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Postmates Fights Driver’s Employee Status in New York Court

Feb. 11, 2020, 9:28 PM

Postmates food delivery drivers are not the company’s employees because the service simply connects couriers to customers, a lawyer for the app-based business told a New York appeals court.

“The app is just a matching system,” Postmates attorney David Cooper told a panel of judges on the New York Court of Appeals Tuesday. “The app is a mechanism for people who want things to be delivered to find people who are willing to make those deliveries.”

The company asked the court to uphold a lower court’s decision that Postmates isn’t the employer of delivery driver Luis Vega, who was kicked off the platform. An administrative board previously found that Vega was eligible for unemployment insurance benefits as a Postmates employee.

Postmates and other platform companies, like Uber and Lyft, face mounting legal and legislative challenges to a core aspect of their business model: the classification of drivers connected to customers as self-employed entrepreneurs, rather than employees. The case comes a day after Postmates and Uber lost an initial effort to get a court to block a new California law designed to force them to reclassify drivers as employees, entitled to minimum wage, overtime, unemployment and other protections.

The court directed much of its questioning to whether Postmates exerts sufficient control over delivery workers to be considered their employers. They also considered whether the nature of the job itself—limiting courier’s options about how to get deliveries from Point A to Point B—and their central role in Postmates’ business required employee status.

“An entrepreneur has some way to seek out or firmly establish its client base,” Judge Jenny Rivera said. “That’s not what’s going on here,” she added, saying that Postmates effectively determines drivers’ clients.

A similar battle between Uber and regulators in New Jersey spotlights the possible financial implications. The state recently hit the rideshare service with a $650 million bill for unpaid employment and temporary disability taxes, finding that the company has been misclassifying workers as independent contractors.

The case is In the Matter of the Claim of Luis A. Vega, Respondent, Postmates Inc., Respondent, Commissioner of Labor, Appellant., N.Y., No. 2018-00143, 2/11/20.

To contact the reporter on this story: Chris Opfer in New York at copfer@bloomberglaw.com

To contact the editor responsible for this story: Karl Hardy at khardy@bloomberglaw.com

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