Shyp’s employees

I wrote about our investment in Shyp yesterday.

I also wrote about the current debate taking place about whether the smartphone-enabled workers of on-demand companies need to be treated as employees or independent contractors a week ago. In the post, I mentioned Shyp as an example of a company that, depending on how the law develops, may need to change its current practice of classifying its couriers as independent contractors.

Shyp decided not to wait for any changes in the law. Instead, Shyp CEO Kevin Gibbon announced in a blog post that the company is proactively beginning to transition its couriers from independent contractors to employees. Shyp’s satellite van drivers and warehouse personnel were already treated as employees.

I don’t think that there’s a single right answer for whether an on-demand company should treat its smartphone-enabled workforce as employees or independent contractors. Rather, there’s a tradeoff. Employees end up costing more but their greater loyalty to the company and more company specific training make them deliver a better experience to the company’s customers.

In the tradeoff between economics and customer service, Shyp decided to pursue the latter.