Rise of the On-Demand Economy & Its Impact on Workers and Consumers

Posted on February 9, 2018

The on-demand economy has infiltrated our everyday lives, spanning across industries and changing the way we do nearly everything, from hailing transportation and ordering food, to in-home beauty services. The business model for these on-demand companies, like Uber and Lyft, has prompted a change in the way they “employ” and deploy their workforce. This has created a shift from trying to recategorize the W2 employee as a 1099 independent contractor.  Putting aside the legal implications for the worker herself, there are separate impacts on the consumer as well.

According to CNN, Intuit estimates on-demand employees to be about 34% of the workforce and this number is expected to rise.

Although the flexibility of creating your own schedule seems like a potential plus, workers’ lives can become unstable and their pay unpredictable under the business model of plug-and-play, i.e., plug in the worker when someone uses their phone to demand to “play.” For example, some retailers have been scrutinized for scheduling employees for on-call shifts when they fail to pay employees the required reporting time pay. With on-call scheduling, employees are often told they are not to report to work close to their shift-start time even though they have to set aside the time in advance as work hours. This creates great “disruption,” and not in a good way.

Then there is the flip-side of the “on demand” economy.  When you represent the Uber passenger in a horrific accident with major injuries, like brain damage or paralysis, your recourse becomes very complicated.  Other than the driver, who do you go after?  Uber is one of the biggest “taxi” companies in the world yet it claims it has no driver-employees and owns no cars.  This creates serious issues for the average injured consumer, adding legal costs to securing proper compensation.  Again, this type of “disruption” is not good.

If you have questions about your employment rights or your rights as a consumer, you can contact our firm at 310-474-1582​ for a free consultation.

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