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Portable Benefits for the On-Demand Worker

The emergence of the gig economy has opened an important debate about having portable health and other benefits for the On-Demand Worker. There has been a number of calls for a new category for those who occupy the gray area between employees and independent contractors. Freelancers often work through a middle man or a marketplace (think Upwork.com or 99Designs) or an intermediary, typically an “app,” that customers use to identify themselves as needing a service—for example, a car ride, landscaping service, etc. This enables the employer to maintain some sort of arms-length distance from the worker. (We all know this is often broken, however). How can you work for someone without them giving you some sort of direction?

It’s increasing, but today it appears that at least about 600,000 or .4% of the US Workforce work with an online intermediator. The Hamilton Project at Brookings (I once interned there while I was a student across the street at Johns Hopkin’s University’s SAIS program across the street), recently hosted a gig economy event where Brookings made a proposal for  Modernizing Labor Laws in the Online Gig Economy. The talk focused on health and other benefits, and how to ‘force these new forms of work (from Uber, etc.) into a traditional employment relationship could be an existential threat to the emergence of online-intermediated work, with adverse consequences for workers, consumers, businesses, and the economy. “One of their One of the key benefits they proposed was portable benefits, which is a fascinating idea because (Independent contractors tend to have multiple gigs at one time). Their definition:

As we are defining it, the online gig economy involves the use of an Internet-based app to match customers to workers who perform discrete personal tasks, such as driving a passenger from point A to point B, or delivering a meal to a customer’s house. Note that this definition excludes intermediaries that facilitate the sale of goods and impersonal services to customers, such as TeacherPayTeachers.com, a Web site where teachers sell lesson plans and other non-personal services to other teachers, and Etsy.com, a Web site where individuals sell handmade or vintage goods. It also excludes Airbnb, a Web site where people can rent apartments, houses, and other accommodations.

The authors of the Hamilton Report highlight that ‘because it is conceptually impossible to attribute their (workers’s) work hours to any single intermediary.” Today, these independent workers do not qualify for hours-based benefits, including overtime or minimum wage requirements. These independent contractors rarely, if ever, qualify for unemployment insurance benefits. If intermediaries could pool independent workers, however, for purposes of purchasing and providing insurance and other benefits at lower cost and higher quality without the risk that their relationship will be transformed into an employment relationship, then they might be open to pooling their resources and having portable benefits for the contingent workforce.

The Ubers of the worls could then save on the costs if they have to eventually hire these workers full-time and on legal fees (although Uber has changed their driver terms of service agreement that bars drivers from participating in class action lawsuits against the company and instead requires them to enter into arbitration in the case of disputes).

As Steve King points out in his short analysis of this proposal, this new portable benefits law probably should include gig economy workers who work in the B2B sector, or sell goods, or rent real estate, but they do. But even though they are excluded from their analysis, they would likely be included in any portable benefit laws. Portable benefits seems to be a hot topic. Next week the Aspen Institute is holding a workshop on portable benefits.

Protection of the 1099 is important. I have heard of companies (the employer and the intermediary) using algorithmic scheduling to ensure their works never go beyond 29 hours of work a week, which ensures they don’t have to pay them health benefits or provide the other goodies full-time employees receive. It’s important to figure out how to address this barrier to benefits.  Ouch! Talk about Big Data hurting the worker!

Another reason to address this is that Brad Smith, the CEO of Intuit and one of the best leaders I have ever worked for, has indicated that his company’s data data shows that 40% of their self-employed customers also have income from a W2 job. (I know several people who wear these two hats). So this problem of multiple employers with different tax and benefit regimes started way before the Ubers, Lyfts, Instacarts came on the scene.

Portable Benefits basically means a person should be able to use the same benefits when they work for different on-demand companies. The Hamilton proposal is a start – it has accelerated the discussion about a new class of employees or at least the call for examining how workers are currently classified. Their proposal really doesn’t focus on online or offline, but instead stresses that workers should be protected and receive benefits. As the chart below indicates, this will continue to become an increasingly important issue to address in our On-Demand Society.

You can read The Hamilton Report here

1099, Being Freelancer, Freelancers, News, Self-Employed

Top Freelancer Jobs in October 2015

Freelancer Jobs are being accepted more and more everyday by big organizations. According to Flexjobs.com, the top 30 companies (excluding staffing/recruiting agencies) that hired freelancers in August, September, and October 2015 are listed below.

FlexJobs Featured Employer

  1. BBC Worldwide
  2. Haynes & Company **
  3. Carolinas HealthCare System **
  4. LiveOps **
  5. Razorfish
  6. Edmentum
  7. CompuCom Systems Inc. **
  8. Creative Circle
  9. Advanced Clinical
  10. FocusKPI Inc.
  11. Judge Group
  12. Calian
  13. CyraCom
  14. VMware **
  15. Rover.com **
  16. About.com
  17. LanguageLine Solutions **
  18. CACTUS Communications **
  19. Hollister
  20. Havenly
  21. Achieve Test Prep **
  22. Houghton Mifflin Harcourt **
  23. Isobar
  24. CleverTech **
  25. Axelon Services
  26. Intel
  27. Kaplan **
  28. Overland Solutions **
  29. US-Reports **
  30. GoPro

Companies marked with ** are FlexJobs Featured Employers,

Community, Future of Work, Gadgets and Apps, Industry Research, News, The American Dream

Mobile Moms and the Sharing Economy

Recently BabyCenter.com announced it’s latest findings from its U.S. Mobile Mom 2015: The Sharing Economy report. It outlined how moms are participating in our On-Demand Society. Some facts about and results from the survey.

