In new lawsuit, Instacart shoppers say they were regularly underpaid

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(credit: Kristin Sloan)

On Thursday, 12 Instacart “shoppers” across 11 states filed a proposed federal class-action lawsuit against the San Francisco startup, alleging a breach of state and federal labor laws.

The Instacart lawsuit is one of several currently targeting so-called “sharing economy” startups, and they all get at the same question: can workers be accurately classified as independent contractors, or should they properly be designated as employees? In Instacart’s case, customers order groceries online, but those groceries are then picked up and delivered by the company’s shoppers. So, should those shoppers be treated as employees?

Classifying such workers as employees rather than contractors would entitle them to a number of benefits under federal law. This includes unemployment benefits, workers’ compensation, the right to unionize, and, most importantly, the right to seek reimbursement for mileage and tips. This reclassification would also incur new and significant costs for Instacart and other affected companies, including Uber and Lyft. An on-demand cleaning service, Homejoy, shut down last year just months after it was hit with a similar labor lawsuit.

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