Imagine a teenager trying to explain to their parents how being a YouTube influencer is not only profitable but also a legitimate career. That same feeling of “not being understood” is how Uber (UBER) and Lyft (LYFT) drivers must have felt when a California court ruled that Prop 22 — a ballot measure that exempted Gig workers from state labor law — was unconstitutional. Uber and Lyft drivers may prefer being considered “independent contractors” rather than “full-time employees,” as this gives them greater work flexibility. The companies probably prefer it too, as it allows them to avoid paying full-time employee benefits, such as insurance. After the companies promised to appeal the court’s decision, both stocks emerged from an earlier drop, with Uber gaining 2.6% and Lyft 2.9%.
Talking about flexibility, up to 1,500 stylists left Stitch Fix (SFIX) after the company announced that stylists would now be forced to work at least 20 hours per week during regular business hours. Many of the stylists who left worked remotely and/or part-time. The company has been relying more on a computer-generated algorithm to provide clothing recommendations, and the expectation is that this trend will continue as more employees quit.
why it matters
Both situations show that 9-to-5 jobs are becoming a “thing of the past.” Companies will have to be ready to adapt (or hold onto) flexible working hours if they wish to keep their employees. Or, like Stitch Fix is already doing, rely on algorithms and AI instead.