Supporting workers in the gig economy

If there’s one thing I’ve learned throughout my years as a human, it’s that life is hard and people need help in order to make things work.

That help can come in many forms: family, friends, co-workers, teachers, unions, healthcare providers, agents, assistants, coaches, therapists, strangers on the internet, you name it.  Point is, we all need it, and good help can be hard to find (assuming we get over the first hump and even start to look).

I’ve been spending a lot of time recently looking at this problem in a particular use case: the rise of the independent worker.

As I mentioned in a post last year, I’ve been interviewed a lot about the emergence of the “sharing” or “on-demand” economy (Fastco, Wired, NY Times, PBS Newshour) and the question always comes up is: “aren’t all of these new independent workers missing out on the stability provided by full-time employment?”  Albert describes this as the unbundling of the job — splitting apart the support systems that had traditionally been associated with full-time work (salary, benefits, community, training, etc) and leaving workers to fend for themselves.

In the past few months, this issue has come to even more of a head, with the Lyft/Uber class action suits seeking W2 status for on-demand drivers, the California Labor Commission decision that (in a single case) an Uber driver could be considered a W2 employee and not an independent contractor, and moves by other on-demand platforms move some or all workers from a 1099 model to a W2 model, as Shyp and Instacart recently did.

A year ago, when I started speaking to reporters about this, my consistent answer was that we hope to see a new layer of networked services emerge that will fill the gaps left by the unbundling of the job, that start to solve workers’ issues in creative new ways.

And conversely, what I hope we don’t see is a knee-jerk attempt to shoehorn today’s independent, networked workers into the old paradigm of full-time single employer work, throwing the baby out with the bathwater.

Sherpashare recently did a study of on-demand drivers, asking them what they like and don’t like about this new model of work.  Not surprisingly, they love the flexibility and freedom that comes with (semi) independent, networked working lifestyle.  But they also want more control over their work, chafing at the level of control that many of the services-oriented (vs. marketplace-oriented) platforms exert.  That makes sense to me.   There’s also an obvious need to basic support tools and services (for example around finance and insurance/benefits).

Now, a year later, many these kinds of services have indeed begun to emerge.  Over the past several months, I’ve spoken to many entrepreneurs approaching this problem, from a bunch of different directions.  Here is my latest snapshot of how that market looks today:

Screen Shot 2015-07-28 at 11.42.08 AM (2)

Nearly all of these are brand new. Many of them are pre launch, and many of those are just at the idea phase.  And, as you’d expect, they are all tackling different facets of the problem.

Here’s a quick review of the categories I’ve been tracking:

Job Discovery: gotta find work, and there are an increasing number of competing options out there. Matching those opportunities to workers will be important.  (see: Dispatcher, Opus for Work, BlueCrew)

Education & Training: along with the unbundling of the job comes, to some extent, the unbundling of education & job training.  The need here spans both sector-specific training and more general education like financial management. (see: Peers, KungFu)

Community: as workers become more independent, we will need new ways to form various forms of community support, from commiserating, to peer-learning, to organizing. (see: Coworker, Domino, Sherpashare)

Equipment: gotta have the tools and the space to do the job. (see: CoPass, Breather, ReCharge, IdleCars, Breeze)

Admin: keeping track of your finances, expenses and taxes as an independent worker totally sucks.  April 15th is doomsday.  There are a bunch of tools providing helpful services here.  (see Zen99, Benny, Hurdlr, And Co)

Banking: money is at the center of everything, and independent workers have unique financial needs, in particular related to lumpy cash flow, saving for taxes, and overdraft & lending.  (see: Even)

Benefits & Insurance: clearly a huge issue, relating to everything from healthcare, to disability, to liability, to operating insurance. Traditional insurance plans aren’t built for this economy, and insurance will be a huge part of continuing to build trust, safety and security in this sector.  (see: Stride Health, Freelancers Union)

Identity & Reputation: perhaps the biggest opportunity, in my view. As independent workers work across platforms and services, reputation is their currency.  Platforms are built on trust, and workers need to be able to port that trust from one context to another.  Unclear how we will get to a world where workers control their identity and reputation data — could be indirectly, through banking, insurance, or job discovery.  (see:, Karma, Traity, Checkr)

This is surely incomplete, and many of the examples span categories, but it’s a start.

