Real Solutions For On-Demand Worker Classification


Image Credits: Huza (opens in a new window) / Shutterstock (opens in a new window)

Alex Chriss


Alex Chriss is vice president and general manager of self employed solutions at Intuit.

This past year will be remembered as the year of the on-demand economy. For many people, especially those outside of Silicon Valley, it seemed to come out of nowhere. On the consumer side, this was almost universally a welcome surprise. The impact on workers was, of course, much more hotly debated.

Headline-grabbing events, such as the class-action lawsuit over Uber’s supposed “worker misclassification,” were portrayed as nothing less than the on-demand economy on trial. Decisions by other companies to reclassify their independent contractors as employees were interpreted as an attempt to pre-empt an inevitable crack-down from regulators.

There was drama at the local level, with Florida declaring that an Uber driver was — and then wasn’t — an employee, and Seattle passing legislation that effectively paves the way for ride-sharing drivers to unionize.

I believe that in 2016 we’ll come to realize these headlines largely missed the point. Instead of worker classification, we’ll instead focus on building new solutions that support the future of work and a new generation of entrepreneurs.

Here’s why: The on-demand economy didn’t make traditional employment go away, and it isn’t creating a new kind of work that demands new regulatory action. Far from being a phenomenon that came out of nowhere in 2015, the reasons people are choosing on-demand work can be traced back 30 years, or more.

The benefits of traditional employment have been steadily eroding since the 1980s. Take, for example, the fact that:

  • In 1982, almost 60 percent of full-time workers at U.S. private sector firms were enrolled in defined-benefit pension plans. Today it’s about 14 percent.
  • The average duration of unemployment was about 8.5 weeks in 1980. In June 2015, it was 28.1 weeks.
  • Today, 37 percent of American households are home to adults working two or more jobs.

During this same time, the contingent workforce has been steadily growing. Full- and part-time contingent workers represented 17 percent of the U.S. workforce 25 years ago; they have reached 36 percent today, and are expected to grow to 43 percent by 2020.

So, the on-demand economy is simply the next iteration of an existing trend. People are choosing on-demand work because it offers them the autonomy, flexibility and frictionless access to customers they need to take control of their careers.

At Intuit, we hear this every day from the tens of thousands of freelancers who use our products to manage their personal and business finances. We’re also seeing it in the data. We recently released the initial findings of a new study of more than 4,000 people working for 11 different on-demand platforms. The study found that:

  • Only 5 percent earn all of their income from a single on-demand platform.
  • 43 percent also have a traditional full- or part-time job (defined as a W2 job).
  • On average, people spend 12 hours per week on their primary on-demand platform.
  • People generate an average of 22 percent of their household income from on-demand work.

This data shows that employment as we know it has shifted. It’s not black or white — employee or contractor — it’s a rainbow of options. Instead of trying to categorize workers, it’s time to focus on how best to enable on-demand companies to grow and thrive, while also protecting and enabling workers to find the flexibility they need to be successful.

Moving the debate in this direction will take a concerted effort. It will require a deeper empathy for the needs and expectations of on-demand workers themselves. Who are they? Why did they choose this work? How satisfied are they? What do they want?

The 2016 presidential election is a great opportunity to raise the profile of the real needs of on-demand workers. It should factor in to conversations about the middle class, income inequality and the pursuit of the American dream. After all, the 2016 election may be the last one in U.S. history before people working at least part-time as freelancers comprise a majority of the working population’s vote.

The best place for government to start is to give innovators in the space the freedom to explore new ways of providing support to workers. Just as technology removes the friction of finding a job, why can’t technology remove the friction of supplementing benefits and dealing with taxes? For example, at Intuit we’re already delivering more than $3,800 in average tax savings to users of our new QuickBooks Self-Employed product.

Existing rules and regulations around employee classification discourage marketplaces from partnering closely with companies providing worker services, such as healthcare, taxes or retirement, out of fear they’ll be subject to a misclassification suit. How could we work together to better support the workers if we removed this risk?

2016 needs to be the year we shift from looking backward, trying to fit new innovations into old paradigms. It needs to be the year we look forward, embrace the future of work and find innovative ways to power the new economy.

Above all else, in 2016 we should celebrate people working on-demand jobs for their willingness to take charge of their careers, for their refusal to sit around waiting for the glory days of “traditional” jobs to return and for their determination to embrace new opportunities.

More TechCrunch

A Singapore High Court has effectively approved Pine Labs’ request to shift its operations to India.

Pine Labs gets Singapore court approval to shift base to India

Ahead of the AI safety summit kicking off in Seoul, South Korea later this week, its co-host the United Kingdom is expanding its own efforts in the field. The AI…

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

14 hours ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

3 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

3 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data