Counsel to platform and on-demand businesses on worker classification, two-sided terms, and the regulatory posture that lets a marketplace scale without the structure giving way under it.
Under the ABC test a worker is an employee unless the platform proves all three prongs, and prong B asks whether the work falls outside the usual course of the platform's business. A delivery company whose product is delivery passes that prong, if at all, on how the operation is designed rather than on argument. The test governs wage law in California and Massachusetts, many states apply it for unemployment insurance alone, and the federal standard has changed with each administration since 2021. Classification is not a conclusion a platform reaches. It is a position the platform builds, and it is tested by a labor agency, a tax authority or a mass-arbitration filing.
We advise platform and on-demand businesses on that position and on everything that leans on it: the provider agreement, the user terms and the flow of funds between them. The Federal Arbitration Act does not reach transportation workers engaged in interstate commerce, a line the Supreme Court has drawn more sharply since 2022, so an arbitration clause written for a whole fleet may bind some providers and not others. We draft for both outcomes.
Advice on contractor-versus-employee classification and the contracts, controls, and operating practices that support a chosen model, with locally admitted counsel coordinated where a jurisdiction's test or enforcement posture requires it.
Entity selection and marketplace architecture for two-sided and on-demand businesses, settling how the platform, its operating entities, and its payment flows are organized so the economics and the liability allocation are clear from the start.
Drafting and negotiating the documents a platform runs on, from terms of service and provider and merchant agreements to fee and payout terms, dispute-resolution clauses, and the consumer-facing disclosures the marketplace must make.
Mapping the regimes a platform touches, among them employment, payments and money transmission, consumer protection, data and privacy, and the sector rules around whatever is delivered, and building a posture that anticipates where a regulator will look.
Venture and growth-capital rounds, strategic investment, and the corporate work that supports them, from papering the raise and structuring the cap table to keeping the platform investable as it scales across markets.
Representation in the commercial disputes and regulatory matters that come with operating at scale, including provider and user claims, contract conflicts, and matters before the relevant regulators, with additional counsel coordinated where a regime requires it.
California fines willful misclassification per violation, with a higher band for a pattern, on top of back wages, unpaid payroll tax and the benefits each worker should have had. The exposure multiplies by headcount, so a platform with ten thousand providers is pricing a class, not a case.
California voters took app-based rideshare and delivery drivers out of the ABC test in 2020, in exchange for an earnings floor, a healthcare stipend and occupational-accident cover, and the state's highest court upheld it in 2024. It covers those two services, so a platform in another vertical inherits the full test.
When thousands of providers file individual arbitration demands, the platform owes the filing fees up front under the major providers' rules, and courts have ordered platforms to pay rather than excuse them from the clause they drafted. The clause has to anticipate mass filing: batching, bellwethers and fee allocation.
Pricing, ratings and deactivation are where control lives. A platform that sets the fare, penalizes declined jobs and deactivates below a rating threshold has supplied the evidence for the control prong, whatever the contract calls the provider. The agency reads the operating model, so the position is built there.
A platform that collects from the customer and pays the provider may be transmitting money unless it is the provider's agent for payment, so the agent-of-the-payee language in the provider agreement settles a licensing question as well as a commercial one. Payout timing and holdbacks follow from it.
New York City and Seattle set minimum pay standards for app-based delivery workers, Seattle added a right to appeal a deactivation, and others are drafting. Each market launch imports a local rulebook on pay, disclosure and deactivation that national terms did not anticipate, which is why expansion runs market by market.
Before a single term is drafted, we map how the platform directs its providers day to day, in scheduling, pricing, ratings, and deactivation, against the classification tests of every launch market, and we set the operating model on the side of the line it can defend.
The provider agreement, the user terms, and the fee-and-payout schedule are drafted as one architecture: who contracts with whom, where the money flows, which disputes go to arbitration, and what the consumer must be told before checkout.
Entities, payment flows, and licenses are put in place market by market, with money-transmission and sector permissions where the service requires them, so a launch is a filing rather than an improvisation and the growth round finds a clean diligence room.
When a labor agency, tax authority, or plaintiffs' demand tests the model, the record is already there: the contracts, the operating controls, and the classification file hold together, and one partner runs the response across every regime it touches.
A platform is a legal position moving at market speed, and we make sure the position arrives first.
A platform business is a marketplace that matches providers with customers and takes a fee, and the law treats it as several things depending on who is asking. To a labor agency it is a putative employer whose classification of its providers is a question of fact. To a tax authority it is a payer that issues information returns and may owe payroll tax if the classification fails. To a state banking regulator it may be a money transmitter, depending on how the payout is structured. To a consumer-protection agency it is the seller of record for whatever the terms say it sells. The legal design has to answer each of those at once, with the same facts, which is why the provider agreement, the user terms and the flow of funds are drafted together.
Because it is one question with several different answers. The IRS applies a common-law control test, the federal wage-and-hour law applies an economic-reality test that has been rewritten more than once since 2021, and California and Massachusetts apply the ABC test, under which the worker is an employee unless the business proves all three prongs. The same driver can be a contractor for one purpose and an employee for another. Getting it wrong means back overtime and unpaid employment taxes, with penalties on top, multiplied by headcount and reaching back several years. We help a platform choose the model it can defend in each market, then build the contracts and the operating controls to match it, with locally admitted counsel where a state's test or enforcement posture requires.
Hart David Carson LLP provides the corporate, commercial, and regulatory counsel a platform business runs on: entity and marketplace structuring, two-sided platform terms and provider agreements, classification strategy, financing and growth-capital work, and the disputes and regulatory matters that come with operating at scale. One partner stays accountable across the whole venture.
Yes. The firm works from Chicago, with offices in London and Dubai through partner firms and a partner network of locally admitted counsel in about 51 jurisdictions. The classification question travels, but the answer does not. The United Kingdom has a third category, the worker, and its Supreme Court placed ride-hailing drivers in it in 2021, with paid holiday and the minimum wage attached. The European Union adopted a platform-work directive in 2024 that presumes employment where the facts indicate control, with member states to transpose it by December 2026. A platform entering those markets needs a model built for each, not a US contract translated, and we coordinate that work with local counsel in each jurisdiction.
Yes. Two-sided platforms live and die on their documents: terms of service, provider and merchant agreements, fee and payout terms, dispute-resolution clauses, and the consumer-facing disclosures a marketplace must make. We draft and negotiate the agreement architecture so the platform's economics, liability allocation, and enforcement rights are clear before a dispute tests them.
We start from where the opening inquiry usually comes, which is an unemployment-insurance claim. A single provider who files for benefits triggers a state audit of how every similar provider was classified, and that audit is often the earliest point at which anyone outside the company reads the operating model. From there we work outward: the labor agency and its wage-and-hour exposure, the banking regulator if the payout looks like money transmission, and the sector regulator for whatever is actually delivered, whether that is food, freight or care. We map that exposure before launch, build the file an auditor will ask for and represent the platform when an agency does ask, with additional counsel where a particular regime requires it.
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Explore →Reviewed by Jonathan D. Herpy, Sr., Senior Partner · Last updated October 2026 · Educational overview · Not legal advice
One partner is accountable for the whole matter, and you have that partner's direct line. Chicago, London, and Dubai work to the same standard.