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The on-demand economy: Can 'share and share alike' protect workers?

Back in July we posted about employee classification and the fine line between contract worker and employee. It is a subject we and everyone else involved with workers' compensation and other employment benefits will come back to often. The nature of work changes all the time, sometimes driven by technology, sometimes by social forces, and those changes alter the way we think about workplace injuries and illnesses and employers' responsibilities to their workforces.

Perhaps the most discussed change taking place right now is the move toward an on-demand economy. Companies like Uber and Lyft rely on temporary workers who make themselves available when they can. It's a change from how things have traditionally been done: The businesses make the work available, but it's the workers who drive -- no pun intended -- the business.

In a presentation to workers' compensation insurance professionals, Dr. Robert Hartwig, president of the Insurance Information Institute, reminded attendees that the on-demand concept has been around for a long time. When you get down to basics, for example, pizza delivery is an on-demand service. Illinois' own Peapod LLC launched its Internet-only grocery delivery services in 1989.

Mobile technology has transferred the on-demand model from hard goods to services. The I.I.I. estimates that 50 percent of all adults across the globe have a smartphone. That constant access to everything at all hours has resulted in an increase in demand for temp workers and a corresponding decrease in demand for full-time workers.

And this new workforce looks much different from the "traditional" workforce. These workers are more flexible, less likely to be comfortable in corporate cube farms and much less likely to thrive in bureaucracies. It's an exciting transformation -- if you don't mind not having disability insurance, retirement benefits, the protections offered by workers' compensation and the other perks of being an employee.

Sometimes, progress is just change in a fancy hat. With the sharing economy, though, the change will have a real impact on real people's lives. It remains to be seen if the model can survive once workers start demanding more protection from occupational injuries and illnesses.

And don't even get the I.I.I. started on robotics and driverless cars.

Source: Insurance Journal, "How On-Demand Economy Is Changing Workers’ Compensation," Denise Johnson and Andrew Simpson, May 15, 2015

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