SAN DIEGO – Independent contractors typically choose to be part of the "gig" workforce because they do not want to be employees, according to Betty Jo Toccoli, president of the California Small Business Association (CSBA).
At least that’s what Toccoli said in response to a recent lawsuit filed by the City of San Diego against the online shopping app Instacart. San Diego City Attorney Mara W. Elliott is pushing to reclassify Instacart's legion of independent contractors as employees.
In the 11-page lawsuit, Elliott argued that Instacart classifies its workers as contractors to avoid paying minimum wages and employment taxes. This, she argues, is an unfair advantage against other competitors and is a violation of California’s Unfair Competition Law.
Mara W. Elliott, Attorney for the City of San Diego | City of San Diego
Instacart is a shopping app that allows users to buy groceries online and have them delivered to their homes the same day. The company uses shoppers to either buy the food at the store, deliver to the customer or both.
Elliott claims in the suit that these workers are responsible for many of the expenses required to do their jobs, including costs related to cell phone use, car maintenance and upkeep, and parking fees.
The California state legislature recently passed a bill, AB 5, that requires independent contractors to be considered employees. The new law would affect companies like Instacart that rely on gig workers to provide services to customers.
“Many of those classified as independent contractors by the new ruling are actually one-person business owners and they do not want to be an employee,” Toccoli said. “The CSBA will continue to work with the legislators on clean-up of AB 5 in 2020.”
San Diego’s lawsuit against Instacart was filed on Sept. 13 in California Superior Court.