SlideShare uma empresa Scribd logo
1 de 45
Baixar para ler offline
THE ON-DEMAND
ECONOMY:
HIDDEN DANGERS OF “UBERIZING”
YOUR BUSINESS MODEL
Presented by the Entrepreneurial Law Clinic
of Thomas R. Kline School of Law, Drexel University
Student Lawyers:
Joshua Goren Dylan Caplan
Mark Hildebrand Michelle Paznokas
Clinic Director: Steven Rosard
Featuring: Randal White, Fox Rothschild LLP
WHAT IS THE ON-DEMAND
ECONOMY?
Platform
(form of communication)
Supply
(drivers, short-term
rentals, etc.)
Demand
(customers
MUTUAL NEED
PRODUCTS
CUSTOMER
DATA
CUSTOMER
DATA
PRODUCT
AWARENESS
“HIDDEN DANGERS”
1. Regulators
2. Worker Misclassification
3. User Dissatisfaction, Property Damage,
& Personal Injury
HIDDEN DANGER NO. 1:
REGULATORS
Michelle Paznokas
UNDERSTANDING THE TENSION
• Sharing platforms defy traditional notions about the way civic resources
should be used
• Example: Using a house as a home, not a hotel room
• Professionalized and regulated incumbents allege unfair competitive
advantage
• Example: Taxi coalitions versus Uber
• “Local governmental powers are at their strongest when regulating property
markets through zoning powers, regulating hotel and restaurant markets
with tools like taxes and safety inspections, and regulating transportation
through direct oversight and city-provided services”
THE HEAVY HITTERS’ GAME PLAN
• Step 1: Develop a customer base before obtaining regulatory approval
(create “facts on the ground”)
• Step 2: Claim that the company is not a service provider, but merely
connects third-parties to one another
• Shifts the regulators’ focus to individual independent contractors
• Step 3: Utilize a loyal consumer base to influence politicians and
regulators
• This is not a viable game plan for every company
LICENSES & PERMITS
• Do companies in the sharing
economy require the same
permits and/or licenses as
traditional operators?
• Who is liable for not getting a
license (i.e., the platform, or the
worker)?
• How can a platform mitigate
that liability?
LICENSES & PERMITS:
HIGHLY REGULATED
MARKETS
• The question of whether on-demand companies need the same
licenses and/or permits as traditional operators is, unfortunately,
largely unanswered
• Based on recent examples, the expectation fluctuates based on the
then-current government involvement in the specific industry
• Highly regulated industries, like transportation and lodging, as opposed to
industries traditionally reserved for independent contractors (e.g., TaskRabbit
and “handymen”)
• Example: High barriers to the NYC taxi market
LICENSES & PERMITS:
BURDEN OF
RESPONSIBILITY
• Common sense and current
regulatory trends dictate that the
worker is responsible for
obtaining license
LICENSES & PERMITS:
BURDEN OF
RESPONSIBILITY
• Companies may be held liable for
failing to encourage and/or
require proper licensing and
permits
• “Connectors of people” argument
• The company is not the service
provider, thus does not need a
license
TAXING SHARING ECONOMY
TRANSACTIONS
• How should (or could) sharing economy transactions be taxed?
• Burden to adhere to applicable taxes often falls on the worker
• If the worker fails to pay, the company may have to instead
• Sharing economy companies often “strike deals” with local governments to
remit taxes
• Should these companies pay specialty taxes (e.g., hotel occupancy
taxes) and/or federal income tax?
• Like all legal questions… “it depends”
PREDICTING THE FUTURE
REGULATORY LANDSCAPE
• Retrofitting old regulations
• Local/state governments have been revamping old regulations (e.g., “cottage food
laws” and “bed and breakfast” classifications) to account for the emerging sharing
economy
• Creating new regulations
• Some localities have been writing completely original laws targeted at the on-demand
economy
• Example: “Transportation Network Companies” in California and Colorado
A BRIGHT FUTURE (MOST LIKELY)
• Will the response in the U.S. be the
same as in Europe?
• Probably (and hopefully) not
• Successful interactions between local
regulators and peer-to-peer platforms
• Uber-type apps in D.C.
• Getaround in Portland
• Free street parking in Denver
• Uber in Chicago
• Governor Wolf’s recent decisions
regarding Uber and Lyft in Philadelphia
REPORT FROM THE
FEDERAL TRADE
COMMISSION
• Discusses many of the consumer protection and
“unfair competition” questions raised by both
critics and proponents of the gig economy
• Not an authority, but will be extremely instructive to
regulators and companies
• Generally speaking, the Commission has taken
the position that regulators should adopt a
narrow focus so that they are only as restrictive
as is absolutely necessary
• Link to the report: https://www.ftc.gov/reports/sharing-
economy-issues-facing-platforms-participants-regulators-
federal-trade-commission
TAKEAWAY:
We must continue to monitor regulators’
interactions with industry-specific markets.
The more regulated the industry, the more
careful a company in that industry must be.
HIDDEN DANGER NO. 2:
WORKER
MISCLASSIFICAT
ION
Joshua Goren
Dylan Caplan
COMMON ON-DEMAND SERVICES
• Car services
• Housing accommodations
• Grocery delivery
• Food prep and delivery
• Home cleaning and handyman
services
• Personal assistant and concierge
services
• Dog-walking
• Laundry and dry-cleaning
services
• Giftwrap and delivery
• Flower delivery
CONSEQUENCES OF
MISCLASSIFICATION
• Back wages and overtime pay
• Employee benefits
• Disability payments and workers’
compensation
• Tax and insurance obligations
• Liquidated damages
• Civil monetary penalties
WHAT IS AN
“INDEPENDENT CONTRACTOR?”
• Provide services in exchange for compensation
• Works for multiple entities
• Independent contractors typically:
• Charge fees for service
• Engage only for the term required to perform an identified service or task
• Retain control over the method and manner of the work itself
• Retain economic independent
• Are responsible for paying income, social security and Medicare taxes
• NOT protected by most federal, state, or local laws designed to protect employees
ADVANTAGES OF HIRING
INDEPENDENT CONTRACTORS
Federal employment laws which cover employees, but do not
usually apply to independent contractors:
• Fair Labor Standards Act (FLSA)
• Title VII of the Civil Rights Act (Title
VII)
• Equal Pay Act (EPA)
• Age Discrimination in Employment
(ADEA)
• Americans with Disabilities (ADA)
• Genetic Information Nondiscrimination
Act (GINA)
• Uniformed Services Employment
Reemployment Rights Act (USERRA)
• Occupational Safety and Health Act
(OSHA)
• Worker Adjustment Retraining
Notification Act (WARN)
• Family and Medical Leave Act (FMLA)
• Employee Retirement Income Security
Act (ERISA)
• National Labor Relations Act (NLRA)
BENEFITS THAT DO NOT APPLY TO
INDEPENDENT CONTRACTORS
• Health, life, and disability insurance
• Retirement or pension plans
• Stock options
• Paid vacation and sick days
• Fringe benefits
• Taxes that Companies Avoid with Independent Contractors:
• Federal, state, and local income taxes (1099-MISC instead of W-2)
• Social Security and Medicare taxes (owed under Federal Insurance Contributions Act
(FICA))
• Insurance taxes under the Federal Unemployment Tax Act (FUTA)
• State unemployment insurance taxes
• Workers' compensation insurance
SPECIAL IRS CLASSIFICATIONS FOR
STATUTORY NONEMPLOYEES
•Direct sellers
•Licensed real estate
agents
•Companion sitters
AMBIGUOUS CLASSIFICATION
• On-Demand companies provide a means to maximize
underutilized resources
• The owners of those assets are the workers
• Uber drivers; AirBnB hosts
• Employment Concern: Take away the Assets and the
company no longer exists
GUARDS AGAINST MISCLASSIFICATION
• Motto: “Control the Result and Not the Means”
