SAN FRANCISCO: San Francisco on June 16 filed a suit in California state court accusing DoorDash of illegally classifying gig workers who handle deliveries for the startup on-demand as contractors.

The complaint filed by district attorney Chesa Boudin calls for San Francisco-based DoorDash to be compelled to re-classify delivery workers as employees and pay unspecified civil penalties.

"Misclassifying workers deprives them of the labour law safeguards to which they are entitled, denying workers minimum wage and overtime pay, unemployment insurance and protection from discrimination, among other things," Boudin said in a release.

"Now, more than ever, with the Covid pandemic, we must protect our workers, especially those essential workers who are delivering food to us each and every day."

California Assemblywoman Lorena Gonzalez lauded the suit as an effort to stop gig economy companies from exploiting people willing to work on-demand when summoned using smartphone apps.

"It is time to call out the gig companies for cheating workers out of wages and safety protections while also making it harder for law-abiding businesses to compete," San Francisco AFL-CIO labor council executive director Rudy Gonzalez said in the release.

DoorDash is an online platform for ordering food, drinks and other items from local restaurants and stores delivered by workers referred to by the company as "Dashers".

DoorDash, founded in 2013 by Tony Xu and two other Stanford University students, serves some 4,000 cities in the United States and Canada and reaches some 80% of US households.

A California law that went into effect this year could slam the brakes on the so-called "gig economy" by requiring rideshare firms to treat contract drivers as employees, challenging the economic models of giants such as Uber and Lyft.

The legislation, which is being closely watched in other states, responds to critics who argue that rideshare firms shortchange contract drivers by denying them employee benefits.

The law challenges the business model of the rideshare platforms and others which depend on workers taking on "gigs" as independent contractors.

The measure was hailed as a watershed moment for labor activists seeking more rights for gig and freelance workers.

State assemblywoman Gonzalez authored the bill, which was signed into law by Governor Gavin Newsom.

 - AFP