Another Labor Day has passed, but don’t let new developments in the market for labor pass you by without notice. The New York Times recently reported that apps such as Pared and Instawork are the latest inroads the gig economy has made into the restaurant industry. Briefly, these apps are helping restaurants fill gaps in their workforce during the current labor shortage, and they are apparently helping workers such as servers, cooks and other kitchen help find more opportunities beyond the single job for any one restaurant. Think Uber for restaurant labor.
Both these apps were founded in San Francisco in 2015 and workers have since then boasted of higher salaries and greater opportunities while restaurants have expressed relief that their labor needs can be met flexibly and on a real time basis. Pared reportedly has 100,000 people signed up on its platform while Instawork reportedly has nearly 500,000 people. Pared is now in the San Francisco Bay Area and New York, and it plans to expand to Boston, Philadelphia and Washington, D.C. soon. Instagram operates in several U.S. markets including San Francisco, Chicago, Los Angeles, San Diego, Phoenix and is also growing.
While much potential exists with these apps, everybody should check the fine print. From a legal perspective, these apps present important questions, among other things, about who serves as the worker’s employer. You want to be sure that the worker is being correctly treated for tax and worker compensation purposes as well as for all the other employee-based workers’s rights and safety net laws that protect employees in the workplace. And, you want to be clear who has the duty to ensure these obligations are being met.
From a relationship perspective, these apps may undermine loyalty on both sides as employers may not invest in employee training and development as much as otherwise and workers may not invest time to get to know any particular business or to grow with any particular organization or clientele.
While needs do need to be met in the short term, the quick fix should not distract either restaurants or the labor force from the long term benefits of commitment to a business or organization. Relationships are the basis of all business and the success of any organization, and swiping right alone does not a relationship make.
Here’s a link to the article in the New York Times —>