I still think you miss the point. I don’t think companies are using 1099 workers just to save money. The on-demand model with independent workers who are not scheduled by the company but work when and if they want, based on their own priorities and assessment of earning potential, is a fundamentally different way of organizing low wage work. And it’s a better one, in many ways. I believe that requiring these employees to be W2 workers would be a huge step backwards. And suggesting that it is just cupidity on the part of on demand companies is akin to claims by auto dealers that Tesla is cheating by selling direct to the consumer.

I once read a great definition of a business model, which came to me by way of a consultant named Dan Beam: “A business model is the way that all of the parts of a business work together to create marketplace advantage and shareholder value.”

The independent contractor model with workers responding to marketplace demand in real time is a key element of the on-demand business model, just like linking to other people’s content and presenting snippets of it without first getting permission to do so is intrinsic to Google’s business model. (You may recall that at one time news publishers wanted Google to take them out of the search index, and that Google Books was derailed by legal assaults on the legality of scanning books in order to create a search index from them.)

When someone has a new and disruptive business model, be very careful in arguing that they could simply graft old models onto their business and still have it work as well.

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Founder and CEO, O'Reilly Media. Watching the alpha geeks, sharing their stories, helping the future unfold.

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