Another Startup Is Moving Away From Contract Labor

Shift is the latest in a string of on-demand companies that have decided to stop using independent contractors.

Shift, an on-demand startup that helps people buy and sell cars, is looking to make employees out of its contract-based labor force. Almost 100 California-based "car enthusiasts" — what Shift calls the people who do price checks, coordinate inspections, facilitate test drives, and otherwise help with the transaction — are being given the opportunity to join the company as employees, starting December 1.

Use of contract labor by tech companies is a hot topic. Companies including Postmates, Washio, Handy, Lyft and Uber are currently being sued by workers who say they should be receiving the benefits and compensation befitting employees.

Not all on-demand companies use independent contractors — Munchery, WashUp, Alfred and Managed by Q, to name a few, use employees. Still others, such as Shyp, Instacart and Sprig, have announced intentions to transition their workforce from contract-based to employee status.

While lawsuits are a definite threat, those on-demand companies that forego the savings associated with hiring independent contractors often say its because hiring employees is better for business long term. A car is a big purchase, a Shift representative said in an email, and W-2 employees help the company deliver "premium, white glove service" to customers. As employees, the "enthusiasts" are now eligible for equity in the company as well; a spokesperson for Shift said the news was greeted with cheers.

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