Amazon Home Services: What’s this mean for the 1099 economy?

Amazon Home Services Could Take Uber’s Iffy Labor Model to a Whole New Level

Amazon Home Services Could Take Uber’s Iffy Labor Model to a Whole New Level

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A blog about business and economics.
March 31 2015 12:23 PM

Amazon Home Services Could Take Uber’s Iffy Labor Model to a Whole New Level

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Photo by William Andrus via Flickr

On Monday, Amazon officially launched Home Services, a new marketplace for odd jobs and professional help. Among its 700 (very diverse!) offerings: Plumbing, TV wall mounting, iPhone repair, voice lessons, tire installation, grill assembly, gutter cleaning, goat grazing. Yes, goat grazing. The notion, in a nutshell, is that Amazon has already become a ubiquitous seller of things. Now it wants to be a catch-all facilitator of around-the-home help, too.

For Amazon customers, this all sounds very convenient and incredibly helpful. Need a plumber? No more Yellow Pages! But for the workers marketing their services, it could amount to Amazon’s endorsement of the kind of economy that the rise of start-ups like TaskRabbit, Instacart, and, yes, Uber have augured: one in which more and more people don’t have full-time jobs, but instead scrape together gigs through various online platforms.

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Amazon is describing Home Services as an “invite-only marketplace” for those service providers. It’s also promising to price all its services upfront, and to match cheaper local rates if customers come across them. Here’s more from the Verge, which talked to Peter Faricy, vice president for Amazon Marketplace:

A big part of the sales pitch from Amazon is that they are doing the hard work of figuring out who you can trust. “We’re very excited to see if we can solve what today is a real pain point. It’s tough to quickly find someone who is qualified,” says Faricy. Amazon says it accepts an average of three out of every 100 service professionals in each metro area. It makes sure each business is licensed, insured, and passes a five-point background check, with a further six-point background check for each technician. You will never need to worry about hiring a sub-par goat grazer again.

Once Amazon does the initial verification legwork, it’s hoping customers will do the rest. People who’ve used a service will be able to write “verified reviews” of their experiences, which will be visible to anyone who visits the site. Customer reviews are one of the things that’s made Amazon’s traditional platform for selling goods so successful; the company is probably hoping that reviews will do the same for its services marketplace as well. Amazon plans to take a 10 percent to 20 percent cut of each service booked through its site.

If Amazon’s latest venture sounds kind of Uber-esque, that’s because it is—not in the will-bring-you-a-car-in-six-minutes way, but in the will-get-you-a-service-quickly-and-conveniently way. Amazon says customers can browse, buy, and schedule services on its new platform in “less than 60 seconds.” In other words, Amazon is entering the “on-demand economy” in a big way. Already, there are lots of other platforms that offer versions of what Amazon Home Services is promising. TaskRabbit, which has partnered with Amazon on Home Services, lets users describe a task and hire someone to do it for them. Handy helps people book cleaning services or handymen. Instacart offers on-demand grocery shopping and delivery. Most of these services run on labor from contract workers, which is why they're sometimes referred to collectively as the “1099 economy.”

Amazon’s entrance into this field would seem to legitimize this contract-style work, in which people run their own businesses and arrange jobs through various third-party platforms in exchange for a fee, in a way TaskRabbit and Instacart and Handy cannot. Where those apps are still essentially startups, Amazon is an established public company. We don’t yet know if gig-based jobs are good or bad for workers, but they’re already the subject of plenty of lawsuits, and it’s an open question whether 1099-style work will last or be sued to death. Amazon Home Services is one more indication that the independent-contractor model might be here to stay.

Alison Griswold is a Slate staff writer covering business and economics.