San Francisco District Attorney Chesa Boudin is suing DoorDash over misclassifying its delivery drivers and couriers as independent contractors, rather than employees, according to TechCrunch. The lawsuit seeks for DoorDash to stop classifying its workers as such or face a $2,500 fine for each violation.
According to the suit:
“DoorDash’s misclassification of its Dashers was no mistake, but instead a calculated decision made to reduce the costs of doing business at the expense of the very workers providing the company’s core service of delivery: the delivery of merchandise from merchants to customers.”
The suit comes months after California’s AB 5 was signed into law. AB 5 lays out exactly which types of workers can be classified as independent contractors, using the ABC test as criteria. As the suit outlines, DoorDash’s workers don’t meet the criteria in the ABC test to be considered independent contractors. Instead, they should be assumed to be employees with the same access to healthcare, workers comp, overtime pay, and other benefits W-2 employees receive.
The issue of benefits for gig workers is an especially hot-button one right now, thanks to the pandemic. Gig workers delivering restaurant meals and/or groceries have so far been considered “essential” and allowed to continue making deliveries during shelter-in-place mandates. That put a lot of food on consumers’ tables, but it also put workers’ health at risk. As contractors, those workers don’t have automatic access to healthcare of paid sick leave. As one worker said at the beginning of the crisis, “Staying home won’t pay the bills.”
To be fair, most third-party delivery services responded to the issue back when the pandemic first accelerated, offering some financial compensation for workers affected by COVID-19. Other moves to better protect workers have been the result of government involvement, as when a New York Court ruled that Postmates drivers were eligible for unemployment during the pandemic.
DoorDash itself has been offering financial assistance through its COVID-19 Financial Assistance program. Dashers impacted by the pandemic can submit a claim and be eligible for up to two weeks of assistance. And the company recently entered into a public-private partnership with the Pennsylvania Office of the Attorney General to further expand financial, healthcare, and childcare assistance to Dashers.
All those efforts are specific to the pandemic, though. Boudin’s lawsuit seems aimed at the long-term situation of Dashers and other gig workers, and what protections they can receive when there isn’t a global health crisis in play.
Not every worker wants to be classified as an employee, though. A slew of responses to one of Boudin’s tweets this week shows that some gig economy workers prefer to be contractors. “Most of us drivers want to remain Independent Contractors because of the flexibility and because [w]e make more than minimum wage,” wrote one. Another responded that “As an independent contractor I’m outraged that you’re taking away my flexibility to barely afford to pay my health bills even though I’m working seemongly [sic] nonstop for the same one or two companies.” And in the words of another, “We didn’t fucking WANT relief. All he will accomplish here is making us unemployed and homeless.”
Plenty of other gig workers are in favor of laws like AB 5 (“Thank you! They stole my tips!” one person responded to Boudin’s tweet).
For third-party delivery services, turning contract workers into employees would be an expensive endeavor — more expensive even than spending $90 million to fight AB 5, which is exactly what DoorDash, along with Uber and Lyft, pledged to do. Having to pay workers health insurance, overtime, and sick leave would further erode these companies’ chances of profitability, which is another major issue in the gig economy world.
It recently came to light that DoorDash is near closing a new round of funding that would value the company at over $15 billion. The company filed to go public last year and, according to sources, is still planning on a listing for 2020. That would make the profitability issue even more pressing for the third-party delivery service, so we can expect DoorDash to continue fighting hard against AB 5.