Instacart Is Losing Its Argument That Contractors Aren’t Employees

Gig companies are losing the battle in court.

Levine Roberts/ZUMA

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Last year, San Diego City Attorney Mara Elliott sued Instacart—the nearly $8 billion dollar grocery delivery service for misclassifying employees as independent contractors. Late Monday, a state judge agreed, ruling that shoppers in San Diego should likely be considered full-time employees.

That is a big deal. As I’ve written about before, Instacart has tried to weasel out of employer status by arguing it’s a “platform,” a common Silicon Valley turn of phrase to get out of the burden of employer status: health insurance, overtime laws, unions. And it’s even engaged in union-busting in Illinois when a few employees were organizing. (The union was eventually approved.) In the San Diego case, Instacart argued that the shoppers who purchase groceries for delivery are not really employees of the company, and thus, aren’t subject to employee benefits. Superior Court Judge Timothy Taylor disagreed, ruling that the City Attorney would be able to prove the shoppers “perform a core function of defendant’s business.” Judge Taylor granted the city a preliminary injunction in the case, which will take effect on February 28.

This order joins a decision earlier this month, from a federal judge, denying Postmates and Uber’s request to stop enforcement of AB5, the California law making it harder for companies to rely on contract labor.

AB5, which codified precedent set by the state Supreme Court in 2018, has been extremely controversial. Companies have used the law to say they were forced to fire workers; truckers have sued the state; freelancer writers have come out in opposition (even rallying in Sacramento). There is a ballot measure backed by major gig companies to work around AB5 for drivers. A slew of changes to AB5, both from the sponsor and from those who hate it, are appearing in the California legislature.

But increasingly, it’s looking like gig companies are losing the battle, at least in court.

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You expect the big picture, and it's our job at Mother Jones to give it to you. And right now, so many of the troubles we face are the making not of a virus, but of the quest for profit, political or economic (and not just from the man in the White House who could have offered leadership and comfort but instead gave us bleach).

In "News Is Just Like Waste Management," we unpack what the coronavirus crisis has meant for journalism, including Mother Jones’, and how we can rise to the challenge. If you're able to, this is a critical moment to support our nonprofit journalism with a donation: We've scoured our budget and made the cuts we can without impairing our mission, and we hope to raise $400,000 from our community of online readers to help keep our big reporting projects going because this extraordinary pandemic-plus-election year is no time to pull back.

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