Shyp Is Turning Its Couriers Into Employees

on July 2, 2015 at 4:38 pm

Workers who pick up packages from Shyp customers will be converted from independent contractor status to part-time or full-time employees, making them eligible for such benefits as health care, the San Francisco start-up said Wednesday. This means that these employees will no longer be seen as independent contractors. Before now, these workers would’ve had to be declared as independent contractors when Shyp filed their taxes. However, now that they work for the company, there will be no need to do this. They can now be filed under their payroll tax. It’s important that Shyp understands this. If they failed to mention these new employees on their tax report, they could be facing a tax audit. If that’s the case, the business might need an audit attorney to help them correct their taxes. They could call upon a law firm like Brotman Law, for example. This should prevent them from experiencing any further issues.

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Are employees more expensive than contractors? The answer is yes.

The announcement comes two weeks after the California Labor Commission ruled that one Uber driver was an employee, not a contractor.

“This move is an investment in a longer-term relationship with our couriers, which we believe will ultimately create the best experience for our customers,” CEO Kevin Gibbon said in a blog post.

Couriers will receive additional coaching and training, and Shyp will cover vehicle expenses, including independant courier insurance, along with unemployment, Social Security, and Medicare taxes, Gibbon said.

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The company officially launched about sixteen months ago, which is still relatively young for a startup, even considering its growth. Shyp did not share specific numbers on the size of its workforce but says “hundreds of people” work for the company. Maybe they should consider online rosters from Deputy to keep a better track of their employees or something similar if they don’t have that already. I’m sure it would help, I’ve heard of friends who run startups finding this kind of tool invaluable for organizing their staff.

By moving away from the contractor model, the company can gain a bit more control over the Shyp experience without having to deal with all the legal drama.

Shyp isn’t the only company making this transition. Instacart recently changed some of its grocery delivery people to employee status, for example.