A Boston woman is suing Instacart, claiming the online grocery delivery company shortchanged her on pay and expenses while she filled customer orders.  The arbitration case, which seeks to represent hundreds of workers in Massachusetts, says Instacart owes back wages and out-of-pocket expenses for its shopping and delivery workers who were paid as independent contractors rather than employees.  Instacart, which recently started hiring some of its workers to part-time jobs, declined to comment on the case. It was filed Tuesday by Donna Busick, who began working as a shopper and delivery driver for the San Francisco-based company in late April.  Busick, 57, was initially paid a minimum of $10 an hour, she said Wednesday. But a few weeks into the job, Instacart switched her to compensation based on the number of deliveries she made, she said.  On one day, she worked at least six hours and took home just over $20, before paying for her gas and other driving expenses, she said.  The arbitration case is part of an expanding national fight over the way tech companies use contract labor to provide services such as rides, deliveries, and housecleaning. Instacart’s hiring paperwork stipulates that any disputes be settled in arbitration, rather than in the courts.  Companies like Instacart have relied on smartphone-wielding laborers to provide their services, which have become part of the emerging “on-demand” economy. But they often don’t officially hire those workers, instead treating them as independent contractors who run their own businesses.  That arrangement saves employers money because don’t pay contractors the minimum wage, cover sick days and job expenses, or submit payroll taxes to the state and federal governments. Shannon Liss-Riordan, who represents Busick and has filed similar lawsuits against several other companies, said companies appear to be using the same business model.  “They’re just jumping on board, thinking everyone’s doing it and they can get away with it,” she said. “But there are laws here. You can’t do that.”  Instacart, which has raised about $275 million in private investment, recently said it was converting its shoppers to part-time employees in the Boston and Chicago markets, and possibly will do the same in other cities. Its drivers will remain contractors.  There also are an unspecified number of workers in the Boston area who continue to both shop and deliver orders under the contractor arrangement. Busick said she’s one of them.  Shyp, a San Francisco startup that picks up and boxes packages that consumers want shipped, said Wednesday that it would no longer use independent contractors for its workforce of couriers.  The rise of contract-labor workforces is turning heads among established competitors, too.  Jeff Barry, founder of the produce-delivery company Boston Organics, has started noticing that his customers mention the quicker turnaround that Instacart offers.  “It’s fast and cheap,” said Barry, who said he offers workers a $14 hourly starting wage, along with health care and other benefits. “It’s kind of hard to compete against a company that’s heavily funded, that can operate at a loss, and on top of that has found some seams in the labor laws to do their delivery a lot less expensively.”
Grocery delivery service Instacart is moving away from a model that relies solely on contract labor for its front-line workforce. One Boston-area delivery worker, however, thinks the company should pay back wages and expenses for improperly classifying her as a contractor.