> Unlike Webvan, they rely on contract workers. No need to operate a large fleet of delivery vehicles/drivers...
They currently rely on contract workers but there is a legitimate question as to whether many of the on-demand companies have misclassified their workers[1]. Uber and Handy have already been sued over classification, and class action attorneys have publicly named other on-demand startups that they're investigating for similar actions.
As one attorney has observed, the startups that have made 1099 contractors the foundation of their businesses "are potentially exposed to a bet-your-company liability if they have not structured, documented, and implemented their freelance relationships in a manner that enhances their compliance with federal and state independent contractor laws"[2].
They currently rely on contract workers but there is a legitimate question as to whether many of the on-demand companies have misclassified their workers[1]. Uber and Handy have already been sued over classification, and class action attorneys have publicly named other on-demand startups that they're investigating for similar actions.
As one attorney has observed, the startups that have made 1099 contractors the foundation of their businesses "are potentially exposed to a bet-your-company liability if they have not structured, documented, and implemented their freelance relationships in a manner that enhances their compliance with federal and state independent contractor laws"[2].
[1] http://nymag.com/daily/intelligencer/2014/09/silicon-valleys...
[2] http://independentcontractorcompliance.com/2014/12/02/novemb...