• Main Areas of Concerns:
• Control and Supervision
• Integration of Business
• Length of the Relationship
• Method of Payment
RESTRICTING ON-DEMAND
WORKERS
• Restrictive Covenants are enforceable at least to the extent that
restrictive covenants are enforceable against employees
• Ensure restrictive covenants are narrow and limited in time and
territory
• Misclassification may eliminate restrictive covenants
• Possible Solution: Enter into separate restrictive covenant agreements
• Possible Solution: Limit to narrowly tailored confidentiality and non-solicitation
agreements
PLAN FOR THE RISK
• There is no clear consensus on whether on-demand workers are
independent contractors or employees
• Refrain from controlling the means and focus on the result
• Adapt business models to anticipate different tiers of misclassification
concerns
• At-will termination may reign supreme to threat of misclassification
• Customer ratings systems may reign supreme to threat of misclassifications
TARGETS OF ENFORCEMENT AND
LITIGATION
• Construction
• Transportation and trucking
• Cable and internet companies
• Janitorial services
• Landscaping and nurseries
• Security Services
• Nursing
• Child care
• Home health care
• Restaurants and catering
services
• Staffing services
• Hotels and motels
• Oil and gas
MITIGATING THE RISKS OF
MISCLASSIFICATION
• Conduct an audit; Train personnel on classification issues; obtain a ruling from the
IRS; and Draft agreements that document the independent contractor distinctions
• Avoid using the word “control”
• Specifically place responsibility for taxes, insurance, business licenses and the like on
the Independent Contractor
• Require only compliance with industry standards when possible
• Specify that the IC determines the manner and means of the work and that the
Company is only interested in the final result
• Do not require progress reports
• Avoid payment by the hour, day or week, try to pay per project
• Avoid specifying hours of work, or where to work
MITIGATING THE RISKS (CONT.)
• FLSA Independent Contractor Test, Department of Labor’s
Interpretive Guidance, IRS Independent Contractor Test
• Include waivers of any right to participate in company benefits
• Specify the length of the contractual relationship instead of leaving it
open-ended
• Specify the IC’s can perform services for others; Avoid contract
provisions allowing for termination at will
• Specifically state that the independent contractor provides all
necessary tools, equipment and related items
• Do not require IC’s services to the company
MITIGATING THE RISKS:
RECORDKEEPING
REQUIREMENTS
• Parties’ written agreement, including expired and revised
agreements
• Independent contractor’s federal Employer Identification Number
(EIN or FEIN)
• Payments made
• Copies of 1099-MISC
• Contact information
• Documents that may evidence worker’s independent contractor
status
TAKEAWAY:
Always consider your level of
control and set narrow
restrictions.
HIDDEN DANGER NO. 3:
USER
DISSATISFACTION,
PROPERTY DAMAGE,
& PERSONAL
INJURYMark Hildebrand
VICARIOUS LIABILITY
• Worker classification matters!
• If the service provider is an employee, then the platform would
most likely be found liable for any contract breach, property
damage, or personal injury the service provider commits
• If the service provider is an independent contractor, then the
platform is much less likely to be found liable for the contract
breach, property damage, or personal injury which the service
provider commits
WAYS TO MITIGATE THESE RISKS
• Set Standards
• Example: Community Guidelines
• If violated, Service Provider may lose access to the platform
• Vet the Service Provider
• Example: Customer Rating System
• Reward quality Service Providers with prominence on the Platform
• However, do not outright terminate low-rated Service Providers
WAYS TO MITIGATE THESE RISKS:
TERMS OF SERVICE
AGREEMENTS
• Define the Platform as a Request Tool or a Connector of Service
Providers and Customers and not a party to any contracts between
the Service Provider and the Customer
• Define that the Service Providers are Independent Contractors
• Disclaim any liability for any misrepresentation of services, property
damage, or personal injury
• Require Service Providers and Users to indemnify and hold the
Platform harmless
• Require Service Providers and Customers to waive the right to sue
the Platform
WAYS TO MITIGATE THESE RISKS:
INSURANCE
• Rely on your service providers to
insure themselves
• Configure a hybrid insurance
coverage split between the
service provider and the
Platform
• Seek new On-Demand Economy
specific insurance policies
RELYING ON YOUR SERVICE
PROVIDERS TO INSURE THEMSELVES
• EXAMPLE:
• In 2008, Airbnb launched and did not provide insurance
coverage for their hosts
• Hosts relied on their personal homeowner insurance policy
• PROBLEMS:
• Insurance Gap
• Personal homeowner insurance policies do not cover damages
when the dwelling was used commercially
• Commercial version of the personal insurance policy was often
far too expensive for the Service Providers
SPLIT INSURANCE COVERAGE BETWEEN THE
SERVICE PROVIDER AND THE PLATFORM
• EXAMPLE:
• Initially, Uber relied on their Driver’s personal automobile
insurance policies to cover injury or damage occurring while the
Driver was waiting for a request and while the Driver drove to
pick up a passenger
• Uber’s insurance would cover while the Driver transported the
Customer to their destination
• SAME PROBLEMS:
• Insurance Gap
• Personal automobile insurance policies did not cover damages
when the vehicle was used commercially
RELYING ON YOUR SERVICE PROVIDERS TO
INSURE THEMSELVES
OR
SPLIT INSURANCE COVERAGE BETWEEN THE
SERVICE PROVIDER AND THE PLATFORM
• Litigation Expenses
• If the Service Provider cannot compensate a victim, then the
victim will likely bring the Platform into court
• Triggering State Regulators’ Attention
• Uncompensated Injuries or damage eventually trigger the
attention of State regulators
THE SOFIA LIU CASE
• December 31, 2013 (New Year’s Eve), San Francisco, California:
• Uber Driver killed Sofia Liu, a 6-year-old girl
• The driver’s personal insurance could not cover the damage and
injuries
• Uber denied that its insurance policy applied to this case and
would not compensate the victims
• The family sued the Driver and Uber….
• ...and almost immediately California began writing a new law
regulating the ride-sharing industry
• 26 other states followed California’s lead in regulating
this sector of the on-demand economy
SEEK THE ON-DEMAND ECONOMY-
SPECIFIC INSURANCE POLICIES
• THE FIRST: MetroMile
• ESTABLISHED INSURANCE COMPANIES:
• United States Auto Association
• Farmers Insurance Group
• GEICO
• AllState (HostAdvantage)
• Mercury
• State Farm
• USAA
• START-UPS: Slice Labs Inc.
TAKEAWAY:
Find an insurance broker
and get insured!
1. REGULATORS
• More Regulation in the Industry =
More Precautionary Measures
(And make sure to read the FTC Report!)
2. WORKER MISCLASSIFICATION
• Always consider your level of control and set
narrow restrictions
3. USER DISSATISFACTION,
PROPERTY DAMAGE, & PERSONAL
INJURY
• Find an Industry-Specific Broker and Get
Insured!
THE HIDDEN DANGERS IN REVIEW
QUESTION & ANSWER SESSION:
RANDAL S. WHITE
• Partner at Fox Rothschild LLP
• Practice areas include:
• Labor & employment
• Employment counseling, policy developments, & audits
• Employment litigation
• Employment training
• Wage & hour law
• Unfair competition & trade secrets
Please join us for
a reception in
the Third Floor
Gallery!
The slides from today’s presentation will also
be made available on SlideShare:
www.slideshare.net/DrexelELC

