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Workers Rising: Homejoy's Collapse Is the Latest Crack In the Sharing Economy

Independent contractors want to be employees, and investors noticed.
Homejoy CEO Adora Cheung. Image: Flickr/TechChrunch

Homejoy, a platform for cleaning services in the glutted "Uber for X" market, will be shutting down operations on July 31.

The company's blog post on the closing is light on details, but CEO Adora Cheung told Re/Code that a failure to raise enough funds to keep going is to blame. The Homejoy CEO also suggested that fallout from a recent ruling by the California Labour Commission was to blame for the lack of money.

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Last month, the Commission decided that an Uber driver seeking compensation from the company was an employee. Uber, like Homejoy, considers workers using its platform to be independent contractors.

"A lot of this is unfortunate timing. The [California Labor Commission's] Uber decision […] was only a single claim, but it was blown out of proportion," Cheung told Re/Code.

The Commission's ruling, along with several lawsuits filed against Homejoy by workers seeking to be considered employees, has shaken investors' faith in companies that trade in independent contractors and non-jobs—like Uber and Lyft—Cheung said.

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Homejoy is one of several platforms in the so-called "gig economy," the latest neologism to describe what we previously called the "sharing economy," which prefers to cast workers as self-employed contractors in lieu of the trappings of employeeship: benefits, stable wages, and so on.

Other, similar companies, like Postmate and Caviar—both on-demand food delivery platforms—are also facing lawsuits regarding their non-employees' status as independent contractors.

All of this drama has led some commentators to suggest a new class of employee to account for the changing landscape of labour in the age of the peer to peer platform. Others, however, are suing for the right of the folks caught in the middle of the debate—the actual workers—to salvage some semblance of a traditional employee-employer relationship.

While Uber is still fighting tooth and nail to stay on top—and winning, in many cases—for lesser entrants into the gig economy, it's looking a lot like the cracks that were already inherent in the business model are finally splitting into fissures. UPDATE: Homejoy competitor Handy is offering Homejoy cleaners a $1,000 signing bonus for joining their platform,Re/Code has reported. Handy, the larger of the two platforms, was previously in talks to acquire Homejoy.