Amazon Prime Now delivery drivers sue over classification as contractors

The lawsuit is the latest by on-demand workers who want to be classified as employees rather than as contractors


The Amazon logo on packaging from the company

Credit: IDGNS has been sued by delivery drivers in a proposed class-action suit that alleges that the company misclassifies its workers as contractors rather than as employees with full benefits.

The lawsuit filed by four drivers in the Superior Court for the State of California, County of Los Angeles, is the latest in a string of similar lawsuits filed against tech companies, particularly those like Uber that offer app-based on-demand services through independent workers.

The on-demand model has been touted by many startups as an option that lets workers decide to work whenever they want to, though there has also been criticism that the companies use the model to avoid paying the workers a variety of benefits that they would have paid their employees, possibly including reimbursement for vehicle expenses.

The proposed class-action suit filed Tuesday by the Amazon drivers alleges that delivery drivers for the new app-based Amazon Prime Now service, which offers a charged one-hour and free two-hour delivery of many products from Amazon and local stores, have been wrongfully paid as independent contractors even though they are treated as employees.

Scoobeez, one of many contractors engaged by Amazon for the Prime Now delivery service, hires as independent contractors exclusively for Amazon deliveries hundreds of drivers based out of Amazon warehouses in Southern California, according to the complaint. Scoobeez expanded its partnership with Amazon into San Francisco last week.

The terms that the drivers follow "fit many of the hallmarks that would classify them as employees," according to Leonard Carder, the law firm representing the drivers. The drivers reported to and worked exclusively out of an Amazon warehouse, were scheduled to work fixed shifts during Amazon’s Prime Now service hours, and were required to wear shirts and hats bearing the Amazon Prime Now logo and carry a smartphone preloaded with the app, according to the complaint.

When their expenses are included, Amazon Prime Now drivers in the Los Angeles area, however, barely earn the minimum wage of US$9 an hour in California and some may earn even less, according to the law firm. The drivers are paid $11 per hour and not given an opportunity to negotiate a higher wage. They make deliveries in their own vehicles, covering employment-related expenses such as fuel, insurance and maintenance costs out of their own pockets, the complaint said.

"Not infrequently they are scheduled to work six or seven consecutive days in a week, and have been occasionally sent home without pay after reporting to the warehouse if there is not enough work," according to the complaint.

The lawsuit has been filed against Amazon, Scoobeez and ABT Holdings, which owns a majority stake in the courier company and runs its operations.

Amazon spokeswoman Kelly Cheeseman wrote in an email Tuesday that the company has "a longstanding practice of not commenting on pending litigation."

The online retailer said in September it was beginning to use independent contractors directly for its Flex delivery program to ferry packages to customers, promising flexible working schedules  that would let drivers with a car be their own bosses and earn up to $25 per hour or more delivering Prime Now orders. Workers sign up for shifts using a smartphone app.

The use of independent service providers by companies apparently in their core operations has led to worker lawsuits, demanding that workers should be classified as employees with attendant benefits and not as independent contractors.

In a suit against Uber, a District Court in California agreed earlier this year to workers’ request for class certification. The California Labor Commission also ruled in June that a driver of Uber was an employee and not a contractor, when driving for the company, and was hence entitled to reimbursement on certain expenses. Uber said it had appealed the decision.

"Amazon's mission to deliver 'Now' at no additional cost to its customers is being funded by the delivery drivers," said Beth A. Ross, an attorney at Leonard Carder, who is representing the plaintiffs in the case. She previously sued FedEx Ground  over similar violations and secured a $227 million settlement.

In the suit against Amazon, Scoobeez and ABT, the court has been asked, among other things,  to order a permanent injunction prohibiting the companies from misclassifying the drivers and the class as independent contractors.  The lawsuit also asks for restitution to the drivers for the failure to pay legally required minimum wage, overtime compensation, reporting time pay, business expenses and missed meal periods.