The complaints allege that workers at the on-demand startups are employees and not independent contractors
Three more companies in the exploding on-demand economy have been sued over their labor practices, a day after it emerged a class action lawsuit was pending against grocery startup Instacart.
The lawsuits filed on Thursday contend that workers for house-cleaning company Homejoy, as well as delivery service companies Postmates and Try Caviar, have been misclassified as independent contractors when they should be treated like employees. The class action complaints were filed in California’s Northern District Court, where similar lawsuits are already pending against Uber, Lyft and Instacart.
Postmates and Try Caviar are both primarily in the business of facilitating delivery from restaurants that don’t normally deliver. Customers places orders for food through their apps and orders are dispatched to couriers who pick up and deliver the food to the customers’ homes or offices, using their own personal transportation. On Wednesday, Postmates announced it had partnered with Starbucks to deliver food and beverages in Seattle.
The cleaners working for Homejoy use their own cleaning supplies and transportation to do jobs they get through Homejoy. The companies take a cut of the proceeds, whether a fare, an hourly wage or delivery fee.
The lawyer behind many of the cases is Shannon Liss-Riordan, a Boston-based labor lawyer who specializes in worker classification. She first filed the case against Uber on behalf of drivers in 2013, which claims thousands of workers in California are owed for expenses like gas and vehicle maintenance.
The publicity from that case has put her much in demand from people working similar jobs at other startups who believe they are being treated unjustly, she says. Today she filed separate class action complaints on behalf of workers for those three San Francisco-based companies. If the court approves the class, the suits could potentially affect thousands around the U.S.
“When companies have control over their workers, when they get to dictate how they should act, when they get to decide whether they can work or not work,” Liss-Riordan says, “those are employees. These are the workers carrying out the services that these companies provide. So these workers are entitled to the protections of the law, to get their expenses reimbursed, to be guaranteed overtime, to make [at least] minimum wage.”
Homejoy and Postmates did not immediately respond to requests for comment for this article. Try Caviar declined to comment, as did Instacart about its own pending litigation.
One of the key issues in the case is determining exactly what business these companies are in. These on-demand companies say they are merely middle-man technology companies connecting people who want a service with someone willing to provide it. Homejoy, for instance, bills itself as a marketplace where people willing to clean homes can connect with people who want their homes cleaned through their platform. Its terms of service are explicit:
THE COMPANY DOES NOT PROVIDE CLEANING SERVICES, AND THE COMPANY IS NOT A CLEANING SERVICE PROVIDER. IT IS UP TO THE THIRD PARTY CLEANING SERVICE PROVIDER TO OFFER CLEANING SERVICES WHICH MAY BE SCHEDULED THROUGH USE OF THE SOFTWARE OR SERVICE.
But other marketing materials and advertisements often send conflicting messages. Homejoy uses first person pronouns on their website, telling potential users: “If you’re not 100% satisfied with your cleaning, we’ll come back and re-clean it!” If Liss-Riordan can prove in court that companies like Homejoy and Uber are in fact cleaning companies or transportation companies and not just middle-men that could help convince the courts that the workers are in fact employees.
“You can’t name yourself out of employer status,” says Harvard law professor Benjamin Sachs. “The realities matter because if Uber is really a transportation company—and by that we mean they’re involved in many aspects of actually providing rides, screening drivers, hiring drivers, setting rates—that’s like a taxi company with a new technology. That doesn’t change anything important about the nature of employment.” Uber has said it doesn’t comment on pending legislation.
The complaints contend that workers for each of the platforms are owed reimbursements for expenses like vehicle maintenance, cleaning supplies and gas they used to get from job to job, as well as overtime and in some cases minimum wage. The suits against Postmates and Try Caviar also contend that the companies are unfairly competing, by not paying for expenses that delivery companies with employee couriers would, like unemployment insurance or workers’ compensation.
“There seems to be this new wave of companies coming up that seem to be copying one another and thinking that it’s okay to do this because they call themselves technology companies,” Liss-Riordan says. “There’s nothing new about this. These workers should be entitled to the protections of employees.”