Raise your hand if you took a ride with Uber or Lyft this week. Now ask someone who is not able to drive a car how much they rely on these services. Americans love the convenience which app-based workers provide; we also love the prices, which seem very reasonable.
Now raise your hand if you drive for one of the Transportation Network Companies or Delivery Network Companies. The workers who perform these “gigs” also report a high degree of satisfaction with their work – “I’m my own boss!” “I work when I want, and don’t work when I don’t want.”
Finally, raise your hand if you are a small business owner who doesn’t have the resources to maintain a throng of W-2 employees, but needs a much more nimble, flexible and “on demand” workforce. Business owners have come to rely on independent contractors to fill in the gaps when customer demand is high.
So, workers, consumers and businesses love the gig economy. Sadly, just because an idea is good, does not mean that it will be embraced by policy makers in our federal, state and local governments. Much criticism has been leveled at this business model, primarily focusing on the alleged exploitation of workers and adverse impact on tax revenue.
The U.S. Chamber of Commerce recently published a comprehensive report on the gig economy, authored by my Partner, Tammy McCutcheon, and a superstar Associate Attorney with our firm, Alex MacDonald. The report explores the depths of the gig economy, including a romp through the history of contractor law, a detailed definition of exactly what the gig economy entails, and an analysis of criticisms of the gig economy. The report also delves into current government regulation of this sector of our economy, and the threats those regulations pose to the entire gig model. Finally, the report evaluates various options for a more balanced and realistic approach to addressing the potential challenges presented by this new business model.
Two things are certain – the gig economy is here to stay, and government efforts to regulate this growing sector of our society, our workplaces, and our daily lives will continue to expand. The Chamber’s Report provides a roadmap for addressing the important issues which are presented by the gig economy.
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Bruce Sarchet is a shareholder with Littler, a member of the firm’s Workplace Policy Institute, and a resource on California’s new independent contractor law, AB 5.