1. Platform Overview by Category
The gig economy spans multiple industries, each with different worker rights landscapes. Here's how the major platforms break down:
Rideshare Platforms
Uber
The largest rideshare platform globally. Operates Uber, Uber Eats, and Uber Freight.
- Classifies drivers as independent contractors
- Subject to Prop 22 in California
- Has faced numerous misclassification lawsuits
- Offers some healthcare stipends in CA
Lyft
Second-largest rideshare platform in the US. Primarily operates in North America.
- Similar structure to Uber
- Subject to Prop 22 in California
- Has settled multiple class action lawsuits
- Provides accident insurance during rides
Delivery Platforms
DoorDash
Largest food delivery platform in the US. Also operates DashMart convenience delivery.
- Dashers classified as independent contractors
- Has faced tip transparency lawsuits
- Subject to Prop 22 in California
- Provides occupational accident insurance
Instacart
Leading grocery delivery platform. Partners with major grocery chains.
- Shoppers are independent contractors
- Has faced misclassification lawsuits
- Subject to Prop 22 in California
- Tip transparency improved after legal action
Grubhub
One of the original food delivery platforms. Now owned by Just Eat Takeaway.
- Drivers classified as independent contractors
- Historically better tip transparency
- Subject to Prop 22 in California
- Offers driver benefits program
Service Platforms
TaskRabbit
Marketplace for local services: furniture assembly, moving help, handyman work, etc.
- Taskers set their own rates
- More worker autonomy than most platforms
- Takes 15% service fee from Taskers
- Workers control scheduling and pricing
Handy
Home cleaning and handyman services platform.
- Has faced significant misclassification lawsuits
- More control over workers than TaskRabbit
- Sets prices and schedules assignments
- Settled class action for $36M in 2019
Freelance Platforms
Upwork
Largest freelance platform for professional services: writing, design, development, etc.
- Freelancers set their own rates
- Takes 5-20% sliding scale fee
- Payment protection through escrow
- Dispute resolution available
Fiverr
Global freelance marketplace for creative and digital services.
- Freelancers create service "gigs"
- Takes 20% of each transaction
- Sellers set their own prices
- Resolution center for disputes
Last-Mile Delivery
Amazon Flex
Amazon's gig delivery program for Prime, Fresh, and packages.
- Drivers classified as independent contractors
- Amazon sets delivery blocks and pay
- Less worker autonomy than many platforms
- High deactivation rate reported
Shipt
Target-owned grocery delivery service. Operates nationally.
- Shoppers are independent contractors
- Pay structure changed to less transparency
- Has faced lawsuits over pay practices
- Subject to Prop 22 in California
2. Worker Classification: 1099 vs W-2
Worker classification is the foundation of all gig worker rights. Whether you're classified as an independent contractor (1099) or employee (W-2) determines your legal protections, benefits, and remedies.
