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SF District Attorney Files Against DoorDash for Unfair Practices

The San Francisco district attorney’s office has set its sights on the largest delivery service in the US, DoorDash. The city is suing the start-up food delivery service, alleging unfair business practices and worker misclassification. The worker misclassification accusation makes sense, California recently clarified state laws regarding worker classification (whether a worker is an employee or contractor). California is actually the first state in the nation to pass laws surrounding worker misclassification, and recently filed similar lawsuits against Uber and Lyft (in fact, as reported by The Verge, DoorDash is actually helping fund Uber & Lyft’s effort to stymie the law).

This is not DoorDash’s first time in the negative spotlight. Last year there was quite a bit of consumer outrage over the company's practice of withholding some tips, rather than passing them onto “dashers” (what the service calls its delivery drivers). The Verge quotes San Francisco District Attorney Chea Boudin, who says that DoorDash is illegally classifying workers as independent contractors, and that “misclassifying workers deprives them of the labor law safeguards to which they are entitled”. Independent contractors may not even make minimum wage, depending on their job-related expenses, and normally aren’t entitled to social safety nets and benefits such as unemployment or overtime.

California’s Assembly Bill 5, also known as the “ABC test”, codified how a worker is classified as either an employee or independent contractor. Start-up, gig-economy companies such as Uber, Lift and DoorDash argue that their couriers and drivers are independent contractors who can set their own schedule and work for any or even multiple gig-economy companies. DoorDash’s representative says that San Francisco’s action will endanger restaurants and part-time workers who rely on the service. Authorities argue that DoorDash is skirting the law in the name of corporate profits, implying that they do not have the public’s interest nor their workers’ interests at heart.

Since the pandemic shut down businesses and economic activity across the nation months ago, restaurants – with their notoriously thin profit margins – have been hit hard. Many establishments have already closed, and those that remain open have been struggling to pull a profit during these hard times. Services like DoorDash can help restaurants mitigate the situation, by allowing them to offer delivery services without having to pay drivers or set up the technology and infrastructure to fill to-go orders. These services have been under fire from administrations across the country for their supposedly unfair business practices, wherein restaurants are charged exorbitant fees, sometimes even when a customer is trying to place an order directly and not through a third party service.

As with all things legal, this battle will likely play out over the span of many months, if not years. A court filing today may not mean a ruling for quite some time. Given the nature and scope of California’s AB5, it would seem as though DoorDash has indeed run afoul of state laws regarding employee classification, but only time will tell if a court upholds the attorney general’s opinion.

Source: The Verge