Mais conteúdo relacionado

Mais procurados

TapCab Presentation
TapCab PresentationTapCab Presentation
TapCab PresentationEric Dahl
 
BHPH July-August 2015 Front Page - and Page 17
BHPH July-August 2015 Front Page - and Page 17BHPH July-August 2015 Front Page - and Page 17
BHPH July-August 2015 Front Page - and Page 17Angelica Jeffreys
 
UBER: The Network Orchestrator, Understanding The Evolution Of A Revolution
UBER: The Network Orchestrator, Understanding The Evolution Of A RevolutionUBER: The Network Orchestrator, Understanding The Evolution Of A Revolution
UBER: The Network Orchestrator, Understanding The Evolution Of A RevolutionHani W. Naguib
 
Uber and didi chuxing merger threatens traditional taxis
Uber and didi chuxing merger threatens traditional taxisUber and didi chuxing merger threatens traditional taxis
Uber and didi chuxing merger threatens traditional taxisKyna Tsai
 
SF Weekly, December 2015, Uber suit
SF Weekly, December 2015, Uber suitSF Weekly, December 2015, Uber suit
SF Weekly, December 2015, Uber suitAdam Brinklow
 
RIGHT-OF-WAY CHARGING: How Cities Can Lead the Way by Forth
RIGHT-OF-WAY CHARGING: How Cities Can Lead the Way by ForthRIGHT-OF-WAY CHARGING: How Cities Can Lead the Way by Forth
RIGHT-OF-WAY CHARGING: How Cities Can Lead the Way by ForthForth
 
nepc conf presentation March 2014
nepc conf presentation March 2014nepc conf presentation March 2014
nepc conf presentation March 2014Kathryn Hebert
 
10 Step Marketing Plan - UBER
10 Step Marketing Plan - UBER10 Step Marketing Plan - UBER
10 Step Marketing Plan - UBERKEN5JK
 
Uber presentation final
Uber presentation finalUber presentation final
Uber presentation finalSkylar Dann
 
15 October 2009 Automotive Accountants' Forum
15 October 2009 Automotive Accountants' Forum15 October 2009 Automotive Accountants' Forum
15 October 2009 Automotive Accountants' ForumColledges
 
International Remittance And Mobile Banking
International Remittance And Mobile BankingInternational Remittance And Mobile Banking
International Remittance And Mobile BankingArief Gunawan
 
Special Presentation - Christopher Ballard of UBER Southern California
Special Presentation - Christopher Ballard of UBER Southern CaliforniaSpecial Presentation - Christopher Ballard of UBER Southern California
Special Presentation - Christopher Ballard of UBER Southern CaliforniaRyan Slack
 
Uber's Rapid Growth with Innovative Strategy
Uber's Rapid Growth with Innovative Strategy Uber's Rapid Growth with Innovative Strategy
Uber's Rapid Growth with Innovative Strategy Mubeena Soomro
 
A Survey of Startups Shaping the Future of Accounting
A Survey of Startups Shaping the Future of AccountingA Survey of Startups Shaping the Future of Accounting
A Survey of Startups Shaping the Future of AccountingParaşüt
 
Business model of Lyft ("Make a new friend everyday")
Business model of Lyft ("Make a new friend everyday")Business model of Lyft ("Make a new friend everyday")
Business model of Lyft ("Make a new friend everyday")SUBHADEEP DASGUPTA
 
Contagious Case study
Contagious Case studyContagious Case study
Contagious Case studyGaurav Singh
 

Mais procurados (20)

TapCab Presentation
TapCab PresentationTapCab Presentation
TapCab Presentation
 
BHPH July-August 2015 Front Page - and Page 17
BHPH July-August 2015 Front Page - and Page 17BHPH July-August 2015 Front Page - and Page 17
BHPH July-August 2015 Front Page - and Page 17
 
UBER: The Network Orchestrator, Understanding The Evolution Of A Revolution
UBER: The Network Orchestrator, Understanding The Evolution Of A RevolutionUBER: The Network Orchestrator, Understanding The Evolution Of A Revolution
UBER: The Network Orchestrator, Understanding The Evolution Of A Revolution
 
Uber and didi chuxing merger threatens traditional taxis
Uber and didi chuxing merger threatens traditional taxisUber and didi chuxing merger threatens traditional taxis
Uber and didi chuxing merger threatens traditional taxis
 
SF Weekly, December 2015, Uber suit
SF Weekly, December 2015, Uber suitSF Weekly, December 2015, Uber suit
SF Weekly, December 2015, Uber suit
 
RIGHT-OF-WAY CHARGING: How Cities Can Lead the Way by Forth
RIGHT-OF-WAY CHARGING: How Cities Can Lead the Way by ForthRIGHT-OF-WAY CHARGING: How Cities Can Lead the Way by Forth
RIGHT-OF-WAY CHARGING: How Cities Can Lead the Way by Forth
 
nepc conf presentation March 2014
nepc conf presentation March 2014nepc conf presentation March 2014
nepc conf presentation March 2014
 
By_Popular_Demand
By_Popular_DemandBy_Popular_Demand
By_Popular_Demand
 
10 Step Marketing Plan - UBER
10 Step Marketing Plan - UBER10 Step Marketing Plan - UBER
10 Step Marketing Plan - UBER
 
Uber presentation final
Uber presentation finalUber presentation final
Uber presentation final
 
15 October 2009 Automotive Accountants' Forum
15 October 2009 Automotive Accountants' Forum15 October 2009 Automotive Accountants' Forum
15 October 2009 Automotive Accountants' Forum
 
International Remittance And Mobile Banking
International Remittance And Mobile BankingInternational Remittance And Mobile Banking
International Remittance And Mobile Banking
 
Special Presentation - Christopher Ballard of UBER Southern California
Special Presentation - Christopher Ballard of UBER Southern CaliforniaSpecial Presentation - Christopher Ballard of UBER Southern California
Special Presentation - Christopher Ballard of UBER Southern California
 
Uber's Rapid Growth with Innovative Strategy
Uber's Rapid Growth with Innovative Strategy Uber's Rapid Growth with Innovative Strategy
Uber's Rapid Growth with Innovative Strategy
 
UBER
UBERUBER
UBER
 
Uber PR Campaign 2014
Uber PR Campaign 2014Uber PR Campaign 2014
Uber PR Campaign 2014
 
A Survey of Startups Shaping the Future of Accounting
A Survey of Startups Shaping the Future of AccountingA Survey of Startups Shaping the Future of Accounting
A Survey of Startups Shaping the Future of Accounting
 
Business model of Lyft ("Make a new friend everyday")
Business model of Lyft ("Make a new friend everyday")Business model of Lyft ("Make a new friend everyday")
Business model of Lyft ("Make a new friend everyday")
 
Contagious Case study
Contagious Case studyContagious Case study
Contagious Case study
 
One tap
One tapOne tap
One tap
 

Destaque

Dispatches From The New Economy: The Five Faces Of The On-Demand Economy
Dispatches From The New Economy: The Five Faces Of The On-Demand EconomyDispatches From The New Economy: The Five Faces Of The On-Demand Economy
Dispatches From The New Economy: The Five Faces Of The On-Demand EconomyIntuit Inc.
 
