Employment status and the on-demand economy: a natural experiment on reclassification.

This article examines the impact of shifting gig workers from independent contractors to employees within a US-based package delivery platform, referred to as BringYourPackage (BYP), using a natural experiment created by California’s AB5 law. The study analyzes operational data and interviews to assess changes in work scheduling flexibility, hours worked, and the firm’s labor deployment efficiency. Findings indicate that after the transition to employee status, BYP maintained scheduling flexibility, increased drivers’ average working hours—especially among low- and mid-volume drivers—and improved the alignment between scheduled and actual working time, reflecting greater operational efficiency. The research suggests that employment status can coexist with platform business models without necessarily reducing worker autonomy, challenging common claims by platform firms that employment is incompatible with gig work.