Marco Zappacosta runs an Internet startup called Thumbtack that matches plumbers, yoga instructors and other workers with jobs, putting him in the middle of what is called the “gig economy.” Now, that position has made him in demand with a group of political power players.
Last week, Zappacosta traded emails with Senator Mark R Warner, who wanted to talk about how tech companies were changing the nature of work. In July, Republican presidential candidate Jeb Bush visited Thumbtack in San Francisco to discuss the gig economy and small businesses. In January, Zappacosta took dozens of the housecleaners, caterers and movers who use Thumbtack to the White House to talk with the US Small Business Administration.
“I never had the expectation that senators and presidential hopefuls would want my views,” said Zappacosta, 30, who helped found Thumbtack six years ago. Thumbtack is one of several startups that are being drawn into the debate over the future of work by politicians and policymakers. With the approach of an election year in which income inequality is expected to be fiercely debated, the security – or lack of security – that these types of jobs provide has become a central issue.
Many of today’s technology startups are enabling people to try to make a living by fulfilling one-time tasks or doing freelance work, fuelling the rise of the gig economy. The trend is exemplified by Uber, the giant ride-hailing company, which directly employs about 4,000 people but has more than 160,000 drivers in the United States who depend on it for at least part of their livelihood.
Politicians are seeking out startups like Thumbtack to learn more about how they work, especially because their business models represent a counterpoint to Uber’s. While Uber requires drivers to use its app to find passengers for rides, for example, Thumbtack merely arranges an introduction between a worker and a job – the relationship is maintained outside the company.
Other startups that have been approached by politicians include Munchery, a food delivery company that employs its chefs and drivers, and Managed by Q, an on-demand office maintenance service that also has full-time workers. (By contrast, Uber drivers are classified as independent contractors.)
“We create numerous jobs in every market we’re in,” said Tri Tran, chief executive of Munchery, which hosted Democratic presidential candidate Hillary Clinton in August for a conversation with tech startups including Shyp, Instacart and Uber. “Uber and Airbnb create a massive amount of jobs in different ways. When that happens, policymakers have to pay attention.” An Uber spokeswoman declined to comment.
A recent study commissioned in part by the Freelancers Union estimates that about one-third of the workforce, or 53.7 million people, now do freelance work, an increase of 700,000 from a year earlier. Nearly three-quarters of the freelancers surveyed agreed that technology was making it easier to find work.
Many policymakers are only now catching up to the implications of the trend. Even though many startups that have pioneered more flexible work arrangements began operating in 2009 and 2010, lawmakers did not start to pay attention to them until Uber ran into legal trouble over whether its drivers should be defined as employees, according to Arun Sundararajan, professor of information, operations and management sciences at New York University.
Uber says it drivers are contractors. That means the company does not need to pay them benefits. “This time last year few politicians were paying attention to the workforce that powers these startups, and now they’re trying to figure out how to protect them,” Sundararajan said. That legal strife has since prompted a stream of policymakers and politicians to visit startup executives in Silicon Valley, and tech leaders to head to Washington to discuss worker protections and classifications.
David Kochel, chief strategist for Bush, said the candidate was reaching out to startups because “the gig economy is transforming the way we think of work. You have to be on the gr-ound to understand what’s happening,” he said.
Startup executives say they have pushed politicians to be more proactive on the topic of the future of work. When Clinton visited Munchery, for example, Tran said, he urged her to be a “leader” on the issue. “Whether or not she becomes the next president, she’s in a position to influence policymakers and champion the ways that mobile devices and technology are coming up with new ways to offer flexible job opportunities,” he said.
A spokesman for Clinton said she had visited Munchery to understand better how to support entrepreneurship.
Shifting nature of work
Last month, Warner also visited several Silicon Valley companies, including Lyft and Airbnb, to talk about the future of labour. Coming up with parameters to deal with the shifting nature of work “is too important to leave to the courts alone,” he said in an interview. He added that he was worried the US could end up with a patchwork of state laws that provide uneven protection for workers.
“There’s just a lot of pressure to not screw it up when it comes to labour policies that have evolved over a century and impact millions of people,” said Dan Teran, the co-founder of Managed by Q, who has been having regular conversations with state and local politicians in New York, where his company is based. Teran’s company classifies workers as employees and provides benefits including health care.
For Thumbtack, it became natural to forge ties with Washington as the future of work has grown into a larger debate. The company, which has 350 employees, has raised about $273 million and is valued at nearly $1.3 billion, has several executives who have worked as White House staff members and interns.
Last month, Thumbtack’s chief economist, Jon Lieber, who was the associate director of the National Economic Council during the administration of President George W Bush, testified before a House subcommittee at a hearing called “The Disrupter Series: How the Sharing Economy Creates Jobs, Benefits Consumers, and Raises Policy Questions.”
Zappacosta said start-ups were becoming more interested in politics generally as they begin to engage in issues like employment laws. He said he had participated in panels where start-ups were pushing lawmakers to take a more complete view of what it means to freelance.
Some want lawmakers to create a new worker classification that better describes the jobs offered by some companies that fall somewhere between full-time employment and independent contracting. The ways these startups are changing work “isn’t just about the gig economy,” Zappacosta said. “This is about the whole economy.”