How Is The On Demand Economy Evolving?

Danielle Beurteaux

News in the world of car-sharing: there are rumors that New York-based car sharing startup Juno is raising $30 million in investment money. While that number in and of itself isn’t surprising, the company’s business model is attracting attention. Juno is positioning itself as an ethical on-demand company, with one of the founders quoted as saying, “It’s time for an ethical, socially responsible ride-sharing service.” The company will offer drivers equity in the company, take a lower percentage cut than its competition, and give drivers more control over their clients.

This is another moment in the development of the on-demand economy (or “gig economy,” if you must) that points to a movement to level the playing field for workers.

Another recent funding round was achieved by Managed by Q, the office caretaking company. That outfit’s workers are W2 (i.e., employees, who, by the way, they call Operators) and it offers a stock plan.

These companies are ahead of a curve others may be forced to take. In California, new legislation was introduced last month that would let on-demand workers organize. Called the 1099 Self-Organizing Act, it would permit groups of 10 or more self-employed gig workers to band together to negotiate rates and conditions. It would, say some, create a “hybrid worker.”

The idea of a third type of worker classification that’s neither 1099 nor W2 has already been bandied about as the solution to on-demand labor problems and a positive move for on-demand workers. One recent proposal, which calls the third category “independent workers,” would allow things like collective bargaining and other benefits. But others say that a third classification isn’t needed – existing classifications would work fine for on-demand workers, but on-demand companies don’t want to follow the rules.

Meanwhile, the Federal Trade Commission has already weighed in, with the chairwoman saying that on-demand companies might be faced with regulation intended to protect consumers. (Uber is facing yet another lawsuit, this one a class-action anti-trust claim.) The Department of Labor will resuscitating the Contingent Worker Supplement in 2017 to gather info on the on-demand workforce. Both moves indicate the increasing interest at the Federal level in creating guidelines and/or laws that recognize the on-demand economy more formally.

As things stand, both on-demand companies and workers are vulnerable – although maybe neither truly realize quite how much until something happens and, like in one case, there’s an implosion and one side is left out of pocket and the other gets death threats.

Businesses are in the midst of a deep cultural shift in work organization, culture, and management mindset. Learn more about ways they are approaching the increase in automation, artificial intelligence, and connectivity in Our Digital Planet: Rise of The Digital Worker, The New Breed of Worker.

Danielle Beurteaux

About Danielle Beurteaux

Danielle Beurteaux is a New York–based writer who covers business, technology, and philanthropy. Her work has appeared in The New York Times and on Popular Mechanics, CNN, and Institutional Investor's Alpha, among other outlets.