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Corporate America Is Using the Sharing Economy to Turn Us Into Temps

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The last few years have brought an explosion of startups, like Uber and TaskRabbit, that effectively act as middlemen. These companies don’t actually employ the workers who ferry passengers around town or assemble strangers’ Ikea furniture. Their online platforms merely connect people who want to provide these services with people who want to pay for them. As a result, the Ubers and TaskRabbits of the world don’t have to provide most of the benefits we normally associate with fulltime employment, like health insurance and a living wage, or even stable work.

Pretty much the only consolation is that the Uber model only really affects small-time operators who can be easily paired with individual customers—the cab driver or the handyman. There’s no Uber for people who toil away in larger companies, which is, after all, where most of us work.

Um, well, until now. Over the last year or so, a handful of startups have begun helping companies find workers to complete their odd jobs, too. One, called Zaarly, had a more traditional sharing economy focus before it shifted to address the staffing needs of small businesses. TaskRabbit has started catering to businesses as well.1 Though the efforts vary in their particulars, the basic model is to make it frighteningly easy for companies to outsource work. If the model catches on, most companies may one day employ only a small cadre of full-timers, which they beef up with freelancers as the need arises.

Perhaps the most ambitious worker-on-demand startup to date is a company called Wonolo (short for “Work. Now. Locally”), the year-old brainchild of two San Francisco entrepreneurs. The idea is for companies to post job listings to an online platform the same way people in need of a house-cleaner post a job to TaskRabbit. After it’s posted, one of the app’s users (known as “Wonoloers,” which the app vets extensively) can claim the job and report to work as soon as a few minutes or hours. Suppose, for example, that an online retailer suddenly realizes it’s short a few order-fulfillment jockeys—the people who roam warehouses and locate the goods that need to be boxed and shipped. The retailer can post the jobs on Wonolo and bulk up its workforce that same day.

Wonolo’s co-founders, Yong Kim and AJ Brustein, came to their creation through a non-traditional path, at least for a startup. Last year, the Coca-Cola Company selected them to be part of its in-house “Founders” program, which brought one pair of entrepreneurs to a dozen of the company’s locations worldwide. Coca-Cola gave Kim and Brustein some capital, as well as the full run of its facilities and all the executives therein. All it asked in return was that they start a company that helped solve a problem Coca-Cola encountered.

For weeks, Kim and Brustein struggled to figure out what that would be. “We were sitting in an office in San Francisco, staring at the wall,” Kim told me. But as they spent time with the company’s operations team, they noticed a recurring theme: a stream of jobs Coke needed done right away, but for which it couldn’t always anticipate the demand—like, say, stocking shelves in stores.

The catch was that filling these jobs quickly was nearly impossible. “If they had planned needs, they could post the jobs on Craigslist, … or call up temp agencies, give them three-day notice,” Kim told me. “But if I need two people to come help me today or tomorrow, there’s no way to get the job filled.” Thus was born Wonolo. In its short existence, the app has not only helped Coke (which conducted two pilot projects), but several dozen e-tailers, hotels, and customer service hubs.

So how should we think about Wonolo? Should hourly workers currently employed at Coke and the like regard it with same sense of existential dread as many cab drivers regard Uber?

I think that’s a bit extreme. In truth, Wonolo affords workers some real advantages—some of which Uber and TaskRabbit share, some of which they don’t. For example, like those other services, Wonolo provides unemployed or underemployed workers with a reasonably steady source of income, something the post-recession economy still isn’t doing for too many people. It can also give workers much-needed flexibility. Kim says that while he and Brustein expected to draw users overwhelmingly in their late teens and 20s, many are stay-at-home parents with a few free hours in between dropping off kids and picking them up.

Unlike Uber, Wonolo also gives workers a chance at fulltime employment, replete with protections and benefits. “A lot of these people … couldn’t even get an interview [at a company],” Kim says. With Wonolo, the company can quickly hire a temp for a few discrete assignments, during which time the worker gets a chance to prove him- or herself. (Kim can’t quantify the fraction of Wonoloers who graduate to steady employment, though given the variable nature of the assignments, it’s almost certainly much less than half.)

