The Gig Economy Won't Last Because It's Being Sued To Death
J Thoendell stashed this in Tech
It wasn’t until orientation that they realized they would not be employees of Handy.
But the sisters allege that other kinds of work independence were a farce. When they couldn’t finish a job in the allotted time slot, they had to call customer service if they wanted to stay longer for more pay. First-time clients could not book cleanings with them specifically, which made leveraging relationships for recommendations difficult. They say there were suggestions, which they interpreted as rules, about how to listen to music (only with headphones, with permission from the customer) and go to the bathroom (discreetly). After about two months, both of them were banned from the platform: Handy says one sister performed poorly and the other sister funneled jobs to her after she was banned. (Vilma and Greta say they had just teamed up to complete jobs, which is also against Handy's terms of service, and that's why both of them were fired.
"It is not fair, because there are laws here," says Vilma. "They are claiming to be just giving us contracts, and they’re not. They’re acting like an employer. But they’re not paying for it."
This rising legal retribution is a huge threat to the gig economy. Not being responsible for employees’ taxes and benefits allows companies like Handy to operate with 20% to 30% less in labor costs than the incumbent competition, leading to eye-popping numbers like Uber’s $40 billion valuation or Instacart’s latest $220 million round of funding. Lose this workforce structure—either by a wave of class-action lawsuits, intervention by regulators, or through the collective action of disgruntled workers—and you lose the gig economy.