ALBANY, N.Y. (CN) — New York’s highest court grappled Tuesday with a trendy and critical question: Are food delivery drivers for apps like Postmates considered employees or independent contractors?
“Is there a business without delivery people?” Associate Judge Eugene Fahey of the New York Court of Appeals pondered. “Postmates is only in the business of delivery, so therefore, the delivery people are the business.”
The subject of the case is a former Postmates delivery person named Louis A. Vega, who worked for the company for a week before he was fired when customers complained.
Though Postmates argued Vega was an independent contractor, the New York Unemployment Insurance Appeal Board characterized him as an employee because the company exercised a significant amount of control over his work. He was granted state unemployment benefits, a reversal of an administrative judge’s decision.
Postmates appealed, saying Vega was an independent contractor, not a traditional employee. The New York Supreme Court Appellate Division’s Third Department agreed in a 3-2 decision, citing the lack of an application, interviews and supervisor, as well as the freedom the couriers had to work when they wanted. The state’s labor commissioner then appealed the case.
The Court of Appeals panel focused Tuesday on how much control Postmates had over Vega. A lot of control is a sign of an employee-employer relationship.
“[Postmates] put out assignments. You could take it or you could leave it. How much less control could you have?” asked Associate Judge Michael Garcia.
Assistant Solicitor General Joseph M. Spadola, arguing for the New York Department of Labor, said Vega was subject to the same forms of control by Postmates as by more traditional delivery businesses, focusing in particular on the timing pressures put on drivers. Independent contractors have more freedom than employees do in that realm, he argued.
“Here, timing is essential to delivery,” he said. “Because when you’re under a 20-minute estimated delivery time and you’re being tracked by the customer, you don’t have much freedom with respect to your delivery.”
Associate Judge Jenny Rivera added that Vega and others like him do not really act as their own business people, and therefore might not be independent contractors. Spadola agreed.
“He was simply performing labor for Postmates’ business model,” he said. For Vega to be an independent contractor, he’d have to be able to independently negotiate the fee charged and set his own delivery timing, among making other decisions, Spadola said.
“The notion that someone who’s taking a package from point A to point B is an independent entrepreneur is really just a fiction,” he concluded.
David Cooper for Postmates disagreed, saying Vega and others like him are independent business people.
“Because they can, and frankly often do, work for more than one company at a time, delivering more than one thing at a time,” the attorney said.
“Well, that just means someone can’t make enough money to only work for your client,” Rivera shot back. “People can work part-time for several employers and still be employees.”
Associate Justice Leslie Stein noted that the court is working with a different business model than in days of old.
“Isn’t the app in effect exercising the same kind of control?” she asked. “Just in a more modern way?”
“There is no evidence whatsoever that the app is exercising that kind of control,” Cooper responded. “The app is just a matching system.”
In his rebuttal, Spadola drew comparisons between yoga instructors, who set their own schedules and pricing, and delivery drivers.
“There’s a whole world of discretion that yoga instructors have that delivery drivers don’t,” he said.
The court did not rule from the bench Tuesday. It is unclear when the judges will issue a ruling.