Dive Brief:
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Drivers in Orange County, CA are suing Amazon and courier service Scoobeez because they say they’re being treated as employees while only being compensated as independent contractors.
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The drivers say they were required to wear an Amazon uniform and perform duties in a way that would legally make them employees, but were not privy to overtime compensation, employee benefits, expense reimbursements, or federal and state employment protections.
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The suit is the latest in a string of challenges from workers and regulators to delivery services like Lyft, Uber, and others.
Dive Insight:
Through rulings and rule clarifications this summer, the California Labor Commission and the federal National Labor Relations Board made it clear that retailers and delivery services must tread more carefully in their treatment of workers they might consider independent contractors.
While Amazon has a reputation for paying their drivers well, that doesn’t necessarily make up for the fact that some may be eligible for compensation and benefits that should accrue to them as actual employees.
"They knew exactly where we were every single minute," plaintiff Cynthia Miller told the Chicago Tribune. "We were told when to take a lunch, when we get there, when we get to leave."
That sounds like an employee, not a contractor. Yet neither the law nor its application is new; what is new is the extent that delivery services are pushing the boundaries of contractor vs employment status.
Whenever a company tries to accrue both the benefits of having employees and the benefits of having contractors, while only incurring the costs of one of those, labor regulators will likely take notice. In effect, the demand economy will turn out to be a fairly insecure one if companies and consumers benefit to the disadvantage of the workers providing the services.
Anyone getting in the game of same-day delivery, whether a retailer, a delivery service, or a courier service, will need to take stock of labor regulations in each state. While they vary, there’s a lot of consistency.
Adhering to what the government has determined to be fair labor practice could mean that the cost of same-day delivery will skyrocket, David Bozin, an e-commerce/on-demand economy specialist, and VP of growth development at retail platform startup Bindo, told Retail Dive earlier this year.
Bozin believes that retailers, delivery services, and others operating in the demand economy must similarly be creative about finding ways to offer same-day delivery without over-burdening the customer, or the worker, with the cost.
“This ruling basically means that [the price of] same-day delivery is going to go through the roof,” Bozin told Retail Dive. “Yet on-demand has become a normal thing — consumers are used to it. There will need to be a mix between getting more creative and updating the business model. Everyone will have to get smarter about deliveries.”
That includes oh-so-smart Amazon.