The Changing Face of the Extended Enterprise and Extended Employees
A recent ruling by the California Labor Commission involving Uber has put the evolution of the workforce and labor in the spotlight. Established in 2009, Uber positions itself as a transportation network company. At its core is the Uber app, which acts as a logistics platform that connects users with drivers, provides directions, and facilitates payments. Instead of hiring drivers as employees, Uber employs them as 3rd-party contractors and contends that they are a logistics operation rather than a traditional taxi company. The California Labor Commission disagreed with Uber’s position, ruling that its drivers were in fact employees. It stated, “Without drivers such as [the] Plaintiff, [the] Defendants’ business would not exist.”
Though the Labor Commission’s decision only applies to a specific driver in this instance, the issue as a whole also sheds light on the shifting work landscape. Uber is just one of a number of new startups that have harnessed the power of the extended enterprise and turned it into their core business platform. Through the use of enterprise mobile apps, these companies are pushing the boundaries of the traditional business model and reaching a vast extended network—Uber alone reportedly has one million drivers globally and facilitated 140 million rides in 2014. Companies with a progressive mobile mentality have initiated a completely new business narrative: in addition to developing enterprise apps to support business functions, you can develop apps to drive business functions. These companies have also shown the power of the extended network.
Regardless of the ruling against Uber, it is clearly evident that contractors, dealer networks, and 3rd party workers are fast becoming a permanent fixture of the work landscape. Both startups and established companies are favoring more non-traditional forms of employment. In fact, it is predicted that 40% of the US workforce will be made up of contractors by 2020. This shift is being driven by several factors. Employers have long found contracting advantageous. However, workers also appreciate the flexibility that comes with becoming a part of an extended workforce, but it was not until recently that technology has been able to catch up with demand.
Now that enterprise apps and widely available internet access make it possible for organizations to tap into a much wider workforce, expect companies who embrace the extended enterprise to forge ahead of their competitors in the years to come.