Northeastern Research Shows the Benefits of Shifting to Standardized Employment
MIE Distinguished Professor Ozlem Ergun and other Northeastern researchers presented findings that suggest both workers and platforms may benefit from a move away from the independent contractor model to standardized employment. The interdisciplinary research team studied the working behavior of the package delivery platform Deliv for the study.
This article originally appeared on Northeastern Global News. It was published by Tanner Stening. Main photo: Researchers presented findings to a study looking at gig work during an event at the John D. O’Bryant African American Institute on May 16, 2024. Photo by Matthew Modoono/Northeastern University
Is gig work compatible with employment status? Study finds reclassification benefits both workers and platforms
As California legal challenges to the treatment and classification of so-called gig work continues apace, a Massachusetts trial over the same issues touched off this week.
Indeed, the fight over platform companies’ treatment of gig workers as independent contractors has become a central discontent of the modern “gig” economy, so-named because of the sheer number of independent contractors that populate today’s workforce.
But Northeastern University-led research suggests both workers and platforms may benefit from a move away from the independent contractor model to standardized employment.
An interdisciplinary team of researchers at Northeastern studied the working behavior of Deliv, a U.S.-based package delivery platform, that facilitates so-called last-mile deliveries between retailers and consumers. The group found that as workers transitioned from independent contractors to employment status, their flexibility remained the same, while the company’s operational efficiency improved.
The research was presented on Thursday during a culminating conference event on Northeastern’s five-year, National Science Foundation-funded collaboration with researchers across Massachusetts aimed at better understanding “algorithmically-controlled work.”
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The fight over platform companies’ treatment of gig workers as independent contractors has become a central discontent of the modern “gig” economy. Photos by Matthew Modoono/Northeastern University
The event comes as lawmakers in Massachusetts are weighing new regulations specifically targeting transportation and delivery network companies, such as Uber, Lyft and DoorDash — all platforms that use algorithms designed to optimize the ways drivers are matched with jobs.
Ozlem Ergun, a distinguished professor of mechanical and industrial engineering at Northeastern and co-author of the study, says the Deliv was founded in California in 2012 and was acquired by Target in 2020. Pursuant to a change in the law in 2020 known as California Assembly Bill 5, or AB 5, the same-day delivery company reclassified its state workforce from contractors to employees. The company operates in cities on both coasts, from San Jose, Santa Monica and San Francisco, to Chicago, Atlanta, Boston and Houston.
Ergun says Deliv embraced the mandated change at the time.
“They actually thought there might be some operational advantages to moving from contractual work to employee status in terms of planning, scheduling and reliability,” Ergun says.
Having previously developed algorithms for Deliv, Ergun saw an opportunity to ask the platform for more data, which she and her colleagues then used in the study. The operational data analyzed included the number of hours worked per delivery shift, the scheduled hours for each delivery shift, the number of packages delivered and the number of paid hours completed per driver, as well as each driver’s platform tenure.
Read full story at Northeastern Global News