October 21, 2020

On Contracting

I came across a fascinating story from Planet Money (read the transcript here) on the current state of customer service. It’s something that we often think of as outsourced, but it seems that it’s undergoing a bit of a shift in recent years, to mimic the so-called business models of Uber and Lyft (neither of which, despite an abundance of venture capital and then capital from public offerings, are profitable).

The idea goes something like this: instead of hiring workers to provide this service as employees in the country of nexus, and instead of hiring a company in another country to have their employees handle provide this service, companies hire a company who has independent contractors” to provide this service. These jobs and are billed as opportunities to be your own boss” and require the workers themselves to pay for the training, pay for any hardware (computer, headset, phone system), and pay for networking (internet, phone line). Essentially, in order to cut the costs of training for employees, companies don’t consider them employees and require said employees to shoulder all the costs.

Further, any contracts established include non-disclosure agreements, arbitration requirements, and statements to avoid class-action lawsuits. All are measures that demonstrate awareness of what is being wrong, and legal loopholes ready to go which can they can use to get away with it.

This practice is common with the gig economy”, most known by rideshare services Uber and Lyft and food deliver services Doordash, PostMates, UberEats, etc. California in 2019 passed a law banning the misclassification of employees as independent contractors, which had the effect of harming fields which have long had independent contractors and followed the law appropriately. This was notable with interpreters and translators, but also included the entertainment industry, trucking, and others. Interpreters banded together to get exemption from the law, AB5, and after close to a year of trying, that exemption was finally granted.

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