The On-Demand Economy and the Local Retailer (The Running Event 12/1/15)
The On-Demand Economy and the Local Retailer (The Running Event 12/1/15)The On-Demand Economy and the Local Retailer (The Running Event 12/1/15)
The On-Demand Economy and the Local Retailer (The Running Event 12/1/15)Mark Strella
 
The Local On Demand Economy. Who's making money in local? Where's the money...
The Local On Demand Economy.  Who's making money in local?  Where's the money...The Local On Demand Economy.  Who's making money in local?  Where's the money...
The Local On Demand Economy. Who's making money in local? Where's the money...Simon Greenman
 
Funding Hardware Startups
Funding Hardware StartupsFunding Hardware Startups
Funding Hardware StartupsSteve Schlafman
 
The On-Demand Economy Survey
The On-Demand Economy SurveyThe On-Demand Economy Survey
The On-Demand Economy SurveyBurson-Marsteller
 
Jana: Case Study Presentation
Jana: Case Study PresentationJana: Case Study Presentation
Jana: Case Study PresentationIvan Orbegozo
 
Stickybits & altoids (12.1.10)
Stickybits & altoids (12.1.10)Stickybits & altoids (12.1.10)
Stickybits & altoids (12.1.10)Steve Schlafman
 
Why spending money on ads if you can hack the system?
Why spending money on ads if you can hack the system?Why spending money on ads if you can hack the system?
Why spending money on ads if you can hack the system?KOOACH
 
Stickybits + Altoids Case Study Dec 2010
Stickybits + Altoids Case Study Dec 2010Stickybits + Altoids Case Study Dec 2010
Stickybits + Altoids Case Study Dec 2010Steve Schlafman
 
Tools to hack a businessmodel
Tools to hack a businessmodelTools to hack a businessmodel
Tools to hack a businessmodelKOOACH
 
20 new ways to unlock revenue
20 new ways to unlock revenue20 new ways to unlock revenue
20 new ways to unlock revenueKOOACH
 
Growth Hacking using behavioral economics
Growth Hacking using behavioral economicsGrowth Hacking using behavioral economics
Growth Hacking using behavioral economicsKOOACH
 
Guerrilla User and Design Research
Guerrilla User and Design ResearchGuerrilla User and Design Research
Guerrilla User and Design ResearchRuth Ellison
 
I'm the butcher would you like some BeEF
I'm the butcher would you like some BeEFI'm the butcher would you like some BeEF
I'm the butcher would you like some BeEFMichele Orru
 
Raising a Seed Round from Lerer Ventures
Raising a Seed Round from Lerer VenturesRaising a Seed Round from Lerer Ventures
Raising a Seed Round from Lerer VenturesSteve Schlafman
 
Jornal Expressão Julho2011
Jornal Expressão Julho2011Jornal Expressão Julho2011
Jornal Expressão Julho2011Bernadetecebs .
 
79307422 2-wettability-literature-survey-part-1
79307422 2-wettability-literature-survey-part-179307422 2-wettability-literature-survey-part-1
79307422 2-wettability-literature-survey-part-1Jonatan Sierra
 
Marina Mayoral
Marina MayoralMarina Mayoral
Marina Mayoralmmuntane
 
"What's Happening in the Markets: The Real Data" at SaaStr Annual 2016
"What's Happening in the Markets: The Real Data" at SaaStr Annual 2016"What's Happening in the Markets: The Real Data" at SaaStr Annual 2016
"What's Happening in the Markets: The Real Data" at SaaStr Annual 2016saastr
 

Destaque (20)

Dispatches From The New Economy: The Five Faces Of The On-Demand Economy
Dispatches From The New Economy: The Five Faces Of The On-Demand EconomyDispatches From The New Economy: The Five Faces Of The On-Demand Economy
Dispatches From The New Economy: The Five Faces Of The On-Demand Economy
 
The On-Demand Economy and the Local Retailer (The Running Event 12/1/15)
The On-Demand Economy and the Local Retailer (The Running Event 12/1/15)The On-Demand Economy and the Local Retailer (The Running Event 12/1/15)
The On-Demand Economy and the Local Retailer (The Running Event 12/1/15)
 
The Local On Demand Economy. Who's making money in local? Where's the money...
The Local On Demand Economy.  Who's making money in local?  Where's the money...The Local On Demand Economy.  Who's making money in local?  Where's the money...
The Local On Demand Economy. Who's making money in local? Where's the money...
 
Funding Hardware Startups
Funding Hardware StartupsFunding Hardware Startups
Funding Hardware Startups
 
The On-Demand Economy Survey
The On-Demand Economy SurveyThe On-Demand Economy Survey
The On-Demand Economy Survey
 
Jana: Case Study Presentation
Jana: Case Study PresentationJana: Case Study Presentation
Jana: Case Study Presentation
 
Stickybits & altoids (12.1.10)
Stickybits & altoids (12.1.10)Stickybits & altoids (12.1.10)
Stickybits & altoids (12.1.10)
 
Why spending money on ads if you can hack the system?
Why spending money on ads if you can hack the system?Why spending money on ads if you can hack the system?
Why spending money on ads if you can hack the system?
 
Stickybits + Altoids Case Study Dec 2010
Stickybits + Altoids Case Study Dec 2010Stickybits + Altoids Case Study Dec 2010
Stickybits + Altoids Case Study Dec 2010
 
Tools to hack a businessmodel
Tools to hack a businessmodelTools to hack a businessmodel
Tools to hack a businessmodel
 
20 new ways to unlock revenue
20 new ways to unlock revenue20 new ways to unlock revenue
20 new ways to unlock revenue
 
Founders' conflict
Founders' conflictFounders' conflict
Founders' conflict
 
Growth Hacking using behavioral economics
Growth Hacking using behavioral economicsGrowth Hacking using behavioral economics
Growth Hacking using behavioral economics
 
Guerrilla User and Design Research
Guerrilla User and Design ResearchGuerrilla User and Design Research
Guerrilla User and Design Research
 
I'm the butcher would you like some BeEF
I'm the butcher would you like some BeEFI'm the butcher would you like some BeEF
I'm the butcher would you like some BeEF
 
Raising a Seed Round from Lerer Ventures
Raising a Seed Round from Lerer VenturesRaising a Seed Round from Lerer Ventures
Raising a Seed Round from Lerer Ventures
 
Jornal Expressão Julho2011
Jornal Expressão Julho2011Jornal Expressão Julho2011
Jornal Expressão Julho2011
 
79307422 2-wettability-literature-survey-part-1
79307422 2-wettability-literature-survey-part-179307422 2-wettability-literature-survey-part-1
79307422 2-wettability-literature-survey-part-1
 
Marina Mayoral
Marina MayoralMarina Mayoral
Marina Mayoral
 
"What's Happening in the Markets: The Real Data" at SaaStr Annual 2016
"What's Happening in the Markets: The Real Data" at SaaStr Annual 2016"What's Happening in the Markets: The Real Data" at SaaStr Annual 2016
"What's Happening in the Markets: The Real Data" at SaaStr Annual 2016
 

Semelhante a The On-Demand Economy

FULL SLIDES 2016: The Current & Future State of Independent Contractor Compli...
FULL SLIDES 2016: The Current & Future State of Independent Contractor Compli...FULL SLIDES 2016: The Current & Future State of Independent Contractor Compli...
FULL SLIDES 2016: The Current & Future State of Independent Contractor Compli...Populus Group
 
Tax Issues in App Development
Tax Issues in App DevelopmentTax Issues in App Development
Tax Issues in App DevelopmentRoger Royse
 