The happy confluence

There will undoubtedly be many tensions as this market develops, particular around the sharing and control of data (for example, worker-facing APIs and the right to be represented by a bot).  There is, however, a nice potential synergy between the needs of work platforms and worker support platforms.  In order for work platforms to maintain the arms-length relationship with worker/partner/contractors required for proper 1099 status, they will necessarily need to relinquish some amount of control, which could really open up the market here.  We will see.

Finally: if you are working on this, I want to know you!

45 comments on “Supporting workers in the gig economy”

Related: Jaron Lanier makes a case for why having multiple sources of income is a good thing in “Who Owns the Future.”

Just this: I’m happy that you seem to be using “on-demand economy” as the primary term. I feel that “sharing economy” is a borderline deceptive construction for many of the current companies flying under that flag, so any help getting “on-demand economy” set as the default is appreciated. :)

I have been using “on-demand” for awhile (see my comments about Homejoy) and it just gets to the heart of the matter. There is a category that I would call “sharing”, but that does not describe any of the major services as mentioned by Nick.

Very interesting article, and it’s telling that this “economy” eludes easy naming. I’ve worked for years as a freelancer, and all of these titles are dissatisfying in one way or another. “Sharing economy” is deceptive for most companies. “Gig economy” speaks more to odd-job services like TaskRabbit than for companies that enable full careers, such as Uber–but even then, I feel that the major companies there have a vested interest in treating the work like “gigs”: that way they can stick with less fuss to 1099 classification and, more importantly, reap their substantial fees on each transaction (because they have a greater claim to the value of the opportunity of work consists of a series of gigs rather than a career that a professional develops individually, with personal referrals etc.). “Peers as a Service” is definitely the nicest sounding to me, but it also glosses over class relationships, putting too friendly a face on what’s often a luxury service.

A decade ago Brad wrote a blog post that I think about a bunch even today, basically saying that reputation is not portable across web services:

Meaning, if you’re a good user of craigslist (you wipe your feet on the doormat because entering someone’s house to use their couch) it does not imply you’re a good user of AirBnB (you don’t clean the bathroom in your apartment between hosting guests).

Interesting to see Karma taking the opposite stance. The reputation portability informed our thinking about RapLeaf, which was a similar approach a decade earlier. Would love to see it play out different this time around.

Thanks andrew. That’s great context.

One idea is that there’s a lot more competition (in terms of platforms) within a given skillset. i.e., my uber driver rating is portable to Lyft, Sidecar, Postmates, etc. It’s really very much the same.

None of those are necessarily portable to my reputation as a babysitter, but it’s very portable within each vertical / skillset

And there may be other kinds of more generic trust that are portable, as more and more platforms develop more and more fine-grained dimensions of trust (for example: nick is generally “on time” — that’s something that could conceivably port across skills/functions/verticals)

What a great wrap up of all the tools available for the new 1099’ers.

How do these services intend to distribute their product? My own anecdotal evidence shows that most new 1099’ers aren’t going to do this for the long term…so are they truly concerned about managing benefits, taxes etc?

The one who are doing it for the long term, don’t really need the help

I am the co-founder of a start-up called that connects cat-loving sitters with cat owners in their local area. Sitters are not employed by us and charges individually. Would that be a sharing or on demand economy? How would you distinguish in general?

The sharing economy concept was developed for the purposes of sharing the stuff we own. Airbnb would be an example of that, though it also falls under the on-demand economy. The on-demand economy is about providing services to people when they want them. Catinaflat is on-demand. That said, the on demand economy is broken into two forms: marketplaces and services. If you let cat owners set their own prices, you’re a marketplace. If you charge set rates, you’re a service, and may run into trouble over labor laws, licensing etc. There are big marketing advantages for services, which is why so many companies (like Uber) choose the service model. You won’t have billions of investor dollars to spend on corrupting government officials, so the marketplace model is the better option for you.

Great landscape laydown.
1/ why do you think the identity part is the biggest opportunity? “Biggest” in size or difficulty?
2/ have you talked to actual users that fit this profile, and that are they using these services already? (Curious as to the extent of adoption & how these services are actually solving their problems)

2) great question. I’ve talked to a lot of these entrepreneurs, who are busy talking to a lot of these people. my own direct research is more limited.

1) Big in that data is at the center of control and competition. basically the same argument that all the blockchain companies are making, that platforms shouldn’t have a monopoly on data. In this market, that’s a big issue and the extent to which data moves into the hands of workers (or their agents), they gain a lot of flexibility/independence/leverage

This is not a problem for startups to solve. Let me be very clear, the freelance economy is a generational shift and we are simply as a country not there yet. While millennials are moving towards 1099 work, they really just want the security of the W2. That is more the fault of employers bundling more services together for the employee and the government encouraging such actions. It is just way easier being employed under a W2.

