There's no minimum wage or other worker protections if you sign contracts for services.
The social contract is never signed, & it's getting abandoned more & more.
If a new technology is involved, the latter is more likely. Technology can reduce transaction costs and replace firms with markets made up of smaller firms.
A really interesting and accessible (but usually misinterpreted via soundbite) famous work in economics is ' The Nature of the Firm' by Ronald Coase. I think this is the best framework for understanding the key dynamic here. Whether employees or independent "contractors" make economic sense is most influenced by transaction costs.
For example if the cost of hiring, negotiating and communicating with a graphic designer every time was low enough, there would be no reason for a company to hire a graphic designer. But realistically if you add up all the things an in house designer does (including making the decisions about what needs to be done) in a month and try to get those done by freelancers, I would estimate the cost at 3-4X higher. As things stand now, I think that a company contracting over 10-20 hrs per week of design work is probably better off with a full time employee. The main reason is transaction costs.
Technology can cause big changes in transaction costs. What was previously done by companies can be done by markets.
A lot of times you can get things done with a freelancer for cheaper. The cost comes A) when you want to change things and have to start over, potentially with someone who has never worked on your project before and B) you don't have someone thinking about your project design/code/product full time, so you are unable to push improvements or respond to issues continuously.
To grow past a certain point, you need someone who has a financial incentive to put your project at the front of their mind - something employment is great at.
For the Uber v. employee model - employees would give Uber better control over supply, independent contractors get more control over when they can work (hence the number of people I know who drive Uber/Lyft/Sidecar a few weekends a month just to pay their SF parking costs).
I really do suggest you look at Coase' paper. To me, its a great example of what economics can do. It's very accessible. The logic goes:
We know competitive markets are better than centralized ones at a national level. So, why are individual firms so large, centralized and horizontal? Wouldn't Microsoft or Walmart benefit from being many small independent units freely transacting with each other? Why do we even have firms? Why don't individuals just sell their service to each other?
The answer is usually "economies of scale" which is a semi-tautological answer. Why does "scale" need to be achieved by a a firm. A market can have scale too. Horizontal scale (eg a company with its own IT department) actually prevents the usual examples of economies of scale from occurring.
The paper argues (in my opinion very convincingly) that "transaction costs" are the main reason that firms exist. Transaction costs are responsible for horizontal companies. The enormous level of inefficiency caused by the centralization of firms (think East vs West Germany) needs to be offset by even more enormous transaction coss.
One difference that happens when you internalize this point is that you can imagine a lot of slack existing ins systems like this. Hours worked is one example (but not the only one). It's possible that the deliver guy will earn more in fewer hours, Uber will earn more than the parcel deliver companies and parcel delivery will become cheaper and better all drawing from this pool of wasted potential. It's a very big pool.
For Uber to be worth its high hype & valuation, it's going to essentially expand these types non-employee situations. That's why I'm "mixed" feeling about this, as I like great UX, smooth marketplaces, & know many people who want part-time work, not full time.
But, I also know many folks who had "decent jobs" (nothing special, but they can raise a family) driving UPS trucks or other things like that.
Really, it should basically be the choice between being a freelancer or an employee, and the choice between hiring an engineer/designer or just one off freelancers.
A "real" contractor negotiates rates regularly and with different pricing models, takes work from multiple contractors, pay for their own tools etc. In some cases you genuinely have a "firm" with one client but that's rare.
The question is are these uber contractors contractors in this sense? I think they are.
The consensus on social norms is not a consensus if it's enforced by some group on another - that's just bullying, not agreement. If our ideas of how society should function differ, we can either reach some compromise to mutual satisfaction (==consensus) or start fighting and guy with 51% of power will win. But that wouldn't be a "contract", "consensus" or "morality" in it. It'll be just an outcome of a brutal conflict.
Here, I'm applying that there is social give & take & expectations/norms throughout our society. Yes, any social norm/contract/expectation is, by definition, constraining/conservative & thus counter to any progress/disruption.
These are not absolutes, as any difficult moral argument is usually balancing competing, legitimate concerns.
We do have an American social "contract" that is eroding: Things like "If you're born poor, and good in school, study hard, work hard your whole life, stay clean, then you have a great chance of getting out of poverty".
An truly Uber-like equivalent for parcels might be problematic. Imagine a couple of company shills, posing as a putative messengers, near your competitors’ headquarters.
Keep on challenging the old taxi industries around the world.