A report in 2015 showed that 34% of the American workforce is working as a freelancer or independent contractor, 1099 workers that would not be considered 'employees.' That number, according to the same study, is set to increase to 40% in 2020, incredibly close to half of the workforce being in a blurred line between employee and transient worker. Several companies such as Shyp have moved to change their "workers" to W2 employees, changing their designation to that of a full-time employee, though they claim this wasn't in response to several lawsuits that have taken place about this designation.

This issue centers around the benefits and protections one receives as an employee, such as access to benefits, but is far from the only issue (or danger) that both the owners and employees of the on-demand and sharing economies face. An entire website, "Who's Driving You," has begun collating the varying assaults by Uber and Lyft drivers, criticizing the onboarding process for lacking fingerprinting or stringent background checks.

Anyone starting a ridesharing business is currently facing a wall of potential business and social dangers; if they are not careful with the way they build their businesses, they will potentially endanger their customers and their workers. That's why consultants, such as The Rideshare Guy Harry Campbell, have grown their businesses both creating content for the workers themselves and helping businesses understand the challenge of the on-demand world.

The ease of finding potential workers for an on-demand company (IE: anyone who can perform the particular task at hand, not necessarily a specialized skill) is what is leading to a vanguard of more focused businesses. Launched in February, Juno is an Uber and Lyft competitor that focuses on providing the best drivers possible (requiring a 4.7 or higher rating) and making them happy with smaller cuts from their pay, along with equity in the company.

Though some are questioning whether they will succeed based on a number of factors, there is a clear excitement for a higher-quality experience with happier drivers. Furthermore, Chariot is launching to provide a car service specifically for women, with female-identifying drivers to combat the fear that many women have taking Uber or Lyft vehicles driven by men. The service will only pick up women or men under the age of thirteen, and though there are worries about labor violations based on discriminatory hiring, it is likely to be a positive addition to the world.

Other companies are also fighting the battle for drivers, homeowners and other on-demand workers that are underserved. Slice, a New York based insurance tech company that recently left stealth to provide easily-accessible and "complete" insurance packages. For example, the car insurance provided by many companies is deficient, not covering every time (waiting to find a passenger, driving home, etc.) you're driving as an Uber or Lyft driver, and it is against many consumer policies to driver as a contractor. "Many of the dangers for individuals participating in the sharing or on-demand economy are tied to trust, protection and safety. Of these, the two most concrete dangers are property damage to the physical asset used in an on-demand transaction, whether that's an Uber driver's car, or an Airbnb host's property, and the associated liability if someone gets hurt or hurts others," said Tim Attia, CEO of Slice. Consultant Harry Campbell even has a detailed post on the subject; the situation is confusing, with large deductibles and the potential of lost coverage or even a fraud investigation.

Slice hopes to offer simple, complete packages based on the exact make and model of your car, as well as the rides you take, integrating with services directly. They also feel that there is an opportunity to protect homeowners on HomeAway, VRBO and Airbnb. "Someone making $5,000 per year on Airbnb is easily taking on $1M to $6M in liability if someone gets injured, slips and falls (or worse), or simply damages their home...this can be financially catastrophic," said Attia. A homeowner's or renters' policy, if the home (rented or owned) is not listed as a rental property, would most likely not provide coverage according to a spokesperson from USAA.

This is the issue with the on-demand and sharing economies; while it's a great opportunity for the average person to make money from their spare time or empty home, it's also a potential financial nightmare if they aren't paying attention to the terms and conditions of their policy. Conversely, as a business owner you must be prepared to monitor and understand any on-demand or contracted worker, or even your home that you are renting. Despite the fact that someone may not be your employee, you are responsible for them, and that means thorough background checks, careful planning and care for worker and customer alike.

Published on: Apr 15, 2016
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