Wages are another way Wonolo might distinguish itself for the better. If you see a job you’d like to accept on a “distributed workforce” app, you typically have to submit a bid for what you’d charge.2 The person whose house you’re cleaning is likely to receive a number of bids and pick the cheapest one. But there’s no bidding on Wonolo. Companies post jobs and what they typically pay for the work (although the number isn’t binding), which the Wonoloers then decide whether or not to accept. Because the wage they pay a temp amounts to a small portion of their overall costs, chances are they care much more about having the work performed well than saving a few bucks.

Still, there are features of Wonolo that won’t reassure anyone mourning the loss of traditional labor arrangements. For example, the there’s no workers comp insurance as part of the deal. If you throw out your back while straining to reach a snow globe in some e-commerce fulfillment center, you’re out of luck. Wonolo doesn’t provide workers comp insurance, and the Wonolo terms of service agreement suggests it would be damn near impossible to extract compensation from an employer.3

Likewise, Wonoloers don’t exactly radiate bargaining power. Kim concedes that, at the moment, there’s a far larger supply of workers than there are jobs on his platform. “Our job fill rate [for companies] is now over 90 percent,” he says. “Whenever companies post a job, it’s filled within seconds or minutes.” The company seems to straddle that fine line between 21st-century self-actualization and a 19th-century reserve army of unemployed. Come to think of it, maybe that’s a fair description of the entire sharing economy.

And it’s easy to imagine the situation getting worse. Despite the best intentions of their founders—and Kim and Brustein are clearly well-intentioned—if platforms like Wonolo catch on, companies will begin to restructure their entire workforce to take advantage of them. As Susan Houseman, a labor economist at the Upjohn Institute, points out, companies historically built their staffs to handle their peak loads. Supermarkets and department stores kept enough workers on payroll to handle the daily rush; manufacturers sized their labor pool to the peak production season. The downside was that these companies were overstaffed during off-peak times. The upside was that their employees got stable work and income.

But, in recent years, companies have become increasingly sophisticated at figuring out when demand will peak, and staffing up only for those moments. “We’ve already seen that a lot with retail, hotels, that type of business,” says Houseman. “Scheduling algorithms that really lead to short and variable work.” The proliferation of apps like Wonolo will only accelerate that process. Kim told me that some of his early customers are hotel chains dealing with the fact that “when you check in, the room’s not ready because housekeeping didn’t show up.” There are e-commerce companies who “constantly deal with the ups and downs of their fulfillment needs.”

Granted, there are limits to how widely an app like Wonolo could reach into Corporate America. Kim stresses that Wonolo only really traffics in jobs that require little training and where the output is uniform. “If I want someone to build a website for me, the outcomes could be very different [based on] different tastes, experience. Those are not the types of jobs we’re after,” he says.

Still, he and Brustein do have expansionary ambitions—including white-collar fields like nursing (say, checking vital signs at a hospital after a natural disaster) and law (proof-reading legal documents at three in the morning). And there’s no reason why similar apps couldn’t connect employers with workers who perform more intellectually demanding tasks. Already there’s a site called HourlyNerd, which helps companies hire MBAs for discrete gigs using the TaskRabbit model. It’s not hard see how such platforms could one day affect tens of millions of people.

If that comes to pass, the effect will be to shift risk onto workers, according to Houseman, “making work less secure and less stable”—particularly for the lowest-skilled workers, who have the least leverage. Maybe they should call it the shifting economy instead. 

  1. Since 2005, Amazon has offered a service known as “Mechanical Turk,” in which “requesters” post highly repetitive tasks that “providers” can accept. But these are all done in front of one’s computer. In fact, the general idea is that the requester would have a computer complete the task, like tagging photos, if a computer were able to. But at this point the work still requires an actual human brain, even if it doesn’t tax it very much.

  2. TaskRabbit itself worked this way until July, when it switched to a system of standard hourly rates. UPDATE: A TaskRabbit official writes to say that the company has "set an hourly minimum that is nearly double the national minimum wage."

  3. “We are constantly talking to insurance companies to figure out innovative ways to address those situations,” says Kim. 

This article initially referred to HourlyNerd as "an app." It is a website.