Dive Brief:
- Four drivers have filed a class action suit against Amazon and courier service Scoobeez saying that they should have been paid as employees instead of independent contractors.
- The drivers were assigned by Scoobeez and its parent, ABT, to work exclusively for Amazon Prime Now’s same-day delivery service in Orange County, CA.
- Relying on contract drivers, Amazon Prime Now is available in 16 metro areas, and offers consumers one- and two-hour deliveries of thousands of items.
Dive Insight:
Tech disruptors’ reliance on contract employment may be at odds with California law, if a new class action lawsuit filed by four Orange County drivers against Amazon and the courier service Scoobeez is successful. The suit charges that the drivers should have been classified as employees rather than contractors; under state law, employees are entitled to overtime pay, workers compensation, and other protections.
The drivers filing the suit were assigned exclusively to the Amazon Prime Now delivery service, which offers one- or two hour deliveries of select items to members of Amazon’s service. According to the complaint, the drivers are seeking back wages and additional restitution after working regular shifts in Amazon Prime Now uniforms and being paid by the hour as contractors.
If the suit is successful, it could cost Amazon and other disruptors such as Uber lots of money. Uber alone would pay an estimated $209 million to reclassify its drivers as employees in California. Such a decision could also hurt Amazon Prime Now and other initiatives designed to speed deliveries such as Google Express and Amazon Flex, which proposes to pay private citizens to deliver packages. But such a decision would maintain an advantage for brick-and-mortar stores.
