Instacart reclassifies part of workforce amid pressure on Uber
Instacart, the online grocery delivery service and one of the rising stars of Silicon Valley’s on-demand economy, is converting a large part of its contractor workforce into part-time employees.
The shift comes amid a growing debate over how technology companies such as Uber, Lyft and the delivery service Postmates designate American workers who make a living using their services.
Instacart has about 10,000 shoppers in 16 cities across the U.S., roaming the aisles of retail chains such as Whole Foods Market, Costco Wholesale and Petco, and selecting the fruit, vegetables and other items that customers order via smartphone apps and the San Francisco startup’s website.
Instacart workers who wish to remain independent contractors will have the option to become members of its driver fleet, which ferries goods from supermarkets to customers’ homes.
Apoorva Mehta, Instacart’s founder and chief executive officer, says the change is designed to improve customer service and the quality of items.
The change in its workers’ employment status will require Instacart to pay employment taxes, covering benefits such as unemployment, Social Security, Medicare and workers’ compensation.
Since it was founded in 2012 by Mehta, a former engineer in the supply chain of e-commerce giant Amazon.com, Instacart has evolved several times in search of a sustainable business model.