Outside the Box Thinking in a Shared Economy

New technologies usually run ahead of the legal curve. Especially in workers’ compensation, where the legal curve bends slowly (and often in 50 different directions). Dave DePaolo from workcomcentral.com has a column up this morning that considers how employment classification in shared economic models such as Uber, AirBnB, and Lyft might be better addressed through the creation of a third employment relationship – the Dependent Contractor.

We have two classes of employment relationship: contractor and employee. In the eyes of the law there aren’t any others.

The employee is deemed to be dependent on the employer. The contractor is deemed to be independent of the employer. And never shall the two meet, according to the law. Despite the law’s tendency towards obfuscation, at least with regards to employment status the law seeks a clear dividing line.

But technology, as The Law has learned many, many times in the past, doesn’t care. The value of the shared economy is a trend that cannot be stopped; not by lawsuits, not by audits, not by penalties, not by anything.

Because people want to engage in efficient, profitable relationships regardless of the constrictions mandated by those who dictate social conformance.

Which is why we need to stop thinking that there are only two possible employment relationships.

The times now dictate that we have a third possible employment relationship: the Dependent Contractor as my law school roommate, ET, coined it.

The DC is going to be someone, like an Uber driver, who desires to work on his own, call his own hours, determine when he is on the clock and off, pays his own expenses, uses his own tools – but derives a specified contractual amount for his services and is clearly dependent on that relationship for economic benefit.

The employer might dictate where those services are going to be provided; might dictate exactly HOW those services will be delivered; may even dictate detailed control over dress, customer interaction, etc. In other words, may exert sufficient control over the DC that a court would otherwise find an employee-employer relationship.

But what if we created, legislatively, a sector for the DC to live in?

It’s worth a read.