Dive Brief:

• The Committee on Education and the Workforce held a hearing on the sharing economy to answer a difficult question: Does the gig economy help reverse economic trends or exacerbate the loss of worker protections?
• Questions at the hearing focused on the role of the federal government in protecting those workers as well as how the growing gig economy could be regulated but still allow flexibility and a safety net.
• Panelists included Michael Beckerman, President and CEO of the Internet Association; Sharon Block, executive director of the Labor & Worklife Program at Harvard Law School; Jonathan Johnson, owner of SnapSeat; and Dr. Arun Sundararajan, professor of business at the NYU Stern School of Business.

Dive Insight:

Each panelist offered a different perspective on the role of regulation in the gig economy, and how each would like to see it move forward. All agreed, however, that the reach of the gig economy will only continue to grow and encompass professions at all skill levels, including traditional white-collar jobs like software engineers, radiologists and accountants.

The threat of automation for many of these jobs remained a key sticking point. Sundararajan spoke in favor of agreements between businesses, workers and the government that would allow gig workers to become more than faceless, on-demand (and easily automated) labor. Instead, he argued, gig workers should be able to be entrepreneurs themselves and actually own their own capital with which they could work and establish their own brand.

But the decades-old employer-provided safety net also loomed large in the background of the discussion. Healthcare and retirement benefits have been tied to employment through employer pensions and employer-provided healthcare plans since the era following World War II — but these programs relied on all workers depending on full-time employers for their livelihoods. In the modern economy, many workers provide services on a freelance basis outside of a full-time employment relationship. And these freelance-style services are only growing in scope and variety as internet platforms enable new forms of "sharing" akin to Airbnb.

The question of where laws and regulations fit in is difficult to answer. Block argued that the choice between the positive attributes of the internet economy and good labor standards is a "false choice," during her testimony, saying innovators should focus on creating good jobs with solid pay. But Beckerman was concerned that companies in industries ripe for disruption would instead try to use any regulations or laws to block new competitors from emerging.

For employers, the hearing is a sign that they should be watching their engagement with gig workers carefully, as is it clear the issue will likely receive more attention in the future.