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> it may actually be cheaper for you to hire someone for 8 hours a day to do your chores. Whatever math calculation one does, it has to factor in the hassle of

by jasode 10y ago

> it may actually be cheaper for you to hire someone for 8 hours a day to do your chores. Whatever math calculation one does, it has to factor in the hassle of becoming an "employer" which is a complication that most consumers don't want. E.g. If you pay someone more than $36 a week[1], a law-abiding tax payer would have to file a W2 to the IRS reporting the income. (Yes yes, most parents don't actually file W2 for their neighborhood babysitter but that's technically "tax evasion".) You can legally circumvent the W2/employer relationship by using an agency and that staffing firm becomes the "employer of record." However, there's no such thing as a free lunch and that agency has its own 50% to 100% markup on the personal assistant's hourly rate. This gets right back into Instacart pricing territory or even exceeds it. Without any survey data, I'm guessing that there's a huge market of customers willing to pay Instacart profit margins instead of becoming an "a W2 employer" or paying 3rd-party agency. [1] http://www.usatoday.com/story/money/personalfinance/2013/04/07/nanny-tax-domestic-help-irs/2045517/ http://www.usatoday.com/story/money/personalfinance/2013/04/...

true_religion 10y ago
As an employer, W2 forms aren't terrible hard to fill out and I don't know why everyone seems so scared of them. People have had this viewpoint that filing taxes is 'hard', but recent improvements have made it 100% electronic and really cut down on the effort needed to compile it legally. And then of course, no one would pay a babysitter a W2. You'd count them as a 1099, but not need to file till they made more than 10,000 a year. What's more interesting is having an actual employee though who can do nannying, picking up dry cleaning, and all of the other personal chores you just put off or have apps do. They're your personal assistant, and honestly if filing taxes is a hassle for you, you can have them fill out the forms because what else are assistants for?
- jasode 10y ago
  >As an employer, W2 forms aren't terrible hard to fill out You're taking my example too literally. The "W2 filing" is shorthand for all the extra legal complications such as withholding taxes, paying employer's portion of Social Security, Medicare, and any state mandated payments such as worker's comp, etc. All of that is a big leap of complexity compared to just pushing a few buttons on an iPhone and getting a service-on-demand. >And then of course, no one would pay a babysitter a W2. You'd count them as a 1099, Unless the IRS (or even the babysitter) wants to reclassify the relationship as W2 instead of 1099.[1] Now the consumer owes back taxes (and possibly penalties) which is more complicated (and more expensive) than using a phone app. >What's more interesting is having an actual employee Sure but probably 95%+ of consumers who want to periodically use Instacart / Uber / Blue Apron / etc do not want jump to the next level of complexity with an actual employer+employee relationship. The threshold for inflicting that bureaucracy on oneself is high. Lastly, the extra employee taxes a consumer would have to pay makes the W2 relationship more expensive than a naive calculation would suggest. [1] https://www.nytimes.com/2015/03/14/your-money/contract-worker-or-employee-tax-liability-rests-on-the-difference.html https://www.nytimes.com/2015/03/14/your-money/contract-worke...

by jasode 10y ago

true_religion 10y ago

As an employer, W2 forms aren't terrible hard to fill out and I don't know why everyone seems so scared of them. People have had this viewpoint that filing taxes is 'hard', but recent improvements have made it 100% electronic and really cut down on the effort needed to compile it legally. And then of course, no one would pay a babysitter a W2. You'd count them as a 1099, but not need to file till they made more than 10,000 a year. What's more interesting is having an actual employee though who can do nannying, picking up dry cleaning, and all of the other personal chores you just put off or have apps do. They're your personal assistant, and honestly if filing taxes is a hassle for you, you can have them fill out the forms because what else are assistants for?

jasode 10y ago
>As an employer, W2 forms aren't terrible hard to fill out You're taking my example too literally. The "W2 filing" is shorthand for all the extra legal complications such as withholding taxes, paying employer's portion of Social Security, Medicare, and any state mandated payments such as worker's comp, etc. All of that is a big leap of complexity compared to just pushing a few buttons on an iPhone and getting a service-on-demand. >And then of course, no one would pay a babysitter a W2. You'd count them as a 1099, Unless the IRS (or even the babysitter) wants to reclassify the relationship as W2 instead of 1099.[1] Now the consumer owes back taxes (and possibly penalties) which is more complicated (and more expensive) than using a phone app. >What's more interesting is having an actual employee Sure but probably 95%+ of consumers who want to periodically use Instacart / Uber / Blue Apron / etc do not want jump to the next level of complexity with an actual employer+employee relationship. The threshold for inflicting that bureaucracy on oneself is high. Lastly, the extra employee taxes a consumer would have to pay makes the W2 relationship more expensive than a naive calculation would suggest. [1] https://www.nytimes.com/2015/03/14/your-money/contract-worker-or-employee-tax-liability-rests-on-the-difference.html https://www.nytimes.com/2015/03/14/your-money/contract-worke...