Some local laws have attempted to bridge the regulatory gap, such as Seattle’s new cab-industry legislation, which enables independent-contractor rideshare and taxi drivers to unionize.)
But before we get too excited or alarmed about the brave new gig economy, remember that platform-based on-demand work currently makes up just a tiny slice of the workforce. The sector is, however, expanding aggressively, and irregular gig work does represent a broader trend toward temporary, contingent and contract jobs, which has driven growth in “nonstandard” employment in recent years.
“What’s valuable about all of the hype about the on-demand workforce is that it is exposing these problems that have persisted in their economy for a long time, whether it’s at Google or at auto plants,” says NELP attorney Sara Lieberman. “Those kinds of disparities and the degradation of both wages and benefits obviously are part of a much larger trend.”
As more on-demand employers make the leap from 1099 to W-2, they may set a genuinely new standard for the “future of work.” This doesn’t require a new legal classification, a new app, or even new jargon. Just give workers what they have always wanted: a respectable living.