New Rules For A New Economy

Great piece by Anand Giridharadas in the NY Times about the need for new labor laws in regard to the new sharing/on-demand economy. In the recent lawsuit against Uber and Lyft by the people who drive for them, a jury must decide whether these workers should be classified as employees or independent contractors. Other startups like TaskRabbit and Handy are facing similar legal challenges. The problem is the existing labor classes are not appropriate for this new way of doing business. As one of the judges, quoted in the Times piece, said:

“The jury in this case will be handed a square peg and asked to choose between two round holes,” Judge Chhabria wrote.

Uber and Lyft’s square-pegged workers don’t fit into the round hole of employee because they have no real supervisors, they work irregular hours of their own choosing, and they are free to work for anyone else, too. But they also don’t fit into the hole of independent contractor, like your accountant or neighborhood plumber, because they cannot negotiate their own price, aren’t peripheral to the business (but are central to it), and are subject to extensive control and monitoring.

It’s time for a new class of labor to be developed and regulated. This is one of the first challenges policy-makers and labor departments can tackle, but it will take thought and extensive research to figure out how to handle the creation of a new class of workers. It will, however, be worth the investment as the number of these types of “jobs” continue to swell, providing much-needed primary and secondary incomes to those who pursue them.

Click the thumbnail to read the Times piece:

New York Times

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