A Safety Net for On-Demand Workers?

A new paper suggests how to better regulate the gig economy, but the plan may only reinforce its worst abuses.

Steven Greenhouse

For many Americans who care about how workers are treated, their biggest concern about the much-ballyhooed “on-demand” economy is the way that Uber, Lyft, and other “gig economy” companies have rushed to treat their workers as independent contractors. For employers, the advantages of this strategy are huge (as I explain in my deep dive for the Prospect about Uber’s questionable labor practices): You don’t have to follow minimum wage, overtime, or employment discrimination laws, you don’t have to make employer contributions to Social Security, Medicare, or unemployment insurance, and your workers can’t unionize.

A new paper, released on Monday, has some provocative recommendations about how to deal with this phenomenon—the nation’s oh-so-cool on-demand companies scurrying to dodge all or nearly all responsibilities and obligations to their workers. The paper posits that workers who get their work through an app or platform—like Mechanical Turk or Task Rabbit—are a new type of worker. The paper—by Alan Krueger, a Princeton economist who once headed Obama’s Council of Economic Advisers, and Seth Harris, a former deputy secretary of labor—says it’s often maddeningly difficult to determine whether Uber drivers, GrubHub deliverymen, or Task Rabbit workers are employees or independent contractors. They say that many workers fall between the two categories (a notion that some experts, like Harvard Law School’s Ben Sachs, take strong issue with), and they propose that Congress update the nation’s labor laws and create a third category of workers: independent workers.