Smartphones, Gig Work, and the Independent Contractor Debate

For centuries—maybe even millennia—the definition of an employee was simple: a person working under the control of an employer to perform tasks that benefit the employer, in exchange for payment. Whether paid by the hour, by commission, or per unit produced, the key factor was control. If someone dictated how, when, and where you worked, you were an employee.

Then, the concept of the independent contractor (IC) emerged. Unlike employees, ICs typically performed specialized work outside the core function of a company. The distinction largely boiled down to two factors: control (how much direction the worker received) and purpose (whether the worker was contributing to the company’s main business activity). If a worker had autonomy and their role wasn’t central to the company’s function, they were an IC. But if the company exerted significant control over how they did their job and they were integral to the business, they were an employee.

Then came the gig economy—and everything got murky.

The Gig Economy’s Identity Crisis

Companies like Uber and Lyft reshaped traditional employment models. Uber, for example, claims it isn’t a transportation company but a technology company that facilitates ride-sharing. This distinction is crucial because if Uber were classified as a transportation company, its drivers would likely be employees, not independent contractors. By maintaining that it’s merely a tech platform, Uber argues that drivers are outside its primary business function and should be classified as ICs.

Another major factor is control—or the illusion of it. While Uber asserts that it doesn’t directly control its drivers, critics argue otherwise. The app dictates fares, penalizes drivers for rejecting rides, and even influences behavior with incentives. Yet, labeling workers as ICs allows companies to avoid costs—no benefits, no employer-paid taxes, and no unions, which ICs are legally barred from forming.

The Reality TV Connection

The battle over employment classification isn’t just affecting rideshare drivers and delivery workers—it’s also colliding with entertainment.

Reality TV, once hailed as "unscripted" entertainment, may not be so unscripted after all. Several former contestants from a popular matchmaking show have filed complaints with the National Labor Relations Board (NLRB), arguing they were misclassified as ICs when they were, in fact, employees. Their claim? Producers controlled their actions, essentially scripting the show while denying them the rights and benefits of traditional employees.

If the NLRB rules in favor of the contestants, the impact could ripple far beyond reality TV. Many other forms of informal and online entertainment—think influencers, content creators, livestreamers—could suddenly fall under the umbrella of employees, forcing platforms and production companies to rethink how they classify workers.

The Legal Lag: Time for an Update

California has taken steps to redefine employment laws, passing legislation that clarifies who qualifies as an employee. But at the federal level, the law remains outdated.

The smartphone revolution enabled gig work, streaming, and on-demand content like never before. Whether Congress is ready or not, the legal framework must evolve to address this new reality. The question isn’t whether change is coming—it’s how long the law will take to catch up with the smartphone age.

If you have questions about this article, or more generally about independent contractors versus employees, contact Todd Knode (tknode@setlifflaw.com) at (804) 377-1277 or Steve Setliff (ssetliff@setlifflaw.com) at (804) 377-1261.