Connecticut Automotive Retailers Association 2016 Dealer Symposium
Connecticut Automotive Retailers Association 2016 Dealer SymposiumConnecticut Automotive Retailers Association 2016 Dealer Symposium
Connecticut Automotive Retailers Association 2016 Dealer SymposiumJim Radogna
 
Which Gov't Agencies are Targeting Auto Dealers… and How to Reduce Your Exposure
Which Gov't Agencies are Targeting Auto Dealers… and How to Reduce Your ExposureWhich Gov't Agencies are Targeting Auto Dealers… and How to Reduce Your Exposure
Which Gov't Agencies are Targeting Auto Dealers… and How to Reduce Your ExposureJim Radogna
 
Unfair and Deceptive Acts and Practices Enforcement: Is your Facility at Risk?
Unfair and Deceptive Acts and Practices Enforcement: Is your Facility at Risk?Unfair and Deceptive Acts and Practices Enforcement: Is your Facility at Risk?
Unfair and Deceptive Acts and Practices Enforcement: Is your Facility at Risk?Jim Radogna
 
Unfair and Deceptive Acts & Practices Seminar - Chicago Automobile Trade Asso...
Unfair and Deceptive Acts & Practices Seminar - Chicago Automobile Trade Asso...Unfair and Deceptive Acts & Practices Seminar - Chicago Automobile Trade Asso...
Unfair and Deceptive Acts & Practices Seminar - Chicago Automobile Trade Asso...Jim Radogna
 
The Future Workforce: The Gig Economy and the Challenges of a Contingent Work...
The Future Workforce: The Gig Economy and the Challenges of a Contingent Work...The Future Workforce: The Gig Economy and the Challenges of a Contingent Work...
The Future Workforce: The Gig Economy and the Challenges of a Contingent Work...EPAY Systems
 
Employment Law Issues for the Gig Economy
Employment Law Issues for the Gig EconomyEmployment Law Issues for the Gig Economy
Employment Law Issues for the Gig EconomyRoger Royse
 
Emploment law issues for the gig economy
Emploment law issues for the gig economyEmploment law issues for the gig economy
Emploment law issues for the gig economyRoger Royse
 
AutoCon2012 Workshop - Dealer Compliance in a Digital Age - with Jim Radogna
AutoCon2012 Workshop - Dealer Compliance in a Digital Age - with Jim RadognaAutoCon2012 Workshop - Dealer Compliance in a Digital Age - with Jim Radogna
AutoCon2012 Workshop - Dealer Compliance in a Digital Age - with Jim RadognaJim Radogna
 
2016: The Current & Future State of Independent Contractor Compliance & Usage
2016: The Current & Future State of Independent Contractor Compliance & Usage2016: The Current & Future State of Independent Contractor Compliance & Usage
2016: The Current & Future State of Independent Contractor Compliance & UsagePopulus Group
 
LEGAL REGULATORY ISSUES IN E- COMMERCE.pptx
LEGAL REGULATORY ISSUES IN E- COMMERCE.pptxLEGAL REGULATORY ISSUES IN E- COMMERCE.pptx
LEGAL REGULATORY ISSUES IN E- COMMERCE.pptxMunazza64
 
Update tourism industry knowledge part 3
Update tourism industry knowledge part 3Update tourism industry knowledge part 3
Update tourism industry knowledge part 3Dedy Wijayanto
 
LexisNexis Digital Library ALM Content Available
LexisNexis Digital Library ALM Content AvailableLexisNexis Digital Library ALM Content Available
LexisNexis Digital Library ALM Content AvailableLexisNexis
 
Develop & update tourism industry knowledge 3-4-2020
Develop & update tourism industry knowledge 3-4-2020Develop & update tourism industry knowledge 3-4-2020
Develop & update tourism industry knowledge 3-4-2020Dedy Wijayanto
 
The Legal Implications of Web Accessibility. FMJ Law + ArcStone
The Legal Implications of Web Accessibility. FMJ Law + ArcStoneThe Legal Implications of Web Accessibility. FMJ Law + ArcStone
The Legal Implications of Web Accessibility. FMJ Law + ArcStoneJenna Christensen
 
Browne Jacobson HR for Education 2017 - Workshop 2B - Employment law masterclass
Browne Jacobson HR for Education 2017 - Workshop 2B - Employment law masterclassBrowne Jacobson HR for Education 2017 - Workshop 2B - Employment law masterclass
Browne Jacobson HR for Education 2017 - Workshop 2B - Employment law masterclassBrowne Jacobson LLP
 
"Operating Under an Independent or Employee Driver Model"
"Operating Under an Independent or Employee Driver Model""Operating Under an Independent or Employee Driver Model"
"Operating Under an Independent or Employee Driver Model"Tisha Keller
 

Semelhante a The On-Demand Economy (20)

FULL SLIDES 2016: The Current & Future State of Independent Contractor Compli...
FULL SLIDES 2016: The Current & Future State of Independent Contractor Compli...FULL SLIDES 2016: The Current & Future State of Independent Contractor Compli...
FULL SLIDES 2016: The Current & Future State of Independent Contractor Compli...
 
Tax Issues in App Development
Tax Issues in App DevelopmentTax Issues in App Development
Tax Issues in App Development
 
Connecticut Automotive Retailers Association 2016 Dealer Symposium
Connecticut Automotive Retailers Association 2016 Dealer SymposiumConnecticut Automotive Retailers Association 2016 Dealer Symposium
Connecticut Automotive Retailers Association 2016 Dealer Symposium
 
Which Gov't Agencies are Targeting Auto Dealers… and How to Reduce Your Exposure
Which Gov't Agencies are Targeting Auto Dealers… and How to Reduce Your ExposureWhich Gov't Agencies are Targeting Auto Dealers… and How to Reduce Your Exposure
Which Gov't Agencies are Targeting Auto Dealers… and How to Reduce Your Exposure
 
Unfair and Deceptive Acts and Practices Enforcement: Is your Facility at Risk?
Unfair and Deceptive Acts and Practices Enforcement: Is your Facility at Risk?Unfair and Deceptive Acts and Practices Enforcement: Is your Facility at Risk?
Unfair and Deceptive Acts and Practices Enforcement: Is your Facility at Risk?
 
Servmarkchpter2
Servmarkchpter2Servmarkchpter2
Servmarkchpter2
 
Unfair and Deceptive Acts & Practices Seminar - Chicago Automobile Trade Asso...
Unfair and Deceptive Acts & Practices Seminar - Chicago Automobile Trade Asso...Unfair and Deceptive Acts & Practices Seminar - Chicago Automobile Trade Asso...
Unfair and Deceptive Acts & Practices Seminar - Chicago Automobile Trade Asso...
 
The Future Workforce: The Gig Economy and the Challenges of a Contingent Work...
The Future Workforce: The Gig Economy and the Challenges of a Contingent Work...The Future Workforce: The Gig Economy and the Challenges of a Contingent Work...
The Future Workforce: The Gig Economy and the Challenges of a Contingent Work...
 
