What kind of risk/liability does these "employees" generally take? Like washing someone's unlocked car, is the employee liable for any damages or the company? If I'm do carpenting work distributed from TaskRabbit and hurt myself so badly I get disabled, do TaskRabbit have insurance for me? What is the standard for this? One reason why buying services is expensive is that the service provider takes risk and needs to insure their workers, I very much doubt that these TaskRabbit-type companies do that... Or am I wrong?
I hired a TaskRabbit to pick up a large amount of IKEA and deliver it to my house. The TaskRabbit proceeded to show up an hour late with the furniture...because she dropped the furniture on her foot, breaking multiple bones.
Once I heard this, I realized "Shoot, I contracted her. Am I legally liable for her injuries?" (Fortunately for me, she shrugged it off, and seemed to be covered under some insurance of her own.) And if she had not delivered the furniture due to her broken foot, would TaskRabbit make me look like the bad guy for asking for my money back? (Fortunately again for me, she made the delivery, amazingly.)
While things turned out OK in the end, suddenly the whole service felt much riskier, for both the employee and the consumer - and I felt irritated at TaskRabbit for subjecting me to that risk without some sort of a safety net in place. (Heck, I would have paid extra for one, some sort of "TaskRabbit Insurance.")
I have to say, as much as I dislike the idea of tight regulations on workers, and can see directly how much cheaper my services are removing those regulations...I think next time I'll pay the premium for a more legitimate furniture move, at least, until the law catches up to services like TaskRabbit.
This is a huge point. A single uninsured mistake with an expensive car could potentially wipe out carwashing earnings for months. (See http://news.ycombinator.com/item?id=4492619)
This could be mitigated by TaskRabbit cooperating with an insurance provider and selling "insured" work. There are great margins on insurance as we all know. In their TOS TaskRabbit basically says "TaskRabbit.com Only Provides a Venue" (check it out: http://www.taskrabbit.com/tos). Why don't some retail-insurance megacorp approach them? This could be TaskRabbits no1 source of income instead of their no1 problem...
I'm not sure about the US legal situation but here in Sweden there is so much legislation to protect workers that a TaskRabbit kind of service becomes hard to achieve.
IANAL, but I'm almost positive they don't have to do this in the US.
In the US, hiring contractors exempts you from many of the taxes and liabilities of hiring employees, and they are also exempt from most benefits (their right to litigation against the company is also limited).
US readers will certainly be familiar with Vector (ie, Cutco knives) - they get away without providing any benefits/insurance, without reimbursing for expenses such as gas/phone bills, and with paying what often amounts to minimum wage because all of their salesmen are college students who are hired as 'contractors'[1].
Don't think I'm saying that contracting is bad - the same laws allow others to make very large sums of money working as contractors. It really just depends on what the setup with the company is.
[1] I may be confusing some of the details with other similar companies, but I know Vector engages in at least some of these practices, all of which are commonly practiced.
Thanks for your reply. Talked with some more informed friends about the situation in Sweden and their conclusion is that work like TaskRabbit probably could exist in some kind of grey area (especially when it's one private individual working for another private individual for a small amount). However when the service grows the unions will try everything to make your workers "unionized" implying that either the service company (e.g. TaskRabbit) or the buyer needs to pay insurance and minimum-wage for the work being performed - basically hiring the individual.
I guess this is not interesting for must of you US readers but it could be telling of what could happen to your TaskRabbiters.
legally they operate as entrepreneurs providing services for customers sourced through a website.
This exempts them from many of the worker protections.
However, at least in Belgium this kind of micro-entrepreneurship is actively discouraged.
Contractors require an accounting-certificate or academic degree in order to setup a company (or sole tradership).
Skipping the basic step of registering as a company can leave you or the customer liable to all sorts of fines, depending if a court thinks the customer or the worker is at fault. The issue is sensitive because it involves manual labour, and there is a huge incentive to utilize black labour as labour costs are very high.
This renders a service like TaskRabbit a legal hazard for customers and workers, but the service itself can operate legally.
