In light of a potentially game-changing lawsuit, some San Francisco companies have begun moving away from the contractor-only business model in ways that will benefit Bay Area job seekers. On September 1, U.S. District Court Judge Edward Chen ended a two-year long court battle by ruling that certain California Uber drivers have the right to file a class-action suit against the San Francisco-based company. The drivers argue that they are entitled to reimbursement expenses and other benefits as they are employed by the online taxi service. Uber contends that its drivers are merely independent contractors. If the plaintiffs win their case, on-demand companies that hire contractors, but not employees will have to change the way they do business.
In August, the San Francisco Chronicle reported that online grocery delivery service Instacart added 250 new part-time shopper positions in the Golden City. Previously, the company’s Bay Area shoppers have all been independent contractors. Andrea Saul, Instacart’s vice president of communications, said that the company made the change as part of its long-term development. “We want to integrate these shoppers into our culture so they could grow with the company,” said Saul. A January 2015 filed classification suit against Instacart likely played a part in the company’s decision. An estimated 20 to 30 percent increase in labor costs probably won’t be as big a financial drain as the kind of classification suit that brought down Homejoy in July of this year.
Instacart isn’t the only San Fran company to change its hiring practices in the wake of these high-profile classification suits. Food delivery service Sprig has also begun converting its independent contractors into employees. Gagan Biyanii, Sprig’s founder and CEO, said he made the change as an investment in his company’s future. “This lets us do training and development for our servers, and reward them for their hard work by providing stock options to top performers,” Biyanii told the Chronicle. Billion dollar on-demand companies like Instacart and Sprig becoming interested in employing talented salespeople is yet another sign that the San Francisco job market is stronger than it has been in decades.
Mario McKellop is a freelance writer who has covered the pop culture beat since 2010.