A rare move by DoorDash Inc. to offer hourly pay could make its drivers look more like employees under federal labor laws, according to employment attorneys, potentially prompting fresh legal questions about the independent contractor model’s use in the gig-economy.
Tech companies that dominate the app-based industry, including DoorDash, classify the workers that provide their services as independent contractors, who are considered to be in business for themselves, as opposed to employees who receive protections under federal employment laws.
If a court or federal agency was convinced the new pay option demonstrates that DoorDash has a significant amount of control over its drivers—a key factor when determining whether a worker is a contractor or an employee—it could threaten the business model foundational to the gig economy.
“I think one can argue it’s another example of DoorDash’s ability to unilaterally change the terms and conditions of its relationship with these workers. And therefore it’s going to be deemed as a restraint on entrepreneurial opportunity,” said Eric Su, a partner at Crowell & Moring in New York.
“From the most basic level one of the factors in the exercise of control often referenced will be the ability for an employee to negotiate their own rates,” he explained. He said that the parameters for the two pay options “are established by DoorDash...
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