Gig-Dependence: Finding the Real Independent Contractors of Platform Work

Abstract

Platforms such as Uber and TaskRabbit avoid employment obligations by categorizing their workers as “independent contractors.” Declining to follow overtime, antidiscrimination, and other workplace mandates, these platforms claim to employ no one. Applied on a grand scale, the entire project of platform labor threatens to destabilize our contemporary understanding of employment law.

But not all platform workers possess the characteristics of genuine independent contractors, as courts first envisioned that category. Judges did not originally formulate the independent contractor distinction to define the boundaries of workplace protections; rather, the independent contractor classification was designed to limit the liability of masters for their servants’ torts. Courts in these early cases identified certain workers—independent contractors—who possessed the skill, autonomy, and financial strength to pay for their own tortious misconduct and, accordingly, stand alone in the marketplace.

Today, when judges evaluate whether gig workers are “independent contractors,” they should look for the same hallmarks of commercial self-determination that originally prompted the independent contractor distinction. Fortunately, a few recent judicial decisions have embraced a simplified standard—the so-called “ABC test”—to assess whether contemporary workers are bona fide independent contractors. In contrast to more popular tests that have produced indeterminate results, the ABC standard begins with the presumption that workers who provide labor to firms are employees. If businesses want to overcome this presumption, they must prove three separate elements to show that their workers possess the marketplace strength of legitimate independent contractors. By using the ABC test to sort workers based on their economic autonomy, courts can more effectively distinguish between normal employees and the genuine independent contractors of platform work.

Keywords: on-demand economy, ridesharing, sharing economy, gig economy, peer economy, service platform, Lyft, TaskRabbit, Handy, misclassification, independent contractor, subcontractor

JEL Classification: K12, K20, K31, K42