from Hacker News

GrubHub trial could have major implications for the gig economy

by flardinois on 9/6/17, 6:20 PM with 5 comments

• by justboxing on 9/6/17, 8:40 PM

  > It’s worth noting that companies like Shyp, Luxe and Sprig, which all made a big deal about switching its workers from 1099 contractors to W2 employees, have all shut down. Ceasing operations is typically a multi-faceted decision, but it’s an interesting commonality between those startups.

  I have no opinion on whether the contract rates are fair at any of these 'Gig Economy' startups and apps, but if this trend continues, aren't the workers essentially 'firing' themselves? Because, when the company loses a class action lawsuit these workers bring against it, their business model falls apart (from having to pay benefits etc, esp in states like California), and they shutdown, and instead of making some money as contractors, they make no money at all?

  Or are they all in it thinking they'll get a HUGE 1-time payout on the settlement? That also doesn't make sense because in most - if not all class action lawsuit cases - the actual amount an individual receives is paltry compared to the total amount (which could go in millions) due to the sheer number of plaintiffs involved.

• by jbob2000 on 9/6/17, 7:31 PM

  The outcome of this will be that GrubHub will start limiting the number of hours their drivers work. There's no way GrubHub will consider them employees, that would kill the business model.

  The banks in Canada already do this. If you are a contractor, you can only work for 18 months before you are required to take 3 months off. This is to avoid you being classified as an employee, entitled to benefits and other employment perks.