Several years ago the company Munchery, a food delivery service, switched from contracted drivers to regular hires. Despite the lower upfront costs associated with contracted employees, the company found that employee turnover was very high and decided to make the switch. While the switch cost the company an additional 20% to 30%, executives say the decision has nearly paid for itself. Many on-demand companies have decided to make this switch because of the stable workforce it provides.
See "A Middle Ground Between Contract Worker and Employee", Naom Scheiber, December 10, 2015