Grocery delivery service Instacart is extending its offer to convert some of its staff from contract workers to company part-time employees to those in Atlanta, Miami, and Washington, D.C., the company said on Monday.
Instacart lets customers order groceries from certain stories such as Whole Foods and Costco through its mobile app, and uses a combination of store shoppers and drivers to deliver the orders within a specified timeframe for a small fee.
As employees, Instacart will now have to pay for these workers’ payroll taxes, social security taxes, and so on.
In late June, the startup started offering this opportunity to its store shoppers in Boston and Chicago. Instacart founder and CEO Apoorva Mehta said in a statement that most shoppers in those cities did choose to convert to being employees. The company says it plans to extend this offer to even more cities in the future.
The company maintains that the move enables it to provide more training to its staff and ultimately a better experience for its customer. However, it’s difficult to believe that the recent legal issues surrounding the practice of employing contract workers to skirt on labor costs, popular among many new “on-demand” service startups. Lawsuits have been filed against ride-hailing startups Uber and Lyft, cleaning service Homejoy, delivery startup Postmates, and even Instacart itself.
Other startups like Shyp, which takes care of shipping items for its customers with the tap of an app, has also converted its contract workers to company employees.