The real reason that only a couple have touched upon, at least in the US, is because in the last 20 years the tax rules changed. The IRS put the onus on the hiring company to pay taxes if the contractor didn't pay their taxes. That's a huge burden, which is why most larger companies will go with well known companies that can take on that liability. 20 years ago, this didn't happen so it was easier to hire a single contractor but now the tax liability has forced many companies to change their policies permanently to only hiring from larger contracting companies that can ensure that taxes are paid.