Shyp couriers now employees

On heels of lawsuit, workersmade eligible for variety of benefits

SAN FRANCISCO — As lawsuits mount against tech firms over how they classify their workforce, Shyp, the quickly growing startup that provides on-demand courier services, on Wednesday became the latest company to reclassify its contract workers as employees.

The change — which comes on the heels of a lawsuit filed against Shyp by two workers — will make hundreds of couriers eligible for workers’ compensation and other benefits, company executives said. The company also will pay for couriers’ vehicle expenses — an enormous cost to anyone driving for a delivery service — in addition to unemployment, Social Security and Medicare taxes.

“As a rapidly growing business, we want to ensure that each time a customer uses Shyp they have an incredible experience,” Kevin Gibbon, CEO and co-founder, said in a written statement. “For this reason, we want to provide our couriers with additional supervision, coaching, branded assets and training, which can only be

“We want to provide our couriers with additional supervision, coaching, branded assets and training, which can only be done with employees, so a shift is needed.”

— KevinGibbon, CEOand co-founder of Shyp

done with employees, so a shift is needed.”

The move, which some legal experts say is partially an attempt to minimize litigation that could result from the lawsuit filed Monday, was widely hailed as the latest decision by a tech company to support the workers of rapidly expanding startups, from Shyp to Postmates and Uber.

“In the short term, there will be increased costs to these companies by providing more for their workforce and paying withholding taxes, but the cost of settling a class-action lawsuit isn’t cheap, either,” said Roberto Cruz, legal and compliance counsel with ICon Professional Services.

Shyp employees will be both full-time and part-time with varying benefits, and couriers will be paid “well above the minimum wage,” a spokesman said. Shyp’s staff also includes warehouse employees and van drivers who transport items to the warehouses, who were always classified as employees.

Instacart, the San Francisco grocery delivery service, became one of the first tech startups in the so-called on-demand economy — companies that use a smart-