But even if you took all those inconveniences and provided super easy ways of handling them, people themselves are just not ready for this massive cultural shift and the uncertainty that comes with it. Why? Because the freelance world is currently perceived as one without a safety net. That burden then falls squarely on the shoulders of the federal and state governments which does not understand this economic shift nor fully appreciates that it is going to happen anyway.

I think it is great that startups are trying to build a safety net of on demand services. Culturally however, they may be jumping into a market that simply is not there yet. That 34% number that Mary Meeker mentioned and Fred blogged about is true, but if you asked the 34% whether they would prefer W2 or 1099, you would get a better sense of where we really are as a country of our view of freelancing.

it’s a great question.

there is no question that W2 work is much more secure and comforting (speaking from lots of experience on both sides here)

but I think it’s also possible, and likely, that the supporting services will get better and better, providing more and more coverage over time. And that we may ultimately reach the balance you’re talking about. Everything the internet has done has caused cultural shifts!

But to your point, BlueCrew is the one most aligned with that way of thinking — creating a W2-supported labor layer that can plug into the various on-demand platforms. Will be interesting to see how that evolves.

I love to see this re-balancing in action. Soon enough all these services is merge or be acquired and some super corporate union will be formed. A few years later, we will dig up some CEO buried in the old Candlestick Park.

Great post, Nick. I notice a distinct lack of startups going after “group negotiation”, which is the fundamental strategic strength of unions in the industrial age. Unions centralized worker power to balance the centralized management power of the corporation.

Ideally we won’t see a monolithic, industrial-era solution, but I suspect society’s better if the labor force has help with the concentrated benefits (the corp) vs diffuse costs (labor) problem that is business/employee negotiations.

I also don’t know of any. BlueCrew perhaps could do this implicitly. is the only one going after that directly (that I know of)

But you could imagine that as a piggy-back / later phase aspect of many of these.

It’s all very sensitive because many of these services are working with both the worker and the platform, so don’t want to piss off the platforms too much (at least not initially).

I could have called “organizing” out more explicitly, and maybe should do that. Currently it’s lumped in with “community”

also, a big part of “group negotiation” is bound up in the ability of workers to freely/easily move between platforms, which is why access to historical work/reputation data becomes a central issue here

Great landscape Nick – have you noticed anything about how the services are thinking across borders? Having run virtual teams for years – within jurisdiction is one thing, but things can quickly get more complicated across borders. I’m really curious how the founders behind these service are thinking about it.

that’s a good question and not one that I’ve really focused on so far

I’ve been trying to look at things from the workers’ perspective so far (rather than from the employer / platform providers’), where multi-juristictional stuff if somewhat less of an issue

but i will flag that; thanks

Fuck the on-demand economy companies that play fast and loose with 1099 status with a bunch of bullshit propaganda about ‘independence’. If you don’t set prices as a 1099, you’re probably being exploited, and if you have no say at all while your company cuts prices in half, you are definitely being exploited. If you make less than $15/hr after expenses and the billionaire CEO of your company calls you a ‘small businessman’, you are definitely being exploited. If you can’t bring your customers with you when you change platforms, yet you’re labeled and taxed as an ‘independent contractor’, you are being exploited. In all of these cases, you are not even a little bit independent, you are the victim of illegal, robber baron-style libertarian bullshit. There’s really no room for any other interpretation of these questions that isn’t a naked attempt to destroy worker’s rights. Either your company is a pure platform, or you should be hiring employees. If not, I’ll gladly enjoy protesting your company and shout with glee when you are sued into compliance. And so will basically every Democrat in the country, whether we support Hillary Clinton or Bernie Sanders. You’re gonna need a LOT better argument than ‘we can build for-profit services to provide stability’ when the actual problem is that the vast majority of on-demand workers aren’t making a livable income once expenses are properly factored in, and have no input on pay or policy.

Here’s an idea: just hire employees. You can control how they do their jobs, you can offer a more consistent customer experience, you can lower employee churn by a huge amount, and you can rest easy knowing that you’re not risking your entire company just to cut corners at the expense of your workers. Oh, but the flexibility! There is nothing stopping you from giving employees flexibility. Nothing at all. If your business model depends on exploiting independent contractors, your business model sucks and your company should lose, whether by market action or government fiat, and screw any investor greedy enough to invest in it.

