"It is an historic decision, actually a monumental decision," said Giacomo Santangelo, an economics professor specialising in labour issues at Fordham University. "This is the first major, successful municipal action taken against the gig economy in the US."

On-demand gig workers are a relatively new subset of the workforce. Despite being technically classified as independent contractors, freelancers or vendors, they are dependent on corporate technology platforms for one-off jobs such as driving, writing code or performing specific tasks.

They have little, or no say about how often they receive these jobs or how much they are paid, and while companies like Uber say ‘driver-partners’ can earn hourly fees up to US$30, in actual fact, gig workers such as drivers – on average – make far less.

"While some are hailing this as a win for drivers’ rights, others are seeing it as a reflection of the ever-growing gig economy where workers in on-demand companies such as Uber choose where and when they work," said Melissa Gonzalez-Boyce, Legal Editor at XpertHR.

In fact, discontent is growing amongst gig workers, who are setting up web sites to communicate and share their frustrations; some have even organised strikes and protest in major cities across the US and elsewhere in the world. Union activists say we should expect to see more of this.

"The economy of the future—whether that is house cleaning, content creation, pet care or whatever— is going to include gigs. We have to make sure that it isn’t making itself profitable at the expense of the people doing the work," said Kati Sipp of the Hack the Union platform.

New economy, new forms of organising

The gig economy puts workers in a one-on-one relationship with the companies they work with. The balance of power is heavily titled towards the company, which dictates the terms of employment, payment and reserves the right to change of these terms at a moment’s notice.

According to Santangelo, the benefits that this provides both workers, and users, are not as obvious as many believe. "The illusion of personal control that the gig or sharing economy presents is just technological misdirection," said Santangelo.

"We feel that we are getting a service – hotel, transportation – cheaper, however, we end-up paying for it in other ways; in increases in municipal taxes to finance the government subsidies paid to the displaced taxi drivers, for example."

Moreover, the economic impact of the on-demand economy is uncertain. While it may appear that more and more people are doing gig work, in fact, this is just the latest wave of a larger, long-term trend away from full-time employment towards contract or part-time work.

"Employers like Uber are accelerating trends that we’ve experienced for a few decades now: income and wealth concentration at the top of the management hierarchy, combined with a downward shift in risk and unpredictability for the employees/independent contractors of these firms," said Jake Rosenfeld Associate Professor of Sociology and labour expert at Washington University in St. Louis, Cincinnati.

Because workers are often isolated, they have little way to connect or coordinate with other workers. This is the classic problem that the first trade unions initially sought to solve – creating collective voices to balance the power between management and staff.

"What the [Seattle decision] highlights are ongoing issues concerning worker classification in the US, an issue that’s growing in importance with the rise of the ‘gig economy,’” Rosenfeld told Equal Times. “For an employer like Uber, defining your drivers as independent contractors shifts much of the risk and costs associated with hiring employees to the employees themselves."

In the end, the only difference between the gig economy and what large companies have been doing for decades is that today, new technology now allows for the further fragmentation of work, creating even more revenue for companies – and more uncertainty for workers.

Alternatives to the gig economy

Several on-demand economy platforms, including Lyft, Etsy, and Handy, but not Uber, made waves earlier this year when they joined a growing call to create a third category of workers apart from independent contractors (as all gig workers are currently categorised), and employees. A key differentiation would allow for a flexible safety net of transferable benefits, though details on how this would be administered weren’t clear.

For Kelly Ross, Deputy Policy Director with the US labour confederation the AFL-CIO, these efforts may not impact contractors, but instead, may just move workers away from the full protections of being an employee, while doing little to actually aid gig workers.

"What they are proposing is to take away protections for workers, to make workers who are now employees into independent contractors, and that’s not something that we can support," said Ross.

What Ross would like to see are stronger provisions made to improve the status of independent contractors, including allowing for collective bargaining rights. He believes that current laws, along with moves like Seattle’s, are sufficient to address the needs gig workers who do, in fact, work close to full-time hours.

“[Gig] workers should be employees, they are employees. They should not be categorised as independent contractors," said Ross. “If we were talking about people who are independent contractors, and thinking of ways to give them more rights and protections, then yes, that makes sense.”

The AFL-CIO has released a set of principles for the on-demand economy which includes portable benefits, social inclusion, and safeguarding the employee-employer relationship. If adapted, they believe these will allow for an on-demand economy that respects workers’ rights.

In fact, such a model already exists, in a field where unions are strong, but full-time work is rare, leaving most work done through gigs. This is the performing arts industry, where for decades, unions such as the American Federation of Television and Radio Artists have provided benefits for workers who are engaged by various clients.

"Lots of performers have several different employers during a year—their unions have evolved systems to collect benefit payments from all those employers, and are then responsible for providing healthcare for covered workers," said Sipp. That model could be adapted for the on-demand economy.

For now, Uber has vowed to fight back on the Seattle case, and experts are divided on whether the regulations will stand. At the same time, it might be too late – the communication technology that made Uber, Lyft, Taskrabbit, and the entire on-demand economy possible, is rarely used by workers and unions to organise for better rights. That, more than anything else, might herald a true transformation of the gig economy.

"Unions or other coop-type organising efforts will be most successful if they figure out how to be the aggregator of benefits and political advocacy for workers," said Sipp. "It’s not too hard to imagine a tech platform that works with a group of gig economy workers to bring their employers to the table and figuring out solutions to meet the workers’ needs."