Sep 4, 2020 - Technology

Gig companies know plenty about having employees

Illustration of person in suit wearing a delivery thermal bag

Illustration: Eniola Odetunde/Axios

Gig-economy companies have long argued that their workers place high value on the freedom to choose their own hours. But many of these firms either used to schedule workers for shifts — or still do, to some extent.

Why it matters: The companies are fighting efforts to force them to reclassify workers as employees, arguing that a rigid work model is incompatible with their operations.

State of play: Grocery delivery company Instacart currently has part-time employees in a number of markets across the country, who focus on assembling orders inside stores, a practice it first introduced in 2015.

  • Nevertheless, the company also has what it calls “full-service shoppers,” who assemble orders inside a store and also deliver them to customers. These workers are currently independent contractors who can work whenever they choose (within grocery store hours, of course).

Some other delivery companies, like Doordash and GrubHub, currently have scheduling systems for drivers in many or all their markets to better match levels of orders and drivers.

  • Their work schedules are more flexible than those of many hourly employees, with varying rules for changing or canceling hours and accepting deliveries. But the practice shows that delivery companies, whose operations are largely shaped by the schedules of restaurants, aren't strangers to arranging their workforces into schedules and predicting staffing needs.
  • Even Lyft has some experience with this from its earliest days, when drivers would sign up for shifts and be guaranteed a certain level of hourly earnings. Lyft says its goal then was to align supply and demand, but the system was phased out in 2014 as its business grew.

Similarly, both Uber and Lyft instituted forms of short shifts and staffing prioritizations for drivers in New York City last year to comply with a new set of rules. (These practices have been suspended during the pandemic given low ride demand.)

  • Because of minimum earnings and efficiency requirements, the companies ended up limiting how many drivers can be on the road at any given time.
  • Yes, but: Lyft says the rules resulted in 10,000 fewer drivers in the city and a 63% drop in hours for part-time drivers. Uber has similarly said that reclassifying drivers in California would mean it would need a much smaller number of drivers.

Be smart: There are other big reasons gig economy companies don't want to take on their drivers and delivery people as regular employees: That would require the employers to provide benefits, pay overtime, and pay their half of the Social Security payroll tax.

The bottom line: Creating the systems needed for employing their workers might not be as foreign to the gig economy companies as it might seem.

Editor's note: The story has been updated with more context about delivery companies' driver scheduling.

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