Why Independent Workers Don’t Want W-2s
How amazing is the world that we live in today? Anyone with a smart phone can download one of hundreds of apps and begin working almost immediately. Thanks to technology and some savvy entrepreneurs, you can turn your own car into a taxi, use the tools in your shed to help landscape someone’s property, put those television-mounting skills to use in other peoples’ homes, walk a few dogs, or even just take a picture of a storefront – and you’ll get paid for all of it.
Today’s world is one in which you can clock in and clock out whenever you want, work whichever days you’d like, and take the jobs that you would like to do and ignore the ones you don’t. Freelance work has been around forever, but new tech and the rise of the on-demand economy have taken “working freelance” to a whole new level.
Of course, you have to make a few trade-offs when you choose the freelance life. We all know what they are: less stability, no workers’ comp or health insurance, no sick leave, the hassle of paying your own taxes, etc.
You can’t have it both ways. You can’t have the freedom of freelance and the stability of the full-time office worker. While there is active discussion right now around the potential development of a third classification of worker – a combination of the W-2 and 1099 –nothing like this yet exists. For now, you are classified as either an employee or a contractor – not both. Each classification has its pros and cons.
Why Go Freelance?
If you’re already employed and just looking for a few extra dollars, or you don’t need to work but want to, then the apps of the sharing economy may be exactly what you’re looking for. If you’re looking to work as many hours as humanly possible and make as much money as you can, the on-demand industry can provide that as well.
That’s right – we’ve interviewed several people who make well over $100,000 a year working in the on-demand economy exclusively. Seriously: One person who works with TaskRabbit opened up his account and showed us that he was on track to pull in $125,000 in 2015.
Of course, he works his butt off to reach this level of earning. Still, you can’t really make that kind of money with working hard – even if you were a full-time, W-2-style worker.
And you can’t make that kind of money with every on-demand platform out there. Some pay more than others. Some have various requirements you have to meet before you can even work there. Some rideshare companies accept any car that can pass inspection, while others require you to drive a new Suburban or Escalade.
Taking a picture outside a storefront requires less of a background check than, say, watching someone’s children, and some of these on-demand platforms are super high-end, meant for lawyers, accountants, or even doctors (yes, lawyers, accountants, and doctors participate in the on-demand economy!).
We surveyed a few hundred of our members at Crowded.com and asked them if they would prefer to be classified as a W-2 or to stay as 1099s. The overwhelming response was that the workers did not want to be paid as W-2s. They wanted the freedom of the 1099 – no matter the trade-offs they had to make.
People who download any of these apps are not looking for a rigid schedule. They are not looking to set their alarm clock for 6:05 AM and catch the 7:03 train every single day. They’re not looking for a boss who has a boss or a 10:05 cigarette break. They’re looking to make money, have their independence, and maintain flexibility in their life.