There’s a long read in New York Magazine today about how well-funded startups are using contract workers to keep costs low, a trend called the “1099 economy.”
Reading with the caveat that the magazine is obsessed with Silicon Valley at the moment, the article raises some interesting questions about whether this popular labor model is exploiting these independent-contractors and if it could lead to lawsuits for startups that treat contract workers like employees. A lot of local startups — including Uber, Lyft, TaskRabbit, Homejoy, Spoonrocket, Postmates, DoorDash, and Washio — use this model and Uber is currently fighting a class-action lawsuit from drivers in California and Massachusetts who want to be classified as employees.
But the most shocking piece of reporting comes at the beginning of the story, when writer Kevin Roose says he hired a Homejoy house cleaner from one of those Facebook offers — a $19 intro price to have your entire place cleaned — and the man who showed up turned out to be homeless. Roose says that his Bay Area friends have also had “several” Homejoy cleaners who were homeless.
The Washington Post recently criticized Homejoy’s approach, profiling a contractor named Anthony Walker who had spent time in a homeless shelter before working as a cleaner for the company. Cleaners make between $14 and the low-$20s per hour, according to the Post, from Homejoy’s fee of anywhere from $25 to $35 an hour.
Where these companies can and will get into legal trouble is if they make demands on contract workers about when they work, what they wear, how they’re trained, and other factors that would normally fall into the employee category. A former Homejoy cleaner anonymously told New York Magazine that the company encouraged him to work on certain days, made him wear a uniform, and trained him.
If you’re looking to support local startups that do hire W-2 employees and give them heath benefits, on-demand dinner services Munchery and Sprig are among them.
