The Peer Economy, great for inventory-less intermediaries and (sometimes) consumers, is less wonderful for workers. “Independent contractor” and “freelancer” are often just descriptives for those without security or benefits. When service is cheap and convenient, someone is likely being cheapened and inconvenienced. Since this popular new part of the economy isn’t going to be outlawed (nor should it, really), political answers are required. From John Gapper at Financial Times:

“The growth of the freelance economy brings two challenges.

First, some freelance jobs are really cheap forms of direct employment. Companies call workers ‘independent contractor’ to avoid paying employment taxes and indirect benefits while treating them as employees — they must wear uniforms, obey rules and so on. Many are low-paid workers, such as delivery drivers or warehouse stackers.

This is legally dubious, since many countries impose laws against sham self-employment. In August, the US Appeals Court ruled against FedEx for classifying delivery drivers in California as contractors when they were in effect direct employees. One judge quoted Abraham Lincoln’s quip that calling a dog’s tail a leg does not turn the animal into a five-legged dog.

Many sharing-economy companies, including Uber, classify the providers of their services as contractors and insist on them, for example, driving their own cars. Some Uber drivers in the US have mounted a legal challenge but the sharing economy is too new for the principle to have been tested.

Second, even if workers are self-employed, the company or platform that routes work and orders to them could choose to offer more than the minimum benefits. Employers traditionally provide health and pension plans, as well as training, to create a productive, reliable workforce. It is more expensive but, if it pays off in the standard of service they offer, then it will help them to beat lower-quality competitors.

If companies abdicate the role, then society needs to devise other ways to offer long-term support and security to the self-employed.”