Employment Law Issues for the Gig Economy
Employment Law Issues for the Gig EconomyEmployment Law Issues for the Gig Economy
Employment Law Issues for the Gig Economy
 
Emploment law issues for the gig economy
Emploment law issues for the gig economyEmploment law issues for the gig economy
Emploment law issues for the gig economy
 
Insurance Markets
Insurance MarketsInsurance Markets
Insurance Markets
 
AutoCon2012 Workshop - Dealer Compliance in a Digital Age - with Jim Radogna
AutoCon2012 Workshop - Dealer Compliance in a Digital Age - with Jim RadognaAutoCon2012 Workshop - Dealer Compliance in a Digital Age - with Jim Radogna
AutoCon2012 Workshop - Dealer Compliance in a Digital Age - with Jim Radogna
 
2016: The Current & Future State of Independent Contractor Compliance & Usage
2016: The Current & Future State of Independent Contractor Compliance & Usage2016: The Current & Future State of Independent Contractor Compliance & Usage
2016: The Current & Future State of Independent Contractor Compliance & Usage
 
LEGAL REGULATORY ISSUES IN E- COMMERCE.pptx
LEGAL REGULATORY ISSUES IN E- COMMERCE.pptxLEGAL REGULATORY ISSUES IN E- COMMERCE.pptx
LEGAL REGULATORY ISSUES IN E- COMMERCE.pptx
 
Update tourism industry knowledge part 3
Update tourism industry knowledge part 3Update tourism industry knowledge part 3
Update tourism industry knowledge part 3
 
LexisNexis Digital Library ALM Content Available
LexisNexis Digital Library ALM Content AvailableLexisNexis Digital Library ALM Content Available
LexisNexis Digital Library ALM Content Available
 
Develop & update tourism industry knowledge 3-4-2020
Develop & update tourism industry knowledge 3-4-2020Develop & update tourism industry knowledge 3-4-2020
Develop & update tourism industry knowledge 3-4-2020
 
The Legal Implications of Web Accessibility. FMJ Law + ArcStone
The Legal Implications of Web Accessibility. FMJ Law + ArcStoneThe Legal Implications of Web Accessibility. FMJ Law + ArcStone
The Legal Implications of Web Accessibility. FMJ Law + ArcStone
 
Browne Jacobson HR for Education 2017 - Workshop 2B - Employment law masterclass
Browne Jacobson HR for Education 2017 - Workshop 2B - Employment law masterclassBrowne Jacobson HR for Education 2017 - Workshop 2B - Employment law masterclass
Browne Jacobson HR for Education 2017 - Workshop 2B - Employment law masterclass
 
"Operating Under an Independent or Employee Driver Model"
"Operating Under an Independent or Employee Driver Model""Operating Under an Independent or Employee Driver Model"
"Operating Under an Independent or Employee Driver Model"
 

Mais de DrexelELC

Swipe Right to Issue Equity
Swipe Right to Issue EquitySwipe Right to Issue Equity
Swipe Right to Issue EquityDrexelELC
 
Open source software licenses
Open source software licensesOpen source software licenses
Open source software licensesDrexelELC
 
Prepare Your Startup For Funding: Equity and Cap Tables
Prepare Your Startup For Funding: Equity and Cap TablesPrepare Your Startup For Funding: Equity and Cap Tables
Prepare Your Startup For Funding: Equity and Cap TablesDrexelELC
 
Equity Compensation for Startups
Equity Compensation for StartupsEquity Compensation for Startups
Equity Compensation for StartupsDrexelELC
 
Protect Privacy to Protect Your Startup
Protect Privacy to Protect Your StartupProtect Privacy to Protect Your Startup
Protect Privacy to Protect Your StartupDrexelELC
 
Hackers code of collaboration
Hackers code of collaborationHackers code of collaboration
Hackers code of collaborationDrexelELC
 
Business formation basics
Business formation basicsBusiness formation basics
Business formation basicsDrexelELC
 
Interns, Consultants and Employees
Interns, Consultants and EmployeesInterns, Consultants and Employees
Interns, Consultants and EmployeesDrexelELC
 
Elc, prenup presentation, 04202013
Elc, prenup presentation, 04202013Elc, prenup presentation, 04202013
Elc, prenup presentation, 04202013DrexelELC
 

Mais de DrexelELC (9)

Swipe Right to Issue Equity
Swipe Right to Issue EquitySwipe Right to Issue Equity
Swipe Right to Issue Equity
 
Open source software licenses
Open source software licensesOpen source software licenses
Open source software licenses
 
Prepare Your Startup For Funding: Equity and Cap Tables
Prepare Your Startup For Funding: Equity and Cap TablesPrepare Your Startup For Funding: Equity and Cap Tables
Prepare Your Startup For Funding: Equity and Cap Tables
 
Equity Compensation for Startups
Equity Compensation for StartupsEquity Compensation for Startups
Equity Compensation for Startups
 
Protect Privacy to Protect Your Startup
Protect Privacy to Protect Your StartupProtect Privacy to Protect Your Startup
Protect Privacy to Protect Your Startup
 
Hackers code of collaboration
Hackers code of collaborationHackers code of collaboration
Hackers code of collaboration
 
Business formation basics
Business formation basicsBusiness formation basics
Business formation basics
 
Interns, Consultants and Employees
Interns, Consultants and EmployeesInterns, Consultants and Employees
Interns, Consultants and Employees
 
Elc, prenup presentation, 04202013
Elc, prenup presentation, 04202013Elc, prenup presentation, 04202013
Elc, prenup presentation, 04202013
 

Último

Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...
Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...
Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...SHRADDHA PANDIT
 
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...Dr. Oliver Massmann
 
Classification of Contracts in Business Regulations
Classification of Contracts in Business RegulationsClassification of Contracts in Business Regulations
Classification of Contracts in Business RegulationsSyedaAyeshaTabassum1
 
The Ultimate Guide to Drafting Your Separation Agreement with a Template
The Ultimate Guide to Drafting Your Separation Agreement with a TemplateThe Ultimate Guide to Drafting Your Separation Agreement with a Template
The Ultimate Guide to Drafting Your Separation Agreement with a TemplateBTL Law P.C.
 
xLran: Open source AI for legal hackers.
xLran: Open source AI for legal hackers.xLran: Open source AI for legal hackers.
xLran: Open source AI for legal hackers.mike689707
 
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...Anadi Tewari
 
Patents and AI: Current Tools, Future Solutions
Patents and AI: Current Tools, Future SolutionsPatents and AI: Current Tools, Future Solutions
Patents and AI: Current Tools, Future SolutionsAurora Consulting
 
An introduction to Indian Contract Act, 1872 by Shraddha Pandit
An introduction to Indian Contract Act, 1872 by Shraddha PanditAn introduction to Indian Contract Act, 1872 by Shraddha Pandit
An introduction to Indian Contract Act, 1872 by Shraddha PanditSHRADDHA PANDIT
 
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdf
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdfIslamabad High Court Judges wrote a letter to Supreme Judicial Council.pdf
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdfNo One
 

Último (10)

Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...
Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...
Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...
 
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...
 
Classification of Contracts in Business Regulations
Classification of Contracts in Business RegulationsClassification of Contracts in Business Regulations
Classification of Contracts in Business Regulations
 
The Ultimate Guide to Drafting Your Separation Agreement with a Template
The Ultimate Guide to Drafting Your Separation Agreement with a TemplateThe Ultimate Guide to Drafting Your Separation Agreement with a Template
The Ultimate Guide to Drafting Your Separation Agreement with a Template
 
xLran: Open source AI for legal hackers.
xLran: Open source AI for legal hackers.xLran: Open source AI for legal hackers.
xLran: Open source AI for legal hackers.
 
Criminalizing Disabilities & False Confessions
Criminalizing Disabilities & False ConfessionsCriminalizing Disabilities & False Confessions
Criminalizing Disabilities & False Confessions
 
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...
 
