Roy Gilbert

What California’s New Gig Work Law Gets Wrong About Gig Work

Lydia Whitmore/Getty Images Two weeks ago, California legislators passed a bill that requires Lyft, Uber, and other similar service platforms to treat the workers that provide services through them as employees rather than independent contractors. Other states are likely to follow suit. However, ruling on whether “gig” workers are employees or contractors just highlights the inadequacy of the traditional binary classification of workers in today’s economy. The truth is that they may be neither. It is important to recognize that marketplaces for products or services choose a position on a continuum defined by how much control they exert over the interactions or transactions they enable. At one end of the continuum are pure marketplaces, which exert little or no control over the terms of the transactions between independent suppliers or professionals and customers (e.g., Airbnb, Craigslist, eBay, Poshmark, TaskRabbit, Thumbtack, Turo, Upwork). At the other end of the spectrum are resellers that buy products from suppliers and resell or rent them on terms they completely control to customers (e.g., iTunes, Netflix, Wayfair, Zappos, Zipcar) and employers that hire professionals providing relevant services and almost entirely control how those services are delivered to customers (e.g., Hello Alfred, Infosys, McKinsey). Many firms have chosen to occupy intermediate positions along this continuum (e.g., Apple’s App Store, Gerson Lehrman Group, Handy, Lyft, Postmates, Uber, Wag). The notion of control over supplier-customer interactions has many dimensions: price, equipment, how the relevant product or service is presented or advertised, how the product or service is […]

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