A worker for the e-scooter company Bird has sued the billion-dollar micro-mobility startup for classifying the workers who charge the e-scooters as independent contractors in order to save money and cut costs.
The suit alleges that the workers should not be classified as independent contractors under California law, where Bird’s headquarters are based, but as employees.
The suit, which was filed in April 30, echoes other challenges to the independent contractor status of workers at other startups, most notably ride-hail companies like Uber and Lyft (whose drivers will go on strike on Wednesday to protest their classification). It also comes a year after California’s Supreme Court made it harder for companies to classify their workers as independent contractors, a move legal experts immediately recognized posed a fundamental challenge to the so-called gig economy, an arrangement increasingly recognized as one that allows companies to pay workers often unsustainable wages and circumvent employee protections.
The independent contractor issue is hardly confined to Silicon Valley. According to the Bureau of Labor Statistics, independent contractors made up 6.9 percent of the U.S. labor force as of May 2017.
Currently, Bird pays chargers a flat fee, typically $5, per scooter charged, which the suit alleges does not account for all the time they spend actually working for Bird, sometimes due to errors committed by the company itself. From the complaint:
In many instances, however, collecting a particular scooter turns out not to be possible or takes an excessive amount of time, due to errors in the Bird app, interference from other chargers (such as when a scooter has already been collected by someone else before the charger arrives), barriers (such as when a scooter has been taken into a customer’s home or is behind a fence), or other reasons. Chargers may therefore spend significant time working for Bird in an attempt to locate, collect, and recharge scooters, only to be unsuccessful at collecting any. Or to spend an excessive amount of time collecting only one or a few scooters, earning little to no money for all their time worked.
Chargers also must cover the cost of gas as they round up the scooters and put them back into circulation or the cost of electricity.
All of this would be legal if the chargers are independent contractors. But the crux of the lawsuit’s argument is that they shouldn’t be. The most compelling case the suit makes, at least on the face of it, is that independent contractors under California law must perform work “outside the usual course of the hiring entity’s business.” Bird doesn’t have a business if the scooters are not charged.
The challenge to Bird’s employment classification potentially disrupts one of the key differentiators from e-scooter businesses from its car-based competitors. One of the selling points of e-scooter companies has been that, unlike Uber and Lyft, they aren’t reliant on an army of contract labor that, if classified as actual employees, would make the business model untenable.
Analysts have already been questioning the viability of scooter-sharing businesses because the scooters have to be replaced too often and the margins per ride are too low. Paying chargers an hourly basis and cover work-related expenses would make the math even more challenging.
Bird did not respond to a request for comment on the suit by publication. We will update the post if we hear back.