The Sharing Economy and the Edges of Contract Law: Comparing U.S. and U.K. Approaches

Innovation and Economic Growth, Networks, the Internet, and Cloud Computing, Internet and Media and Content

Article Snapshot


Miriam A. Cherry


George Washington Law Review, Vol. 85, No. 6, pp. 102-140, 2017


Online platforms and apps like Uber allow work and business to be structured in new ways. Courts must consider how to classify new types of work to resolve disputes over wages and benefits.

Policy Relevance

Courts in the United States should consider legal theories developed in the United Kingdom to support workers.

Main Points

  • Technology and the sharing economy foster new structures for the organization of business and work, some of which raise legal classification problems.
    • Are drivers using ridesharing applications employees or independent contractors?
    • Should users be compensated for performing an online task disguised as a game?
  • These new forms of work are governed by standardized form contracts known as end user license agreements; increasingly, these contain arbitration clauses.
  • In the US, courts consider several factors in determining whether workers like Uber drivers are employees or independent contractors.
    • In the control test, the court is more likely to identify a worker as an employee if the "employer" controls the way the worker performs his task and sets the hours of work.
    • In the entrepreneurial activities test, the court considers whether the worker is acting as an entrepreneur or is financially dependent.
  • The London Employment Tribunal ruled that the reality of the relationship between the organization and the drivers made the drivers employees, not independent contractors.
  • In some crowdwork cases, courts consider whether workers should be paid for work the consumer was not aware he was performing for profit; a US court ruled that bloggers for The Huffington Post were not entitled to payment when they had no expectation of being paid at the outset.
  • In the UK, some scholars have proposed that plaintiffs be allowed to recover benefits conferred on another under tort law rather than contract law, broadening the principle of unjust enrichment.
    • Courts could apply this theory to cases involving online work.
    • The courts should ask whether the online platform has unjustly benefitted at the claimant's expense.

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