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The Next Phase of On-Demand: Labor as a Service

As on-demand apps like Uber and Instacart grow, there’s one thing standing in their way: people. These companies work tirelessly to recruit and vet enough workers to meet spikes in demand and to keep them happy. A loyal and engaged labor pool is critical for industry leaders, like Uber, and losing a labor advantage is a big risk. (Hence, all the debate and legal wrangling around the status of 1099 contract workers.)

A new breed of labor-as-a-service startups could lower the barriers to entry for new on-demand companies by expanding and creating more liquidity in the labor pool, upping competition.

These startups—Wonolo, Rickshaw and Bringsy, to name a few—are still in the seed stage. And they’re trying different approaches. Rickshaw, for example, powers delivery for startups that deliver dry cleaning and farm produce, among other things. It brings together all those delivery requests from various apps and packages them into a single route that could provide a driver or courier a better guarantee of a full day’s work.

Wonolo (which stands for “work now locally” and rhymes with “yolo”) is more of a technologically-empowered temp agency. It has a stable of pre-vetted workers it can ping for e-commerce clients when order volumes spike, for example. Businesses can get labor within minutes instead of days, and workers can pick up quickly in their spare time. But Wonolo always shows workers a guaranteed amount of pay before they decide to take a job.

If successful, these firms could not only help on-demand services, they could make it easier for freelance workers to stitch together more reliable incomes or find work that fits their lifestyle. The Information held a joint interview with co-founders at Wonolo and Rickshaw to explore the future of labor in the on-demand economy. Edited excerpts follow.

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Mr. Brustein: I agree that certain things should be outsourced and your service should be your real differentiator. But for us, the comparison to a Stripe or Braintree, an API you plug into, it doesn’t ring true to us. We’re providing people, a community. I personally don’t think Uber or Lyft will ever become commoditized because it’s such a different experience between the two and the brands will make the difference. Wonolo is the same way. We’re not delivering robots. We’re delivering people, and they have working styles and personalities.

Semil Shah commented on this article.
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