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Do you engage employees, workers or self-employed contractors? Adam Grant and David Israel look at the rise of the gig economy and the latest court battle to establish employment status.
Advances in technology and changes in consumer trends have seen a boom in the so called "gig economy". This has changed the way in which the traditional workforce model and employment relationship functions in certain sectors, with a move towards short-term assignments and self-employed independent contractor status. One such business that has embraced this change is Uber.
Uber is big business. It currently has more than 30,000 drivers working in the UK, has investors including Goldman Sachs and Google, and has been valued globally at $62.5 billion.
Its success is built on the back of its dedicated app that provides a platform for private car hire by connecting passengers directly with drivers with the offer of cost-effective fares.
It engages its drivers as self-employed independent contractors with the tagline, “Work for yourself, drive when you want, make the money you need”. Uber believes that this gives drivers the flexibility to work as much or as little as they want.
However, this independent contractor status is now being challenged in the UK courts and the outcome could have wide-ranging ramifications not only for Uber, but also for a number of bus