I find this a step backwards; but it remains to be seen if this is just a harbinger of change or just a passing fad.
If the trend continues, this could mean a massive shift in the US's labor force from salaried jobs to independent contractors. A lot of folks in the Valley view this as a positive innovation, but I think this is a clear case where the free market is not going to work out what's best for our society.
Imagine a future world where companies like Uber are the norm. A majority of the workforce will face issues like: * No regulation on working hours (i.e. the industrial revolution v2) * Massive healthcare costs born on the taxpayer due to lack of employer provided healthcare (i.e. going past what we already see with corporations like Walmart) * Lack of retirement benefits for the workforce as they age (401k, pension, social security). People may argue that the government shouldn't force people to save, but what is likely to happen is that the taxpayer will bear the burden of supporting a lot of this population. * Lack of unemployment insurance which means that our labor force will largely be unprepared for the normal boom & bust cycle of our economy * Lack of worker's comp which means that employee's won't be shield from low probability high risk events
The scenario feels like a deja vu; during the Industrial revolution, we hit a point where technology progress was leading to inhumane working conditions for manufacturing workers. Eventually regulation caught up, but this was definitely not something that the free market sorted out on its own.
Are we really prepared to live in a society where independent contractors are the majority of our workforce and lack basic labor protections?
No, our society is not prepared to handle this new way of coordinating labor. I'm sure the political process of agreeing about how to change will be pretty rocky. But the industrial revolution didn't wait for societies to prepare, and I don't see any fundamental reason to think we can't handle this.
In any case, I'm sure health insurance companies are pretty happy to know they have people volunteering to play the role in this reenactment of Baptists and Bootleggers.
But the changes are happening around us, and I think this "independent contractor" model will be a big force during this new "industrial revolution." Companies, empowered by technology, are trying to become more cost efficient, and in a short-sighted way, the single largest cost sheet for any company are its employees.
Personally, I think Capitalism as we know it will reach its limits once technology reaches a certain threshold of efficiency; we just don't need as many people working the same amount of hours anymore.[1] (isn't that the very definition of efficiency?) Then we as a society will need to figure out another way to live (new-style of feudalism? welfare state?). But until that new model comes in to play, and we're in the middle of this new "industrial revolution", the contractor model will be set to dominate.
[1] http://www.technologyreview.com/featuredstory/515926/how-tec...
The only way this is a passing fad is if customer or employee risk aversion suddenly drastically increases. I don't see any compelling reason why it would.
“THE COMPANY DOES NOT PROVIDE CLEANING SERVICES, AND THE COMPANY IS NOT A CLEANING SERVICE PROVIDER. . . . THE COMPANY OFFERS INFORMATION AND A METHOD TO OBTAIN SUCH THIRD PARTY CLEANING SERVICES, BUT DOES NOT AND DOES NOT INTEND TO PROVIDE CLEANING SERVICES OR ACT IN ANY WAY AS A CLEANING SERVICE PROVIDER, AND HAS NO RESPONSIBILITY OR LIABILITY FOR ANY CLEANING SERVICES PROVIDED TO YOU BY SUCH THIRD PARTIES.”
This is the kind of things that eventually lead to class action suits, but settling this via the courts takes years.
Workers are only willing to do this because, as you read in the article, the only other choice is to be unemployed. They are not choosing this voluntarily.
In so many ways, we are all subsidizing these companies.
"“They may be able to paint someone’s shed this week,” says Dr. Standing, a professor of developmental studies at the University of London. “But they don’t know what will happen next week.”
He views peer marketplaces as part of a larger global phenomenon, in which labor brokers encourage people to work on contingency without basic employment benefits or protections. The companies essentially channel one-off tasks to the fastest taker or lowest bidder, he says, pitting workers against one another in a kind of labor elimination match.
The flexible timetables of project work are a trade-off for regular employment income and benefits. Retailers, restaurant chains and other employers may require more rigid work schedules than piecemeal gigs, or, worse, keep their workers guessing from week to week about which hours they will work. But many of those employers also offer workers benefits like disability pay or commuter discounts.
Uber, Lyft and TaskRabbit, for instance, do not regard the workers who provide services to their users as employees. The companies say they are simply arenas, like eBays for gigs. They require their service providers to work as independent contractors and, as such, the workers don’t qualify for employee benefits like health insurance, payroll deductions for Social Security or unemployment benefits."
http://www.nytimes.com/2014/08/17/technology/in-the-sharing-...
Or perhaps that if the government services you describe (e.g., free money if you don't work) did not exist, workers would have a stronger bargaining position to request higher rates from homejoy?
Could you clarify your counterfactual?
As noted in the article I link and quote further down the thread, these companies utilize an often-desperate workforce that will take whatever they can get to work. These companies keep their workers as independent contractors without any benefits. Sometimes that is fine, especially if someone is working as a Taskrabbit during his/her weekend to make some extra money. But the reality is that many of these people are relying on these services for nearly all their income and then leaning heavily on government support to make up the difference (i.e. what keeps a roof over their head or food in their stomach).
I am not making a case for any wholesale policy change on the part of these new services. I am just stating that there is baggage here and that maybe it would be better if benefits were offered through these jobs to their workers/contractors so that the customer pays for the complete cost of the service and that business model, instead of taxpayers.
And I am no economist or expert in the matter ––– all I know is either from news articles or anecdotes. Maybe I'm wrong.
If the price of a persons labour is insufficient for their living needs the only option is to draw it from society (welfare/charity) or have them suffer. Trying to pass that on to the customers or the employers of labour directly will result in unemployment.
We have some major structural employment issues going on.
Homejoy is resolving those structural issues by making it easier for buyers and sellers to find each other.
That's a structural issue: just as aging pulls people out of the labor pool, the increased substitutability of capital for labor is pulling out working-age adults from the pool of workers who are realistically able to work. Homejoy etc. does help the people at the margins of this pool who wouldn't otherwise be affordable to employ (e.g. due to overhead costs), but it doesn't obviate the basic structural trends happening.
When I gave a rating of literally "Meh. 5/10" for a decent but not impressive cleaning job, they went nuts--found me a new cleaner, offered discounts, said they would work with the cleaner to make sure she learned lessons, etc. way more than i would have done if i were hiring her directly.
On the other side, if a cleaner thought my house was disgusting or hated my cats or something, I presume it would be easier for him to decline the job than if he were an employee of a service with contracts and reputations.
Of course there are no guarantees about how they will dish out that $7M insurance fund but based on my experience with them, I have a feeling HJ would err on the side of paying more and maintaining their reputation.
Do you have any reason to believe that outside of a need to avoid cognitive dissonance? I ask because it is well-known that for some services (e.g. Uber) refusing open contracts will result in penalties or termination of the agreement with the service.
When most people give "5/10" they mean "terrible, but did not shit of the coffee table".
Did they check with you what you meant by 5/10?
Fast food is too expensive for this person. That doesn't strike me as an awesome situation.