San Francisco DA Is Suing DoorDash Over Employee Classification

Down Angle Symbol A symbol in the form of an angle pointing downwards. A worker with a DoorDash delivery bag in San Francisco in 2019. Katie Canales/Business Insider

• San Francisco District Attorney Chesa Boudin is suing food delivery platform DoorDash for misclassifying its employees as contractors instead of employees.
• The civil lawsuit is one of the latest examples of how California's AB5 law is upending tech companies' reliance on the gig economy.
• The law went into effect in January and requires companies to treat their gig workers as employees, a measure DoorDash is urged to take in the lawsuit.
• A DoorDash spokesperson told Business Insider in an email that “today's action is intended to disrupt the essential services that Dashers provide.”
• Visit Business Insider's homepage for more stories.

San Francisco District Attorney Chesa Boudin is suing food delivery platform DoorDash for “unlawful and unfair business practices.”

According to the complaint filed by Mission Local reporter Joe Eskenazi, who first reported the news, the company continues to classify its delivery drivers as independent contractors rather than employees, in direct violation of a California law designed to prevent companies from doing just that to do.

The state's AB5 law went into effect in early January 2020 and aims to require companies not only to classify gig workers as employees, but also to pay local, state and federal taxes according to that classification, as Eater SF notes . Boudin's civil lawsuit asks DoorDash to classify its delivery workers, known as “dashers,” as employees.

“Today’s action aims to disrupt Dashers’ essential services, deprive hundreds of thousands of students, teachers, parents, retirees and other Californians of valuable job opportunities, deprive local restaurants of much-needed revenue, and make it harder for consumers to be prepared “To transport groceries, groceries and other essentials safely and reliably,” said Max Rettig, Global Head of Public Policy at DoorDash, in an email to Business Insider. “We will fight to continue to offer Dashers the flexible earning opportunities they want during these challenging times.”

San Francisco tech companies — including Uber, Postmates and Lyft — and their business models rely heavily on gig workers. This allows them to avoid the higher costs associated with paying wages and benefits typically reserved for full-time employees.

DoorDash — which filed to go public in late February — isn't the only company that has aggressively pushed back on AB5. The company and others like Lyft, Uber and Instacart have poured millions into a campaign supporting a California ballot measure that would undo the AB5 law.

The driving service provider Uber and the food delivery service Postmates also filed a lawsuit in December 2019 on the grounds that the law was unconstitutional.

But gig workers are also going to court.

As Business Insider's Tyler Sonnemaker reported, Uber and Lyft drivers in California filed lawsuits against the companies in mid-April. The workers said they would be owed at least $630 million in back wages because their employers continued to classify them as independent contractors despite the passage of AB5.