California Startup Has Faced Three Class Action Lawsuits in its Young History

San Francisco, CAA shopping service that found favor with busy urban professionals but vilified by some of its service personnel is set to finalize a settlement worth $4.6 million in January 2018, reports the San Francisco Business Times (05/24/17). The class action California overtime lawsuit was brought by employees and independent contractors of Maplebear Inc., doing business as Instacart, and will settle plaintiff’s angst over various allegations, including a service fee that many users of the shopping service assumed was a built-in tip for drivers, but wasn’t.

Meanwhile, there are allegations that some Instacart workers collected earnings that translate to as low as $1 per hour. Such a stipend falls short of requirements entrenched in pay laws recognized by the State of California, as well as potential violations of overtime pay laws.

This past January – about a year before the proposed settlement is due to be finalized – the Los Angeles Times (01/27/17) profiled Apoorva Mehta, a Canadian and alma mater of the University of Waterloo who spent his immediate post-graduate years working for tech companies such as Blackberry and Qualcomm before moving stateside, landing in Seattle and beginning a stint as a supply chain engineer at Amazon.com, where he was responsible for developing fulfillment systems.

Mehta would eventually move on to trying his hand at various start-ups. He told the Los Angeles Times that his first 20 attempts failed to take hold. Instacart was Idea No. 21 that finally gained traction, aimed as it was at busy and tech-savvy professionals who would benefit from an on-demand grocery shopping platform. Orders would be placed through an app in much the same way as a commuter would hail a ride through Uber or Lyft, with either employees or independent contractors serving as ‘shoppers’ filling the orders and delivering them to the customer.

Based in San Francisco, Instacart was targeted by a class action lawsuit in 2015 brought, the Los Angeles Times reports, by workers who alleged they were misclassified as independent contractors, rather than employees – and thus were missing out on requisite rates of pay and overtime pay (Cobarruviaz et al. v. Maplebear, Inc. d/b/a Instacart, Case No. 3:15-cv-00697EMC, filed on January 9, 2015 and removed from the Superior Court for the County of San Francisco on February 13, 2015).

The Los Angeles Times reports that Instacart eventually made its ‘shoppers’ part-time employees, with some qualifying for benefits such as health insurance. Today, according to the Los Angeles Times, the startup has 300 full-time employees and a posse of part-time shoppers that number into the tens of thousands.

However, things are not all rosy. On February 28 of this year yet another proposed class action lawsuit was filed in the Superior Court for the County of Los Angeles (Camp, et al v. Maplebear, Inc. d/b/a Instacart, Case No. BC652216). According to Court documents various wage and hour violations are alleged including, but not limited to violations of the Fair Labor Standards Act, unpaid wages, failure to pay minimum wages, as well as unpaid overtime.

Instacart has so far faced three class action lawsuits in its young history. The most recent lawsuit prior to the 2017 filing was Husting et al. v. Maplebear, Inc. d/b/a
Instacart, Case No. 3:16-cv-06921-EMC filed on December 1, 2016 in California.