Patents and AI: Current Tools, Future Solutions
Patents and AI: Current Tools, Future SolutionsPatents and AI: Current Tools, Future Solutions
Patents and AI: Current Tools, Future Solutions
 
An introduction to Indian Contract Act, 1872 by Shraddha Pandit
An introduction to Indian Contract Act, 1872 by Shraddha PanditAn introduction to Indian Contract Act, 1872 by Shraddha Pandit
An introduction to Indian Contract Act, 1872 by Shraddha Pandit
 
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdf
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdfIslamabad High Court Judges wrote a letter to Supreme Judicial Council.pdf
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdf
 

The On-Demand Economy

  • 1. THE ON-DEMAND ECONOMY: HIDDEN DANGERS OF “UBERIZING” YOUR BUSINESS MODEL Presented by the Entrepreneurial Law Clinic of Thomas R. Kline School of Law, Drexel University Student Lawyers: Joshua Goren Dylan Caplan Mark Hildebrand Michelle Paznokas Clinic Director: Steven Rosard Featuring: Randal White, Fox Rothschild LLP
  • 2. WHAT IS THE ON-DEMAND ECONOMY? Platform (form of communication) Supply (drivers, short-term rentals, etc.) Demand (customers MUTUAL NEED PRODUCTS CUSTOMER DATA CUSTOMER DATA PRODUCT AWARENESS
  • 3. “HIDDEN DANGERS” 1. Regulators 2. Worker Misclassification 3. User Dissatisfaction, Property Damage, & Personal Injury
  • 4. HIDDEN DANGER NO. 1: REGULATORS Michelle Paznokas
  • 5. UNDERSTANDING THE TENSION • Sharing platforms defy traditional notions about the way civic resources should be used • Example: Using a house as a home, not a hotel room • Professionalized and regulated incumbents allege unfair competitive advantage • Example: Taxi coalitions versus Uber • “Local governmental powers are at their strongest when regulating property markets through zoning powers, regulating hotel and restaurant markets with tools like taxes and safety inspections, and regulating transportation through direct oversight and city-provided services”
  • 6. THE HEAVY HITTERS’ GAME PLAN • Step 1: Develop a customer base before obtaining regulatory approval (create “facts on the ground”) • Step 2: Claim that the company is not a service provider, but merely connects third-parties to one another • Shifts the regulators’ focus to individual independent contractors • Step 3: Utilize a loyal consumer base to influence politicians and regulators • This is not a viable game plan for every company
  • 7. LICENSES & PERMITS • Do companies in the sharing economy require the same permits and/or licenses as traditional operators? • Who is liable for not getting a license (i.e., the platform, or the worker)? • How can a platform mitigate that liability?
  • 8. LICENSES & PERMITS: HIGHLY REGULATED MARKETS • The question of whether on-demand companies need the same licenses and/or permits as traditional operators is, unfortunately, largely unanswered • Based on recent examples, the expectation fluctuates based on the then-current government involvement in the specific industry • Highly regulated industries, like transportation and lodging, as opposed to industries traditionally reserved for independent contractors (e.g., TaskRabbit and “handymen”) • Example: High barriers to the NYC taxi market
  • 9. LICENSES & PERMITS: BURDEN OF RESPONSIBILITY • Common sense and current regulatory trends dictate that the worker is responsible for obtaining license
  • 10. LICENSES & PERMITS: BURDEN OF RESPONSIBILITY • Companies may be held liable for failing to encourage and/or require proper licensing and permits • “Connectors of people” argument • The company is not the service provider, thus does not need a license
  • 11. TAXING SHARING ECONOMY TRANSACTIONS • How should (or could) sharing economy transactions be taxed? • Burden to adhere to applicable taxes often falls on the worker • If the worker fails to pay, the company may have to instead • Sharing economy companies often “strike deals” with local governments to remit taxes • Should these companies pay specialty taxes (e.g., hotel occupancy taxes) and/or federal income tax? • Like all legal questions… “it depends”
  • 12. PREDICTING THE FUTURE REGULATORY LANDSCAPE • Retrofitting old regulations • Local/state governments have been revamping old regulations (e.g., “cottage food laws” and “bed and breakfast” classifications) to account for the emerging sharing economy • Creating new regulations • Some localities have been writing completely original laws targeted at the on-demand economy • Example: “Transportation Network Companies” in California and Colorado
  • 13. A BRIGHT FUTURE (MOST LIKELY) • Will the response in the U.S. be the same as in Europe? • Probably (and hopefully) not • Successful interactions between local regulators and peer-to-peer platforms • Uber-type apps in D.C. • Getaround in Portland • Free street parking in Denver • Uber in Chicago • Governor Wolf’s recent decisions regarding Uber and Lyft in Philadelphia
  • 14. REPORT FROM THE FEDERAL TRADE COMMISSION • Discusses many of the consumer protection and “unfair competition” questions raised by both critics and proponents of the gig economy • Not an authority, but will be extremely instructive to regulators and companies • Generally speaking, the Commission has taken the position that regulators should adopt a narrow focus so that they are only as restrictive as is absolutely necessary • Link to the report: https://www.ftc.gov/reports/sharing- economy-issues-facing-platforms-participants-regulators- federal-trade-commission
  • 15. TAKEAWAY: We must continue to monitor regulators’ interactions with industry-specific markets. The more regulated the industry, the more careful a company in that industry must be.
  • 16. HIDDEN DANGER NO. 2: WORKER MISCLASSIFICAT ION Joshua Goren Dylan Caplan
  • 17. COMMON ON-DEMAND SERVICES • Car services • Housing accommodations • Grocery delivery • Food prep and delivery • Home cleaning and handyman services • Personal assistant and concierge services • Dog-walking • Laundry and dry-cleaning services • Giftwrap and delivery • Flower delivery
  • 18. CONSEQUENCES OF MISCLASSIFICATION • Back wages and overtime pay • Employee benefits • Disability payments and workers’ compensation • Tax and insurance obligations • Liquidated damages • Civil monetary penalties
  • 19. WHAT IS AN “INDEPENDENT CONTRACTOR?” • Provide services in exchange for compensation • Works for multiple entities • Independent contractors typically: • Charge fees for service • Engage only for the term required to perform an identified service or task • Retain control over the method and manner of the work itself • Retain economic independent • Are responsible for paying income, social security and Medicare taxes • NOT protected by most federal, state, or local laws designed to protect employees
  • 20. ADVANTAGES OF HIRING INDEPENDENT CONTRACTORS Federal employment laws which cover employees, but do not usually apply to independent contractors: • Fair Labor Standards Act (FLSA) • Title VII of the Civil Rights Act (Title VII) • Equal Pay Act (EPA) • Age Discrimination in Employment (ADEA) • Americans with Disabilities (ADA) • Genetic Information Nondiscrimination Act (GINA) • Uniformed Services Employment Reemployment Rights Act (USERRA) • Occupational Safety and Health Act (OSHA) • Worker Adjustment Retraining Notification Act (WARN) • Family and Medical Leave Act (FMLA) • Employee Retirement Income Security Act (ERISA) • National Labor Relations Act (NLRA)
  • 21. BENEFITS THAT DO NOT APPLY TO INDEPENDENT CONTRACTORS • Health, life, and disability insurance • Retirement or pension plans • Stock options • Paid vacation and sick days • Fringe benefits • Taxes that Companies Avoid with Independent Contractors: • Federal, state, and local income taxes (1099-MISC instead of W-2) • Social Security and Medicare taxes (owed under Federal Insurance Contributions Act (FICA)) • Insurance taxes under the Federal Unemployment Tax Act (FUTA) • State unemployment insurance taxes • Workers' compensation insurance
  • 22. SPECIAL IRS CLASSIFICATIONS FOR STATUTORY NONEMPLOYEES •Direct sellers •Licensed real estate agents •Companion sitters
