The Homeless house cleaners of the sharing economy

If this NY mag article is to be believed you can hire house cleaners who are themselves homeless via www.homejoy.com a San Francisco based startup that has received $40 million in funding. Guess this says a lot about how out of whack the bay area real estate market is, but that is not what the article is about. Instead it tries to shine light on another issue, namely the fact that many recent startups (many of them falling in the broad (and equally meaningless) ‘sharing economy’ category) offer services that are performed by independent contractors instead of regular employees:

To explain why it’s possible for a cash-flush tech start-up to have homeless workers, it helps to know that the man I hired through Homejoy wasn’t a Homejoy employee at all. That’s because Homejoy doesn’t employ any cleaners — like many of its peer start-ups, it uses an army of contract workers to do its customers’ bidding. To hear Homejoy tell it, it’s simply the digital middleman that allows people seeking home-cleaning services to find people willing to do it. […] As the Washington Post wrote, “Homejoy is just organizing the masses of people who already offer their cleaning services independently.”

While the NY mag article makes it sound as if this is a fairly recent phenomenon (citing an abundance of startups relying on contract workers such as Uber, Lyft, Homejoy, Handy, Postmates, Spoonrocket, TaskRabbit, DoorDash or Washio) this practice is anything but new.

My first job fresh out of high school was working as a bike messenger for Der Kurier in Hannover. As part of that work i was required to wear a company shirt, a company issued messenger bag and could only work on days that they had scheduled me in. I also had do pay them rent for the radio and 20% of the fares that i earned. At that time this kind of ’employment’ was common for bike messengers in lots of places (i worked under similar conditions for other companies in Hannover, Berlin and New York). The only place where bike messengers were employed and paid by the hour and not by the delivery was in Amsterdam where i worked my last years as a messenger (at one company we even had a pension plan which means that i will draw a pension of €10 per year(!!) once i am 67).

As a bike messenger i never had a problem with being a contractor and being paid by the delivery (at high-demand times that meant more money and motivation to go extra fast and at low-demand times you could always read a book). But to my mind this construction has always been about limiting the cost of labour for employees. The fact that so many ‘Sharing Economy’ startups are working with contractors instead of employees makes it rather obvious that the sharing economy is much less about sharing ressources and much more about reducing the cost of labor. Or as Kevin Roose notes in the NY mag article:

Require a 1099 start-up to reclassify its workers as W-2 employees, and you radically change its ability to lower prices and undercut the competition — which was, in many cases, a key reason investors were interested in the first place.

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