Instacart now offering workers employee status in nine cities

Instacart is rapidly expanding its worker reclassification efforts, extending the option to become a part-time employee — rather than an independent contractor — to workers today in Portland and Seattle.

In June, Instacart, the San Francisco-based grocery delivery service, became one of the first tech startups to convert a large portion of its contractor workforce to employees. Beginning with staff in Chicago and Boston, Instacart has extended workers the option to become part-time employees, working 20 to 30 hours per week and receiving benefits including unemployment, Social Security and Medicare.

The addition of Portland and Seattle brings the total number of cities where Instacart has offered worker reclassification to nine — more than half of its markets. Instacart has employees in 16 cities. The company also has part-time employees in Atlanta, Miami and Washington, D.C., Houston and Austin.

Instacart had not offered a timeline for worker reclassification and did not say when Bay Area Instacart workers would have the option to become employees. The speed of the change thus far, however, exceeds many analysts’ expectations.

The change applies to contractors who are based at a grocery store that partners with Instacart and shop for groceries ordered through the company’s app. A single Instacart worker used to perform both the shopping and home delivery of a grocery order, but the company found it could deliver more quickly, and with better results in customer satisfaction, by splitting the jobs.

Instacart started four-month pilot in Boston to find out if there were benefits to making those shoppers part-time employees. The company soon found perks to training and supporting workers, which it couldn’t legally do with independent contractors — well-trained employees could ensure that avocados are ripe, bananas aren’t squashed and eggs aren’t cracked before being delivered to a customer, leading to fewer returns and happier customers. And workers with a consistent schedule learned a store’s layout and were quicker at picking items, reducing the time between order and delivery.

“Making our in-store shoppers employees has helped on multiple fronts,” Apoorva Mehta, founder and CEO of Instacart, said in a statement.

About three-quarters of in-store shoppers have opted to apply for these part-time employee positions, the company said. Instacart says it offers competitive wages that exceed the local minimum wage in each of its markets.

Delivery drivers will remain independent contractors.

The debate over whether the many independent contractors who work for on-demand tech startups — including Lyft, Uber, Postmates, TaskRabbit and myriad other companies that make an app to connect consumers with a service — has accelerated in recent months, becoming a talking point for even the 2016 presidential candidates. Many argue these workers rely on their contract jobs as their sole income, but lack the stability of benefits, particularly health care. And as contractors, they aren’t reimbursed for their expenses — such as mileage and car repairs — and don’t qualify for unemployment if they can’t work.

However, the California Labor Commissioner ruled last month that a former Uber driver who filed a claim was an employee of the company, not an independent contractor, and Uber must pay her $4,152 in tolls and mileage. Uber has appealed the decision — the company is due in court next month — and is also fighting a ruling in Florida that classified a former driver as an employee.

Uber is among some companies that say their workers want to keep the flexibility that comes with being an independent contractor. Other companies, however, have changed their stance on independent contractors. On-demand delivery service Shyp recently reclassified its couriers as employees, and on-demand tech support startup Eden is reclassifying its technicians as employees.

Photo: Instacart founder and CEO Apoorva Mehta in the company’s new offices South of Market in San Francisco, Calif., on Friday, Nov. 15, 2013. By Laura A. Oda/Bay Area News Group.


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