I like how everyone’s just skipping over your post, like you hadn’t said a thing. ;) Everyone’s oh-so-eager to pronounce that the Emperor’s fully clothed. I for one agree with you: the way things are going, the Valley “disrupts” one thing and thing only, people’s lives and livelihoods. As you eloquently put it: fuck this robber baron-style libertarian bullshit!

I don’t want this to come off as combative to yours and @UriahZ’s point…but I know for a fact that most 1099’ers would not do these jobs as an employees. They wouldn’t make enough money to justify the job.

Assuming the 1099’s generates $20/hr, as technically a small business (most uber drivers are way less) our tax code is set up for the 1099’er to write off more expenses than revenue, which reduces their personal tax footprint to virtually $0. This essentially makes their take home $20 per hour.

As an employee, their actual take home would be closer to $16 (much less for Uber drivers) per hour as their take home amount, after you factor in he Medicare and Federal Tax withholding.

From my experience, the job is viable as a small business/Freelancer/IC but wouldn’t be as a traditional employer/employee relationship.

You’re right. This is propaganda. I’m seeing too many articles stating that contingent workers are happy about their newfound flexibility and freedoms and blah, blah, blah.

Which is funny because every single contract/1099/contingent/temp worker I know absolutely HATES the uncertain financial situation they’ve been thrown into. That includes myself. The contingent worker cycle is a Hell you do not want to experience. No stability, no benefits. You can’t buy a home, you can’t buy a car if you don’t know if you’re gonna be employed in the next 60 days. Can’t pay the rent, either. Here in California, your landlord can begin the process of eviction if you’re only one week late on the rent. I have a friend who’s a contract worker. Almost every time one of her assignments ends (usually early) she has to get up and move if she can’t get another assignment in time to pay her rent.

So if our government allows corporations to continue with this contract worker crap, you’re gonna see a whole generation of people living with their parents and unable to participate in our economy. But then the media will just call them lazy Millinials….

I totally get these issues and was myself a contract worker for many years So there are really two questions: what can and should the government do And, what can and should the private sector do – not contract employers but rather other enterprises who can support workers in new ways What I’ve found interesting about this exploration is that there are many private sector actors looking to help workers regain stability etc through new products and services — like new ways of packaging benefits, new ways to manage finances, new ways to amass worker power, etc on the fly

Great post – seen from a European perspective this is even a bigger thing, even if less “mainstream” today. For a continent that was built up on the stable job promise this change is huge and the segment completely underserved. We are working on this – where to contact ?

It’s a good point that the things people need to have a comfortable life can be built and do emerge when there is demand, so new systems can happen. Currently when we hire people, they often choose to be a full-time employee rather than an independent contractor because they want some security —if they get sick they can take a day off and still get paid, etc., different things that are a part of well-being. But, of course if we saw that a level playing field actually means each person can engage fully because they have a support system to operate in, then the difference between employee and independent start to go away. You can have freedom and security.

Thanks for the mention Nick. We also prefer the term gig-economy at Hurdlr. In my mind, the sharing economy doesn’t involve an exchange of money. A good example of a company that would fall under this category is CouchSurfing.

Yes you absolutely nailed it in that piece. Thanks for sharing that.

So… The question is how do we get there. My hunch is that it will need to be a combination of incentives and adjacent uses. And that perhaps one day in the future there could be legislation mandating such access

Hi Nick, great article! The snapshot is very interesting but not 100% accurate as lines tend to blur a bit. For instance, Peers is proposing 2 insurance products:
1. Peers Homesharing liability insurance ($1M homesharing liability insurance).

2. Peers Keep Driving (replacement car program for rideshare).

Great write up Nick! Just read your booklet w/ Elizabeth Woyke at O’Reilly and then found this article 8-) for me its the first good extrapolation of the gig economy. Coming close to Tim’s web 2.0 slide way back. A question: In what category would you fit CLOCK? It’s like car navigation but then for projects: Project navigation. CLOCK directs people to succes, it matches people to the right phase of a project and helps to focus on the task at hand. Kind of like what Google Now does. Our next version in December will be more of a conversational interface. Key target group are the independent contractors. Those with many skills and intention but no organization. CLOCK gives them the adhoc structure they need. (i am one of the founders btw)

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