Companies like Uber may get a lot of buzz, but they're not innovative; these throwbacks to the late 19th century aren't likely to have an especially long shelf-life because they'll ultimately end up being sued straight out of their high-tech offices.
Not being responsible for employees’ taxes and benefits allows companies like Handy to operate with 20% to 30% less in labor costs than the incumbent competition, leading to eye-popping numbers like Uber’s $40 billion valuation or Instacart’s latest $220 million round of funding. Lose this workforce structure—either by a wave of class-action lawsuits, intervention by regulators, or through the collective action of disgruntled workers—and you lose the gig economy.
"Sharing economy" company Handy, which matches service providers such as house-cleaners to clients, is a case in point: they've raised $42 million in venture capital, but they're facing a class action lawsuit from angry workers that may cost them as much as $600 million. This whole "sharing economy" thing isn't the panacea that its promoters claim; the principals make a lot of cash, as do their lawyers, but the workers get the shaft.