  • For the survey Baby Center contacted Mom’s in the top 10 U.S. DMAs – Atlanta, Boston, Chicago, Dallas-Ft.Worth, Houston, Los Angeles, New York, Philadelphia, San Francisco Bay Area, and Washington, D.C.
  • 42% of moms in those urban markets say they have tried a “sharing economy” or concierge-type app in at least one of these categories: beauty on-demand, clothing rental, grocery delivery, home cleaning, household chores, private car/taxi, vacation/temporary home rental, and valet/parking assistance.
  • San Francisco, where many early adopters of new technologies live,  claims the most moms on the “on-demand” bandwagon, with 56% saying they have tried one. Outside of those major markets, the percentage of moms who have used one of these apps drops to just 21%.
  • The study also shows that moms’ lack of familiarity with these services is a critical stumbling block in greater penetration across the board.
  • When talking to mothers about household chore services like TaskRabbit and Airtasker, nearly 2 out of 5 in each of the top 10 DMAs said they were not acquainted with these types of “sharing economy” apps.
  • Three out of 5 moms who live outside those urban centers said the same. However, when asked, moms showed strong interest in using a household chore service app – 60-70% in top markets and 57% outside – pointing to a disconnect and missed opportunity between a target audience and utilities they want and need.
  • There are two categories of “sharing economy” apps that are the exception to the rule, with a larger number of moms being familiar or actively using private car/taxi apps, such as Uber and Lyft, and vacation/temporary home rental services, like Airbnb and HomeAway.
  • Private car/taxi mobile services were far and away the most familiar to moms, with those in San Francisco, New York City, and Chicago being most likely to have used those services or be considering giving them a try. Still, numbers take a tumble when talking to moms who live outside of the top urban areas.

 

 

Finding Jobs, Industry Research, News

On Demand Industry News: Week of 9/21

Growth of on demand economy is transforming work and workplaces

Workplace Insight (press release) (registration) (blog)

The Intuit report links its findings to the growth of the sharing or on demandeconomy. It claims that around a fifth of UK employees generate up to …

Report calls for protecting rights of ‘on-demand‘ workers

Staffing Industry Analysts

NELP’s report argued many workers in the on-demand, or gig, economy as employees and not independent contractors as claimed by the firms.

On-Demand Workspace Startup Breather Wants to be Like Starbucks, Not Airbnb

Curbed National

While Breather and other sharing economy real estate startups frequently get compared to Airbnb, the comparison Smith aims for is Starbucks, which …
MSNBC Why it’s time for Uber to unionize

The on-demand economy is here – and workers’ rights are under attack. Just last week, a federal judge certified a worker class action against Uber, …

Freelancers, News, Politics, Services

On-demand economy changing competition environment

The on-demand or peer-to-peer economy is shifting consumption patterns, creating new “jobs” and innovative business models, the World Economic Forum has said in a press release. The impact on industries, workers and consumers is huge in this new reality, according to panellists in a session at the Annual Meeting of the New Champions 2015 in Dalian, China.This relatively new sector of the economy is burgeoning, launched from online platforms and engaging millions of consumers worldwide. Arun Sundararajan, Professor and Rosen Faculty Fellow, New York University, USA, calls this shift the “sharing economy” or the evolution to a capitalism that is fundamentally crowd-based. “We are transitioning from getting the goods and services we want from a company to getting them from peer-to-peer platforms,” he said. “This is culminating in a new model for organizing economic activity.” In this new world, work no longer involves “jobs”. According to Sundararajan, people are assembling gigs and tasks.

Stephane Kasriel, CEO, Upwork, USA, started his online marketplace for freelance work 10 years ago. In the past three years, the company has taken off and offers100,000 new jobs in 75 categories; 30,000 freelancers sign up each week. “Young millennials do not want 9-to-5, they like to control their own destiny,” he said. “We offer liquidity in a fast-moving job market.” According to Kasriel, the on-demand economy will lead to “profound changes in society.”

This rapidly evolving business model is also changing the nature of competition. “The value chain doesn’t need to be pure competition. A lot of value can be created by taking the best of two worlds and creating something better out of it,” he said.

The on-demand economy enables agile businesses to build bridges. According to Nathan Blecharczyk, Co-Founder and Chief Technology Officer, Airbnb, USA, a Co-Chair of the Annual Meeting of the New Champions 2015, “Companies can partner with industry, broader society, cities and communities. This will create a more inclusive economy.” Businesses such as Airbnb and other online platforms act as a powerful economic enabler. “All of our businesses give people an option to have a supplemental income,” Blecharczyk told participants. “There are not enough jobs in the world. Our services add incremental value.”

Didi Mobility, a major player in the car-hailing industry, transports 10 million consumers every day. Using Didi’s apps, people can hail taxis, call on private cars and pooling services, and determine the schedule of public buses. Cheng Wei, Founder, Chairman of the Board and Chief Executive Officer, Didi Mobility, China, a Co-Chair of the Annual Meeting of the New Champions 2015, said that this consumer-to-consumer service faces fierce competition but, in the on-demand economy, “scale is the key” and a unified platform offers users convenience.

Panellists agreed that the on-demand economy is raising trust in society – an important spin-off in the wake of the financial crisis, which lowered confidence in the private sector and private institutions. (SH)