  • 23. AMBIGUOUS CLASSIFICATION • On-Demand companies provide a means to maximize underutilized resources • The owners of those assets are the workers • Uber drivers; AirBnB hosts • Employment Concern: Take away the Assets and the company no longer exists
  • 24. GUARDS AGAINST MISCLASSIFICATION • Motto: “Control the Result and Not the Means” • Main Areas of Concerns: • Control and Supervision • Integration of Business • Length of the Relationship • Method of Payment
  • 25. RESTRICTING ON-DEMAND WORKERS • Restrictive Covenants are enforceable at least to the extent that restrictive covenants are enforceable against employees • Ensure restrictive covenants are narrow and limited in time and territory • Misclassification may eliminate restrictive covenants • Possible Solution: Enter into separate restrictive covenant agreements • Possible Solution: Limit to narrowly tailored confidentiality and non-solicitation agreements
  • 26. PLAN FOR THE RISK • There is no clear consensus on whether on-demand workers are independent contractors or employees • Refrain from controlling the means and focus on the result • Adapt business models to anticipate different tiers of misclassification concerns • At-will termination may reign supreme to threat of misclassification • Customer ratings systems may reign supreme to threat of misclassifications
  • 27. TARGETS OF ENFORCEMENT AND LITIGATION • Construction • Transportation and trucking • Cable and internet companies • Janitorial services • Landscaping and nurseries • Security Services • Nursing • Child care • Home health care • Restaurants and catering services • Staffing services • Hotels and motels • Oil and gas
  • 28. MITIGATING THE RISKS OF MISCLASSIFICATION • Conduct an audit; Train personnel on classification issues; obtain a ruling from the IRS; and Draft agreements that document the independent contractor distinctions • Avoid using the word “control” • Specifically place responsibility for taxes, insurance, business licenses and the like on the Independent Contractor • Require only compliance with industry standards when possible • Specify that the IC determines the manner and means of the work and that the Company is only interested in the final result • Do not require progress reports • Avoid payment by the hour, day or week, try to pay per project • Avoid specifying hours of work, or where to work
  • 29. MITIGATING THE RISKS (CONT.) • FLSA Independent Contractor Test, Department of Labor’s Interpretive Guidance, IRS Independent Contractor Test • Include waivers of any right to participate in company benefits • Specify the length of the contractual relationship instead of leaving it open-ended • Specify the IC’s can perform services for others; Avoid contract provisions allowing for termination at will • Specifically state that the independent contractor provides all necessary tools, equipment and related items • Do not require IC’s services to the company
  • 30. MITIGATING THE RISKS: RECORDKEEPING REQUIREMENTS • Parties’ written agreement, including expired and revised agreements • Independent contractor’s federal Employer Identification Number (EIN or FEIN) • Payments made • Copies of 1099-MISC • Contact information • Documents that may evidence worker’s independent contractor status
  • 31. TAKEAWAY: Always consider your level of control and set narrow restrictions.
  • 32. HIDDEN DANGER NO. 3: USER DISSATISFACTION, PROPERTY DAMAGE, & PERSONAL INJURYMark Hildebrand
  • 33. VICARIOUS LIABILITY • Worker classification matters! • If the service provider is an employee, then the platform would most likely be found liable for any contract breach, property damage, or personal injury the service provider commits • If the service provider is an independent contractor, then the platform is much less likely to be found liable for the contract breach, property damage, or personal injury which the service provider commits
  • 34. WAYS TO MITIGATE THESE RISKS • Set Standards • Example: Community Guidelines • If violated, Service Provider may lose access to the platform • Vet the Service Provider • Example: Customer Rating System • Reward quality Service Providers with prominence on the Platform • However, do not outright terminate low-rated Service Providers
  • 35. WAYS TO MITIGATE THESE RISKS: TERMS OF SERVICE AGREEMENTS • Define the Platform as a Request Tool or a Connector of Service Providers and Customers and not a party to any contracts between the Service Provider and the Customer • Define that the Service Providers are Independent Contractors • Disclaim any liability for any misrepresentation of services, property damage, or personal injury • Require Service Providers and Users to indemnify and hold the Platform harmless • Require Service Providers and Customers to waive the right to sue the Platform
  • 36. WAYS TO MITIGATE THESE RISKS: INSURANCE • Rely on your service providers to insure themselves • Configure a hybrid insurance coverage split between the service provider and the Platform • Seek new On-Demand Economy specific insurance policies
  • 37. RELYING ON YOUR SERVICE PROVIDERS TO INSURE THEMSELVES • EXAMPLE: • In 2008, Airbnb launched and did not provide insurance coverage for their hosts • Hosts relied on their personal homeowner insurance policy • PROBLEMS: • Insurance Gap • Personal homeowner insurance policies do not cover damages when the dwelling was used commercially • Commercial version of the personal insurance policy was often far too expensive for the Service Providers
  • 38. SPLIT INSURANCE COVERAGE BETWEEN THE SERVICE PROVIDER AND THE PLATFORM • EXAMPLE: • Initially, Uber relied on their Driver’s personal automobile insurance policies to cover injury or damage occurring while the Driver was waiting for a request and while the Driver drove to pick up a passenger • Uber’s insurance would cover while the Driver transported the Customer to their destination • SAME PROBLEMS: • Insurance Gap • Personal automobile insurance policies did not cover damages when the vehicle was used commercially
  • 39. RELYING ON YOUR SERVICE PROVIDERS TO INSURE THEMSELVES OR SPLIT INSURANCE COVERAGE BETWEEN THE SERVICE PROVIDER AND THE PLATFORM • Litigation Expenses • If the Service Provider cannot compensate a victim, then the victim will likely bring the Platform into court • Triggering State Regulators’ Attention • Uncompensated Injuries or damage eventually trigger the attention of State regulators
  • 40. THE SOFIA LIU CASE • December 31, 2013 (New Year’s Eve), San Francisco, California: • Uber Driver killed Sofia Liu, a 6-year-old girl • The driver’s personal insurance could not cover the damage and injuries • Uber denied that its insurance policy applied to this case and would not compensate the victims • The family sued the Driver and Uber…. • ...and almost immediately California began writing a new law regulating the ride-sharing industry • 26 other states followed California’s lead in regulating this sector of the on-demand economy
  • 41. SEEK THE ON-DEMAND ECONOMY- SPECIFIC INSURANCE POLICIES • THE FIRST: MetroMile • ESTABLISHED INSURANCE COMPANIES: • United States Auto Association • Farmers Insurance Group • GEICO • AllState (HostAdvantage) • Mercury • State Farm • USAA • START-UPS: Slice Labs Inc.
  • 42. TAKEAWAY: Find an insurance broker and get insured!
  • 43. 1. REGULATORS • More Regulation in the Industry = More Precautionary Measures (And make sure to read the FTC Report!) 2. WORKER MISCLASSIFICATION • Always consider your level of control and set narrow restrictions 3. USER DISSATISFACTION, PROPERTY DAMAGE, & PERSONAL INJURY • Find an Industry-Specific Broker and Get Insured! THE HIDDEN DANGERS IN REVIEW
  • 44. QUESTION & ANSWER SESSION: RANDAL S. WHITE • Partner at Fox Rothschild LLP • Practice areas include: • Labor & employment • Employment counseling, policy developments, & audits • Employment litigation • Employment training • Wage & hour law • Unfair competition & trade secrets
  • 45. Please join us for a reception in the Third Floor Gallery! The slides from today’s presentation will also be made available on SlideShare: www.slideshare.net/DrexelELC