Attorney Targeting Food-Delivery Industry’s Employment Practices

Date: January 04, 2016

Lawyer Suing Uber Could Have Impact On Sharing Economy

Eater profiled labor lawyer Shannon Liss-Riordan, whose lawsuit against Uber could have a major impact on the on-demand economy as a whole, including food delivery services. In a reprise of her legal assault on Uber, Liss-Riordan recently “filed class-action complaints against DoorDash and GrubHub, and she’s representing one driver in arbitration for on-demand food delivery service Caviar.” Liss-Riordan says that her lawsuits cover not only delivery drivers, but customer service workers and data entry workers who are also classified as independent contractors, and in some cases, do not even make minimum wage. Liss-Riordan said the sharing or on-demand economy allows companies to misclassify workers as contractors, allowing them to avoid wage and benefit laws that could increase their costs. Liss-Riordan said, “Employers realize they can save a whole lot of money on labor costs by classifying their workers as independent contractors rather than employees.” Her latest legal foray focuses on a threshold issue, gaining class status for the delivery start-up drivers, many of whom sign contracts that bar them from joining class actions.

What This Means For Small Businesses

Many entrepreneurs rely on contract workers as they try to enter the market and do not have the resources to litigate complex employment issues. Lawsuits targeting the labor practices of innovative on-demand economy startups could chill the creation of new small businesses in a time where business creation is lagging.

Additional Reading

The NFIB previously reported on Uber’s efforts to avoid a class action lawsuit on the behalf of its drivers, who it says prefer working as independent contractors.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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