I also had to engage with this bodyshop arrangement. Heard a fellow contractor referring to it as "paying the pimp", which I guess has some similarities.
It's worth noting that you can usually contract directly with a company as long as you maintain scoped part-time contracts with multiple companies, instead of a single open-ended long-term contract with a single company. It's true that independent contractors are somewhat disadvantaged by this whole setup, but we should also recognize that voluntary independent freelance contracting of this type is quite a privileged position and it's good our desired style of work isn't being used to undermine the rights of W-2 employees.
It's worth noting that you can usually contract directly with a company as long as you maintain scoped part-time contracts with multiple companies, instead of a single open-ended long-term contract with a single company. It's true that independent contractors are somewhat disadvantaged by this whole setup, but we should also recognize that voluntary independent freelance contracting of this type is quite a privileged position and it's good our desired style of work isn't being used to undermine the rights of W-2 employees.