To Hillary Clinton, Uber is a double-edged sword

In a speech Monday focused on economic policy, Democratic candidate Hillary Clinton spoke out on what she saw as the double-edged sword that characterizes startups like Uber, Airbnb or Instacart. Companies operating in this "gig" economy, she said, are innovative because they make it easy for people to make money by driving their own car, or renting out a spare room in their home.

But the companies' services are raising hard questions about how to compensate the people who drive those cars, and what the next generation of "good jobs" will look like, Clinton said. She didn't mention Uber or AirBnB by name but was discussing their general business model.

"If you work hard, you ought to be paid fairly," she said, referring to her larger plan to grow the economy by improving workplace protections and raising wages for workers like teachers, nurses and truck drivers. She spoke at The New School in New York.

In Clinton's mind, fair pay should be extended to people who provide services to users of on-demand apps, and she offered a stern warning to technology executives who disagree.

"I'll crack down on bosses who exploit employees by mis-classifying them as contractors or even steal their wages," said Clinton, who announced in April that she was running for president.

Her comments come as questions around the classification of on-demand workers, and the benefits they should receive, reach fever pitch. With Clinton weighing in, fair pay for on-demand workers could become a hot button issue in next year's presidential election.

While people who drive or provide delivery services for companies like Uber are largely classified as independent contractors, legal battles are now underway, and the outcome might give the workers employee status. By classifying the workers as employees, companies would be required to provide benefits like Social Security, health care, paid time off, or reimburse workers' expenses.

The issues could have far-reaching ramifications for how the companies do business, or potentially force them out of business. Added costs tied to the classification might also translate into higher prices for customers.

Some companies, like Instacart, have already made changes to how they classify contractors. Last month, the grocery delivery service said it would give some of its contractors the option to classify themselves as part-time employees.

Last month, the California Labor Commission ruled that a single Uber driver was an employee when she was driving for the company, after the driver sued Uber claiming she was owed unpaid wages and car expenses.

Other presidential candidates take a different stance. After Clinton made her remarks on Monday, Republican candidate Senator Rand Paul was quick to condemn them.

"Services like Uber, Airbnb and Lyft stimulate our economy and work towards lower prices. How is this bad" he asked on Twitter.

The U.S. shouldn't take advice on the sharing economy from someone who has been driven around in a limo for 30 years, he added, in a jab at Clinton.

Republican candidate Jeb Bush, meanwhile, criticized Clinton's larger economic plan. Her plan does nothing to help U.S. workers trapped in part-time jobs, he said.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com