The First Domino Falls in the Gig Economy: HomeJoy Shuts Down

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The recent shut-down of the once “disruptive” app HomeJoy, which had $40 million in funding, may be the sign of things to come as the gig economy evolves alongside the growing freelance movement.

In May, I attended a panel at the Personal Democracy Forum conference in New York City, specifically on how to take the technological tools of the so-called sharing economy – the ability to connect workers and those with needs through apps and data management – and ensure that this capability does not just enrich the owners of said technologies, like CEOs Travis Kalanick of Uber or Brian Chesky of Airbnb, but also empowers workers themselves.

There was an understanding that the solution was not to fight technology – Uber, AirBnb, Taskrabbit and the multitude of other gig technology tools are here to stay – but that there is a need to adapt technology so that it does not just empower and enrich those in Silicon Valley, but also the workers who provide the services that make these apps possible. And, ideally, companies should develop these technologies in a collaborative, open-source environment that allows for genuine community collaboration.

This is becoming a critical issue right now. Sharing economy “gig” workers are at the front-lines of a major shift in how Americans work. The era of secure jobs is over, as a growing number of Americans (myself included) are becoming freelancers.

According to the Freelancers Union (full disclosure: I am a member), an organization which seeks to connect and empower freelance workers across the country, right now, 34 percent of workers in the United States are freelancers like myself. In five years, this number will to grow to 40 percent.

Freelancing means little or no benefits from employers, unpredictable hours, and potentially a greater burden on government services.

The ironic thing is that, as Palak Shah, social innovations director at the National Domestic Workers Alliance, stated at PDF, domestic workers like those who worked for Homejoy have been dealing with a lot of the same challenges that more and more of us confront daily. They rarely received benefits for their work, were reliant on contracts and short-term gigs, and were often at the whim of their contracting companies for work – much like how Uber drivers are completely reliant on Uber to get passengers.

Perhaps it is no surprise that Homejoy workers, having been subject to the whims of gig work for years, were not willing to take the deal that the site offered. Its reasons for shutting down boil down to a few factors – an inability to control workers and a reluctance to provide benefits and safeguards to the workers who, if truth be told, were the ones making Homejoy function in the first place.

This is a battle being fought across the gig economy. Uber has been fighting tooth and nail to keep its thousands of drivers securely as contractors and not employees, using its millions to fight lawsuits, fund conferences for mayors and conduct massive public relations campaigns. Like Homejoy, Uber is owned not by its employees, but by its executives and those who funded it. Not exactly sharing, is it?

With growing numbers of freelancers and gig workers, Sarah Horowitz, director of the Freelancers Union, expects to see this become an issue in the fall general election. Hillary Clinton mentioned the sharing economy in a speech just last week, while Jeb Bush took an Uber in San Francisco while attending a fundraiser. The very issues that led to the demise of Homejoy are likely to be prominent in this fall’s presidential debates. And its about time, as the future of work depends on it.

Image credit: Mark Warner via Flickr

Nithin Coca is a freelance journalist who focuses on environmental, social, and economic issues around the world, with specific expertise in Southeast Asia.