On-demand grocery delivery service Instacart announced Thursday it will give workers in Los Angeles, San Francisco and San Jose the option to become employees of the company.
Until now, Instacart's California shoppers and delivery personnel were classified as independent contractors. Under its new structure, shoppers will have the option to apply for part-time positions, which will entitle them to benefits such as workers' compensation, unemployment insurance, Medicare and Social Security contributions.
Those who choose to remain independent contractors will have the option of transitioning into delivery driver roles.
Some markets will continue to have independent contractors who perform both shopping and delivery duties, according to Instacart spokeswoman Andrea Saul, but the goal is to eventually have workers doing one or the other.
"What we noticed pretty quickly [when we had people focusing on shopping and delivering] was there are a lot of efficiencies," Saul said. "We had fewer order issues, shoppers got faster at picking items, which meant more on-time deliveries. We were able to deliver a better service for our customers."
According to Saul, reclassifying shoppers as employees also means Instacart can train them and provide supervision within stores.
The company first started offering workers the option to become employees in June in its Boston market. The program has since expanded to Atlanta; Austin, Texas; Chicago; Houston; Seattle; Washington; and Portland, Ore., with plans to roll it out to more markets.
The San Francisco company is facing a lawsuit in Massachusetts over its classification of workers. The lawsuit alleges Instacart misclassified its workers as independent contractors to avoid paying benefits. Similar cases against other on-demand services like Uber, Lyft and Washio are currently taking place around the country.