Tag Archives: Instacart

California Court Affirms Right To Treat Uber And Lyft Drivers as Contractors

Uber Technologies Inc., Lyft Inc. and other companies scored a victory with a California court ruling that preserves their independent contractor model in the state and could boost their efforts to maintain that model elsewhere, The Wall Street Journal reported.

A state appeals court reversed a lower-court ruling that found a California ballot measure known as Proposition 22 illegal. Proposition 22, which passed in November 2020, allowed these companies to continue to treat their drivers as independent contractors.

According to the Wall Street Journal, Uber and others are in a global tug of war with regulators over whether and how to grant more benefits such as paid sick leave and health insurance to workers in the so-called gig economy, where apps distribute individual tasks to a poll of people whom companies generally regard as independent contractors.

California sued Uber and Lyft in 2020, saying they were in violation of a new state law that sought to reclassify their drivers as employees. A legal battle ensued, culminating in Proposition 22, in which Uber, Lyft, DoorDash Inc. and Instacart Inc. asked state voters to exempt them from the law. The companies spent a record amount of money for a California ballot measure, about $200 million.

The New York Times reported that the decision by three appeals court judges overturned the ruling late last year by a California Superior Court judge, who said the Proposition was “unenforceable.” It was a victory for companies like Uber, which use gig drivers to transport passengers and to deliver food, but does not pay costs that an employer would have to. Those costs can include drivers’ unemployment insurance, health insurance, and business expenses.

According to The New York Times, the appeals court ruling was not the final say. The Service Employees International Union, which, along with several drivers, filed a lawsuit challenging Proposition 22 in early 2021, is expected to appeal the decision to the California Supreme Court, which would then have several months to decide whether to hear the case.

The opponents of the proposition argued that the ballot measure was unconstitutional under several grounds. It set limits on the State Legislature’s ability to oversee workers’ compensation for gig drivers. It included a rule restricting them from collective bargaining that critics said was unrelated to the rest of the measure, and it set a seven-eights majority vote of the Legislature as a bar for passing amendments to the measure related to collective bargaining – a requirement that was considered nearly impossible to achieve.

CNBC reported that Proposition 22 created a set of criteria which determined whether ride-share drivers were employees or independent contractors. In practice, it exempted Uber and similar companies from following certain minimum wage, overtime, or workers compensation laws for hundreds of thousands of Californian rideshare drivers.

Instead, according to CNBC, the ballot measure required companies to provide compensation and healthcare “subsidies” based on “engaged” driving time, as well as the benefits, including safety training as “sexual harassment training.”

To me it sounds like Uber, Lyft, DoorDash, and Instacart are desperately trying to suppress drivers ability to form a union, (also known as “collective bargaining”). Unionization would require the large companies to provide drivers with the same types of benefits that other workers, who have unionized, would be expected to receive. It also make it harder for the big companies to fire them.

Instacart President Carolyn Everson is Leaving the Company

Instacart president Carolyn Everson said Friday she will step down at the end of the year, just three months after she joined the grocery delivery service company, CNBC reported. This comes after Seth Dallaire, head of advertising at Instacart, left the company for Walmart in October.

According to CNBC, Carolyn Everson spent more than 10 years at Facebook as its ads chief. She was seen as one of the most prominent women behind Facebook’s COO Sheryl Sandberg, but left the company after Marne Levine – not Everson – was promoted to chief business officer last summer.

The decision to leave Instacart appears to be a mutual one between Carolyn Everson and the company. CNBC reported that Carolyn Everson posted on Facebook that, as her 50th birthday approaches, she will take time off before deciding on her next step.

The ability to quit a job, and then take time off to figure out what to do next, is a privilege. My best guess is that most Instacart drivers are not paid enough to be able to take time off in the way that Carolyn Everson can. The Wall Street Journal reported she had only been at Instacart for four months.

Instacart told The Wall Street Journal that they wouldn’t replace Ms. Everson at this time, and declined to comment further.

Ms. Simo wrote Friday that the company’s current leadership team can take on more roles, and that there was a “mismatch” between Instacart’s priorities and what Ms. Everson was looking for. Ms. Simo wrote that Ms. Everson’s departure gives the company an opportunity to make organizational changes that will put it in a better position.

It is unclear what Instacart will do next. Personally, I think the company should focus on how Instacart can help people who have disabilities to get groceries. We are still in a pandemic, and it can be very risky for people who are immune-compromised to shop in person (where some people aren’t wearing masks). Instacart needs to continue service as it has been – and without an increase in price.

Instacart will Compensate Workers for Stolen Tips

The tips you gave to the Instacart workers who brought groceries to your door probably did not go to them. Sometimes, it takes a class-action lawsuit to influence a company to do something it should have been doing in the first place. The result is that Instacart will stop stealing the tips that consumers give to Instacart workers.

NBC News reported that the complaint in the lawsuit alleges that Instacart “intentionally and maliciously misappropriated gratuities in order to pay plaintiff’s wages even though Instacart maintained that 100 percent of customer tips went directly to shoppers. Based on this representation, Instacart knew customers would believe their tips were being given to shoppers in addition to wages, not to supplement wages entirely”.

In a post on Medium, titled “State of Pay – Doing Right By Our Shoppers” Instacart provided information about what happened and the changes it will make. From the Medium post:

After launching our new earnings structure this past October, we noticed that there were small batches where shoppers weren’t earning enough for their time. To help with this, we instituted a $10 floor on earnings, inclusive of tips, for all batches. This meant that when an Instacart’s payment and the customer tip at checkout was below $10, Instacart supplemented the difference. While our intention was to increase guaranteed payment for small orders, we understand that the inclusion of tips as part of this guarantee was misguided. We apologize for taking this approach.

Instacart will retroactively compensate workers for when their tips were included in minimums. “For example, if a shopper was paid $6 by Instacart, to compensate for our mistake, he or she will receive an additional $4 from Instacart”.

In addition, Instacart is instituting a higher minimum floor payment on all batches. Today their minimum batch is $3. Depending on the region, the new minimum batch payment will increase to between $7 and $10 for full service batches and $5 for delivery only batches. “Any tips earned by shoppers will be separate and in addition to Instacart’s contribution.”