Food delivery startup Sprig to turn driver contractors into employees

The changes come amid larger challenges facing on-demand startups

Sprig's food delivery app lets users browse a menu that changes daily.

Sprig's food delivery app lets users browse a menu that changes daily.

Sprig, a startup whose mobile app lets users order food and have it delivered, is changing the status of its delivery drivers from contractors to employees.

The changes come as other startups providing on-demand services via apps wrestle over how to classify the workers who provide the service to customers, whether it is food delivery, house cleaning or taxi-like transportation.

The operations of companies like Uber and Postmates have been thrust into the spotlight over the issue, partly due to lawsuits that have challenged how the companies classify these workers. For example, Uber designates its drivers as contractors, not employees.

For accounting purposes, designating on-demand workers as independent contractors reduces the overhead costs for companies. Classifying them as company employees requires companies to provide additional benefits, possibly including reimbursement for vehicle expenses.

For Sprig, the company said the classification changes would roll out starting Thursday over the next several weeks, in all markets in which the company operates: San Francisco, Palo Alto and Chicago.

Sprig's change affects the hundreds of drivers who deliver food for its service. The new classification will provide career development and benefits to drivers; some drivers will also receive stock option grants, said Sprig CEO Gagan Biyani in a blog post.

The company also employs a much smaller number of chefs who prepare the food, who already have employee status. Sprig cooks all of its own food. Its app lets users browse lunch and dinner menus that change daily.

In recent months, other companies have made changes to classify at least some of their workers as employees. Instacart, which provides a grocery delivery service, said in June that it would classify some of its shoppers as part-time employees instead of contractors, starting in Boston and Chicago. The classification has since expanded to other cities including San Francisco, Atlanta and Seattle.

Luxe Valet, which provides an on-demand valet parking service, said last month it would convert hundreds of its parking attendants across seven U.S. cities to employees, including San Francisco, Los Angeles and New York. The workers would be able to set part-time or full-time schedules, the company said.

The worker classification issue has had detrimental effects on some companies. Homejoy, which provided a home cleaning service through its contractor workers, shut down last month. The company cited "unresolved challenges in the home services space," though worker classification lawsuits had also reportedly hurt the company's ability to attract venture funding.

But not all workers may desire to be classified as employees. While riding in an Uber car, one driver recently told me he feared that a conversion to employee status would give him less freedom to decide when to offer rides.

Sprig also announced other changes to its app on Thursday. Now, each dish will say where its ingredients were sourced from.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com

Join the Good Gear Guide newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags Sprigmobile applicationsInternet-based applications and servicese-commercemobileinternet

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Zach Miners

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Armand Abogado

HP OfficeJet 250 Mobile Printer

Wireless printing from my iPhone was also a handy feature, the whole experience was quick and seamless with no setup requirements - accessed through the default iOS printing menu options.

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?