wage gap . But one emerging reality from the trend of the flexible economy is a tax classification gap .
In one case dealing with this issue , a London employment tribunal ruled in late October that Uber drivers in the U . K . should be classified as employees of the San Francisco-based company — and no longer be considered self-employed or independent contractors . One of the judges in the ruling said it was “ unreal to deny that Uber is in business as a supplier of transportation services .” The U . K . ruling follows Uber ’ s settlement of two classaction lawsuits with drivers in California and Massachusetts for up to $ 100 million after drivers argued that Uber classified them as independent workers in an effort to drive down wages and withhold benefits .
This news is part of the ongoing discussion of how workers and employers should operate and interact in the evolving “ flexible economy .” Rulings like these open the floodgates to a series of important labor questions such as : What does it mean to be an employee today ? Who is responsible for protecting independent workers ? Who is accountable for labor vulnerabilities ?
These become meaningful questions as the popular two-sided marketplaces that cater to flexible working continue to grow and revolutionize the way we do business . Companies such as Uber , Lyft , Airbnb , Care . com , Etsy , and Snagajob are just some of the online platforms that allow suppliers and buyers to meet and trade goods or services , and they show no signs of slowing down .
The population of workers taking advantage of these opportunities is growing , too . According to a 2015 study from Intuit , by 2020 more than 7.6 million Americans will be working in the on-demand economy . That ’ s more than double the current number of 3.2 million .
An October 2016 survey of approximately 8,000 U . S . and European workers by the McKinsey Global Institute reported that between 20 and 30 percent of respondents engaged in some form of independent work . Among the independent workers , 70 percent said it was their preferred choice ( 30 percent as free agents for their primary income , and 40 percent as casual earners for supplemental income ).
While the remaining 30 percent of respondents chose independent work out of necessity , generally speaking , independent workers report higher levels of satisfaction on many aspects of their work life than traditional company employees . These factors include flexible hours and location , as well as work / life independence . On the flip side , aspects that scored lower contentment levels were income security and benefits .
What does it mean ? All of this this begs several questions : As the way we conduct business and the traditional employer-employee relationship evolves , how do we protect the rights of workers ? Where does the contract begin and end , and who are the stakeholders ? And how do all of these changes affect hiring practices ?
We ’ ve been thinking about this a lot at Snagajob , especially since the shift toward a gig economy shows no signs of decelerating . While more complex challenges such as the tax classification gap will require more discussion between private business owners and innovative policy makers to really begin to implement change , some challenges are being tackled today .
For our part , we are testing new technology and systems that can help multi-unit franchisees attract , hire , and retain quality hourly workers who have evolving needs and desires . In May , we launched a pilot program with a Jersey Mike ’ s franchisee in Northern Virginia to create a network of on-demand workers . The premise was that even when a store is fully staffed , schedule changes happen , which can derail even the best-laid plans . Dealing with these last-minute changes isn ’ t just about finding another person . Managers must also consider overtime , ACA , compliance , and more . Supplying operators with a pool of readily available workers ensures that coverage ( and compliance ) is more easily managed and fulfilled .
To be a part of this on-demand network , applicants had to be screened , trained , and onboarded before accepting available shifts . After just four weeks , we were surprised by the results :
• 30 shifts were filled , with even more requested ;
• 84 percent of last-minute shift requests were filled through the on-demand network ( some within 2 minutes );
• 4.4 stars ( out of 5 ) was the average rating given to an on-demand worker ;
• 100 percent of on-demand workers were recommended for future shifts ;
• on-demand workers were paid within 30 minutes of completing their shifts ; and
• 95 percent of manager opinions of on-demand workers changed for the better .
Brian Deeth , the franchisee of six Jersey Mike ’ s in Northern Virginia , said , “ Our customers are having a better experience inside the restaurant now that we have the ability to make sure that every shift is staffed properly . I can guarantee that it ’ s because we are able to run more smoothly not having the stress associated with managing noshows and call-outs .”
What we found is that not only were Brian ’ s customers happier , his team members were too . Available , on-demand workers were able to get more shifts , and those already on the schedule didn ’ t feel overworked by having to do someone else ’ s job on top of their own because of a last-minute change . That ’ s a win-win for the team ’ s productivity and morale — and Brian ’ s bottom line .
Given the success of this pilot program , we expanded to focus on student workers at Virginia Commonwealth University and partnered with half a dozen companies in Richmond . We named our experimental network HUSL and are gearing up to broaden our scope with even more workers and employers . We look forward to learning more through our experimentation , and through it continuing to respond to the needs of hourly workers , employers , and the platforms where they meet .
Jocelyn Mangan is chief product officer and chief marketing officer for Snagajob . Contact the company at 866- 227-0466 .