[slykat]

I have to agree. I think the "independent contractor" model has massive risk to the future of the US. Some of the biggest startups (Uber, Lyft, Airbnb, Homejoy, etc.) are building huge business models built on huge workforces of "independent workforces".

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?

[arebop]

* working hours: but this time around, the market for piecework is much more competitive; just look at the lyft/uber drivers for example. * health care: realistically, health care costs for poor people are born by society in any case. The questions are about whether we should do it in a simple, centralized way (socialized medicine) or in more complex ways (employer-purchased insurance companies and laws that require hospitals to provide emergency care) * retirement: Pensions are already dead except for government workers. And it's the government that binds 401(k) plans to corporate employment; that can easily be changed. * insurance: the government already insures the population against risks such as disability and unemployment. We can do more of this or less...

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.

[anigbrowl]

Another way to think about this is to analyze the service provider's own business model. Homejoy offers itself to its clients as a 'venue' where they can find qualified cleaning professionals, so the commission they take on their brokerage of cleaning services is a combination of costs, normal profits (essentailly your opportunity cost at market rates), and economic rent (of the brand).

[icebraining]

As an European, I find it funny to see tax-payer funded healthcare depicted as a great tragedy :)

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.