Did you have any idea how life would change with the invention of the smartphone? I certainly never imagined.
In addition to keeping us connected through the phone function, we can also text, email, Skype, Snapchat, leave a voicemail, tweet and post on social media sites from anywhere within proximity of a cell tower.
Smartphones have replaced the little black book, calculator, camera, video-camera, glove compartment map, alarm clocks, newspapers, PCs, dictionaries, paper coupons, paperback novels … the list goes on and on.
We can use our smartphones to schedule hair appointments, make restaurant and hotel reservations, purchase concert tickets, bid on collectibles or goods online, locate the cheapest gas prices, comparison shop, teach us how to tie ties and even hail a ride.
* * * * * * * * * * * * * * * * * * * * * * * * *Each week, “resident riskologist” Keven Moore shines the light on America’s riskiest behaviors – from unsafe driving practices to workplace stress to common home accidents. And in the process, he provides the information needed to help people play it a little safer.
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The new iPhone contains 25 times more computing power than the whole world had at its disposal in 1995, and they are connected to each other and have even more data and processing power in the “cloud.”
You also probably never imagined the smartphone would change the landscape of the American workforce, with a whole new “on-demand freelance workforce,” also known as the app-enabled workforce. It is the result of pairing able-bodied people willing to work with these smartphones and app software.
Companies like Plowz & Mowz, the ridesharing services of Uber and Lyft, cleaning service Handybook and Homejoy Inc., odd-job facilitator TaskRabbit, and Urbansitters for babysitting and Handy for Handymen, have all come on to the scene in just the past four to five years. There is even an alcohol delivery app called Drizly, and all of these app-enabled services rely on freelance labor and they describe their workers as microentrepreneurs on the front lines of a new, flexible future workforce.
The on-demand economy is small, but it is growing very quickly. Uber, founded in San Francisco in 2009, now operates in 53 countries, had sales exceeding $1 billion in 2014 and a valuation of $40 billion. The sharp rise of this model is now creating an enormous impact on today’s economy, but is still invisible to many hiding under the traditional staffing models.
In 1989 the number of people working in the freelance workforce was sitting around 6 percent, but today current estimates put the number of freelance workers at 53 million, or about 33 percent of the U.S. workforce. That number is expected to grow to 50 percent by 2020.
Intuit, which recently partnered with Uber to help develop tax software solutions for their freelance employees, expects the numbers of freelancers to continue to grow significantly in coming years–based on a Intuit 2020 report.
As America’s workforce begins to shift from full-time employees to the free agency type of employment, many are liberated by the income and flexibility that these online app-enabled platforms provide. However, many say that they have little control over the terms of their employment, and many are starting to complain that their work contracts force them to shoulder much of the personal and financial risk, without the returns or advantages for their employment.
Many of these app-based, on-demand platforms must diligently avoid giving their freelance workforce any advice to avoid overstepping their role—or risk being viewed by the government as employers, with all of the obligations that that brings. So they all must draw a hard line that they are not employees, thus forcing these freelancers to fend for themselves. For instance some drivers that work for Uber, also freelance for Lyft and Sidecar, two of the other ride-sharing companies, which makes tax season a living nightmare.
Some of these freelance employees isolated and confused as they must learn how to run their own business. Then because of their workplace status, they are not protected by the same labor laws as traditional employees are –s uch as the minimum wage, overtime, antidiscrimination statutes and even the right to unionize.
The question is how far will this freelance economy grow and to what extent? Imagine a world some 20 to 30 years from now where a construction site is now staffed entirely with on-demand freelancers instead of the traditional subcontractors, where everybody is individually responsible for their own safety and liability. A place where company benefits such as health care, 401K contributions, paid overtime, holidays, vacations, disability and life insurance, etc., are no longer offered.
Therefore regardless of how innovative this on-demand workforce model may seem, because of concerns it is now being met with plenty of resistance. A handful of legal scholars are arguing that labor laws should be expanded to include who find job assignments via apps. These workers may be able to choose when and where they work, but they lack control over their payment and wage rates, and they can’t negotiate their work contracts.
As a result it’s harder to regulate this thriving industry and it also makes it even harder to control its risk exposure, workplace conditions and the environment to ensure a safe workplace. Many of these freelancers lack the ability or are just too blinded by the fast income to perceive their own risk exposures … until it’s too late.
On-demand companies share in their own risk exposures, as these companies must set high standards for screening, vetting, hiring and training applicants to join the platform. After all, many of these freelance employees will be working directly with the public in the confines of their own vehicles or the homes of the public.
Much still needs to be done to better regulate this growing industry for the best interest for all. Being a capitalist at heart, I truly don’t want to see the government binding the hands of these entrepreneurially minded start-up companies as this concept falls in line with what has made America thrive since 1776.
As we learned a century ago, however, during the industrial revolution, when left unchecked, greed and profits can stand in the way of treating employees fairly and safely. This new work concept needs to be embraced so that it doesn’t stifle the economy, but the laws do need to catch up and adapt to make it work for all.
Be safe, my friends.
Keven Moore is director of Risk Management Services for Roeding Insurance (www.roedinginsurance.com). He has a bachelor’s degree from University of Kentucky, a master’s from Eastern Kentucky University and 25-plus years of experience in the safety and insurance profession. He lives in Lexington with his family and works out of both the Lexington and Northern Kentucky offices. Keven can be reached at kmoore@roeding.com.