Online grocery delivery service company Instacart said today it is expanding its offer of staff jobs—already made in nine other cities—to contract workers who now assemble food orders for its customers in San Francisco, San Jose, and Los Angeles.
San Francisco-based Instacart had previously invited its in-store shoppers to apply for part-time jobs rather than continuing as contractors in Boston, Atlanta, Austin, Chicago, Houston, Miami, Portland, Seattle and Washington, DC. That leaves four cities where the company says the new policy will also be implemented—Denver, Boulder, Philadelphia and New York.
“We will be making announcements in those cities within the next month,” Instacart vice president of communications Andrea Saul told Xconomy in an e-mail exchange.
Instacart’s actions are taking place against a backdrop of ongoing conflicts between labor advocates and “sharing economy” tech companies such as Instacart and on-demand ride service Uber, which are being pressured by workers and government agencies to recognize their workers as employees.
Saul says Instacart’s actions do not amount to a concession that the company had illegally misclassified its in-store shoppers as independent contractors to save money on such employee costs as overtime pay and benefits—an allegation made in a class action lawsuit still pending in federal court in San Francisco. Similar complaints have been made against other tech companies, including Uber.
“The part-time employee roles that will be in stores now are new roles,” Saul says. “We have expanded the responsibilities of the shopper and added training, oversight, and supervision.”
Federal and state laws define what workers qualify as independent contractors, and which should be taken on as employees. The analysis often turns on the amount of supervision and control the employer exercises over the worker’s time and actions during a work period.
Instacart says its new hiring practices have already yielded benefits for the company and customers, because the shoppers have been better trained to pick produce and other items faster, and more deliveries have been on time.
But the attorney representing Instacart contractors in the lawsuit against the company says he thinks Instacart has recognized it couldn’t legally define those workers as contractors.
“They know they’re wrong,” says Robert Arns of the Arns Law Firm in San Francisco.
The hiring changes Instacart announced don’t solve the problem, Arns says. Some of the contractors were working 60 hours a week, he says. He suspects that Instacart is now offering the workers part-time jobs to avoid having to pay for the medical insurance that is often provided to full-time employees.
“To me that’s just as bad as the previous situation,” Arns says. “This tech company is taking every step they can not to provide people with proper employment.”
In the civil complaint filed early this year against Instacart, the Arns firm is seeking back pay, lost overtime pay, and unreimbursed expenses for as many as 12,000 Instacart shoppers and delivery drivers, Arns says. The unpaid expenses claimed include mileage for the use of the workers’ own cars; the cost of their smartphones and phone plans, which are used to communicate grocery orders; and vehicle insurance. Arns says he hasn’t calculated the total amount, but called it “substantial.”
Instacart says its new staff job opportunity has been
