Same-day delivery platform Instacart, which reportedly plans to go public later this year, has agreed to pay $45.6 million to settle a gig worker case filed by the city of San Diego in 2019, the city’s attorney announced Monday.
The proposed judgment against Instacart covers approximately 308,000 people who worked for the company from September 2015 through December 2020. Restitution will be based on how many hours each person worked during that time, San Diego City Attorney Mara W. Elliott said in a statement. For the most-active workers, payments could total thousands of dollars.
Instacart, in a statement to WGB, said its settlement with the city is not an admission of wrongdoing.
"We’re pleased to have reached an agreement with the City of San Diego," the company said. "Instacart has always properly classified shoppers as independent contractors, giving them the ability to set their own schedule and earn on their own terms. We remain committed to continuing to serve our customers across California while also protecting access to flexible earnings opportunities for Instacart shoppers.”
At issue in the case is whether Instacart shoppers are employees or independent contractors under California law.
“We are pleased to get justice for these delivery workers, who, at the height of COVID-19, provided an invaluable service to California households,” Elliott said. “My office will continue our fight for the rights of workers statewide. We hope other gig-economy companies will also do right by their workers.”
On Tuesday, the U.S. Department of Labor unveiled a proposal that could reclassify many independent contractors, which are relied upon by Instacart, DoorDash, Uber Eats and other grocery delivery services and ride-sharing companies, as employees.
Included in the proposal are six criteria that would determine whether a worker is an independent contractor or an employee, including whether a worker control their opportunity for profit or loss; the extent of a worker’s investments; the work relationship’s degree of permanence; how much the employer controls a worker’s schedule; whether the work is integral to the business; and a worker’s level of skill and initiative.
In the case of Instacart in San Diego, workers were responsible for maintaining and using their own vehicles, using their own phones and paying for masks, gloves and other equipment to protect against COVID, the city said. The settlement covers those expenses, among others.
Instacart said it provided protections to its shoppers at the start of the pandemic, including health-and-safety kits that included personal protective equipment such as face masks, hand sanitizer and a thermometer.
Instacart’s settlement also includes more than $6 million in civil penalties, which will go into a Consumer Protection Trust Fund to be used to enforce applicable laws, the city said.
This story has been updated to include a statement from Instacart.