The Future of the Sharing Economy and Gig Workforce

There is a significant debate underway in many nations as to whether or not people working as Uber drivers, Instacart shoppers and similar agents are actually employees, rather than contract workers. Legislative reform has already been attempted on a large scale in this regard. In some cases, class action lawsuits have been filed by the contract workers. If governments rule that such workers are employees (rather than independent contract workers), it would have a massive effect on the business models of sharing economy firms. Such regulations may evolve in different ways in various regions of the world. The EU and UK may be more likely to force firms to consider such workers as actual employees, at least to some extent.

The U.S. is less likely to rush into such changes after a 2020 proposition approved by voters in the state of California took much of the power out of the state legislature’s efforts to require most contract workers to become recognized as employees. However, the proposition did provide for better protections for contract workers, including medical assistance for accidents that occur while on duty, and minimum compensation requirements. Proposition 22 was challenged in 2021 when a superior court judge in California ruled it was “unenforceable.” However, in March 2023, a California appeals court ruled that the proposition should remain state law. Legal wrangling continues, as The Service Employees International Union lawsuit that challenges the proposition continues as of early 2024.

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