SAN DIEGO – Online grocery shopping app Instacart says that it complies with the law and will “vigorously defend” itself in a lawsuit filed by the City of San Diego.
Mara W. Elliott, City Attorney for San Diego, recently filed an 11-page complaint against Instacart. In the court document, Elliott argues that Instacart should call its shoppers employees rather than independent contractors.
This difference in classification is important when it comes to the benefits workers can receive and the tax obligations of companies who use "gig" workers.
Mara W. Elliott, attorney for the City of San Diego
| City of San Diego
Instacart provides a service in which shoppers buy and deliver groceries that have been ordered using the app. It is a convenient service or customers, who have their orders delivered to their doors for a fee.
However, Elliott argues that Instacart takes advantage of its workers by classifying them as independent contractors. She says that Instacart shoppers are responsible for much of the cost of buying and delivering groceries because they use their own vehicles for deliveries and are thus responsible for maintenance, repair, insurance and registration.
They must also pay for gas and parking fees, Elliott argues. Because the system relies on using a phone-based app, shoppers must also bear the cost of maintaining a smartphone and phone plan.
The lawsuit says that these workers should be considered employees, meaning they should be paid at least minimum wage. Also, Instacart would be responsible for paying unemployment and disability insurance taxes as well.
“We comply with the applicable laws and will vigorously defend ourselves,” Instacart spokeswoman Natalia Montvalo said. "We remain committed to working with the governor, legislators, labor advocates and the voters of California to advocate for a better solution for independent work that benefits all Californians.”
The state legislature recently passed a bill that would reclassify independent contractors and similar workers in the gig economy as employees.
San Diego submitted its complaint to California Superior Court on Sept. 13, three days after the bill was passed.