Rideshare Apps and the On-demand Labor Market

Ridesharing company, Uber, was recently in the news because a California court ruled that one of its drivers was an employee, not an independent contractor. The app-driven startup is appealing the decision because it could have costly implications. While the company is valued at an enormous $50 Billion, if their labor on-demand business model is changed to a more traditional permanent employee business model, the company will have to pay a lot more taxes plus expenses like gas and benefits to its employees. Connecting passengers with drivers by use of smartphones is just one example of how mobile technology is changing how we work, and stirring up controversy along the way.

Allowing us to become much more efficient, technology has given rise to a new on-demand labor market. In fact, the number of independent contractors is expected to reach 40% of the workforce by 2012, according to digital magazine Quartz. While being employed when a company needs you is better than losing your job entirely because your tasks were replaced by software automation, there are serious downsides to this form of employment. Besides lack of healthcare and other employee benefits, some of the major problems with on-demand labor are: instability, income unpredictability, lack of structure/no set hours, and difficulty planning for a long-term career. In this New York Times article where Robert B. Reich, an economist at the University of California was interviewed, he said, “This on-demand economy means a work life that is unpredictable, doesn’t pay very well and is terribly insecure…most would much rather have good, well-paying, regular jobs.” The best defense of using an on-demand labor business model can best be summarized in a recent quote released by Uber in response to the recent California court ruling against them. As reported by engadget, “It's important to remember that the number one reason drivers choose to use Uber is because they have complete flexibility and control. The majority of them can and do choose to earn their living from multiple sources, including other ride sharing companies.”

No matter which side you are on, the sharing economy seems to be here to stay and the fast rise and growth of on-demand ridesharing companies like Uber, Lyft and Via are the proof. If you are as interested in these types of companies as we are, check out this article published by techrepublic.comthat lists and provides information on ten rideshare apps.

Tell us what you think about the on-demand labor market and how mobile technology is changing how we work.