- Employees (W-2) get minimum wage, overtime, workers' comp, unemployment, and labor law protections
- Independent Contractors (1099) get none of those protections - but may have more flexibility
- Misclassification is when a company treats you as 1099 when you should legally be W-2
Classification Comparison by Platform
| Platform | Classification | Major Lawsuits | CA Status | Misclassification Risk |
|---|---|---|---|---|
| Uber | 1099 | O'Connor v. Uber (settled $20M); ongoing CA litigation | Prop 22 exempt | Medium (Prop 22) |
| Lyft | 1099 | Cotter v. Lyft (settled $27M) | Prop 22 exempt | Medium (Prop 22) |
| DoorDash | 1099 | Multiple tip theft suits; misclassification claims | Prop 22 exempt | Medium (Prop 22) |
| Instacart | 1099 | $4.6M California settlement (2017) | Prop 22 exempt | Medium (Prop 22) |
| Grubhub | 1099 | Lawson v. Grubhub (driver won in 2018 - rare) | Prop 22 exempt | Medium (Prop 22) |
| TaskRabbit | 1099 | Less litigation due to more worker autonomy | Not Prop 22 | Lower |
| Handy | 1099 | $36M settlement (2019); high control issues | Not Prop 22 | High |
| Upwork | 1099 | Minimal - true freelance model | Not Prop 22 | Very Low |
| Fiverr | 1099 | Minimal - marketplace model | Not Prop 22 | Very Low |
| Amazon Flex | 1099 | Multiple misclassification suits; PAGA claims | Not Prop 22 | High |
| Shipt | 1099 | Pay transparency lawsuits | Prop 22 exempt | Medium (Prop 22) |
California's ABC Test (AB5)
California's AB5 law uses a strict "ABC test" to determine if a worker is an employee. Under this test, a worker is an employee UNLESS the hiring company can prove ALL THREE factors:
The ABC Test (California)
- A - Autonomy: Worker is free from control and direction in performing the work
- B - Business: Worker performs work outside the usual course of the company's business
- C - Custom: Worker is customarily engaged in an independently established trade, occupation, or business
Other States (Federal Test)
- Most states use the IRS "economic realities" test
- Considers behavioral control, financial control, and relationship type
- Generally easier for companies to classify as 1099
- Some states (MA, NJ) have stricter tests like CA
3. California Prop 22 Compliance
Proposition 22 is unique to California. It allows app-based rideshare and delivery platforms to classify workers as independent contractors while providing some minimum benefits. Here's what platforms must provide:
Prop 22 Required Benefits
| Benefit | Requirement | Who Must Comply |
|---|---|---|
| Minimum Earnings Guarantee | 120% of minimum wage for engaged time (currently ~$19.80/hr in CA) | Uber, Lyft, DoorDash, Instacart, Postmates, Grubhub, Shipt |
| Healthcare Stipend | 100% of Covered CA average premium (25+ hrs/wk); 50% for 15-25 hrs/wk | All Prop 22 platforms |
| Vehicle Expense | $0.35/engaged mile (adjusted annually) | All Prop 22 platforms |
| Occupational Accident Insurance | Coverage for injuries during engaged time (medical, disability, death benefits) | All Prop 22 platforms |
| Anti-Discrimination | Must comply with anti-discrimination and anti-retaliation protections | All Prop 22 platforms |
| Sexual Harassment Training | Must provide training and policies | All Prop 22 platforms |
Prop 22 Compliance by Platform
| Platform | Earnings Guarantee | Healthcare Stipend | Mileage Rate | Insurance | Compliance Issues |
|---|---|---|---|---|---|
| Uber | Yes | Yes | $0.35/mi | Yes | Some disputes over "engaged time" calculation |
| Lyft | Yes | Yes | $0.35/mi | Yes | Similar engaged time disputes |
| DoorDash | Yes | Yes | $0.35/mi | Yes | Tip transparency concerns remain |
| Instacart | Yes | Yes | $0.35/mi | Yes | Shopping time vs. delivery time disputes |
| Grubhub | Yes | Yes | $0.35/mi | Yes | Fewer reported compliance issues |
| Shipt | Yes | Yes | $0.35/mi | Yes | Pay calculation transparency concerns |
Platforms NOT Covered by Prop 22
The following platforms are NOT exempt from AB5 and must still comply with California's ABC test:
- TaskRabbit - Service-based, not app-based delivery/rideshare
- Handy - Home services, not delivery/rideshare
- Amazon Flex - Package delivery, not restaurant/grocery
- Upwork/Fiverr - Freelance marketplaces, not delivery/rideshare
4. Pay Structure and Transparency
Pay transparency varies widely across platforms. Some show exactly how your pay is calculated; others use opaque algorithms. Here's how each platform handles compensation:
Pay Transparency Comparison
| Platform | Pay Model | Upfront Pricing | Tip Visibility | Algorithmic Changes | Transparency Rating |
|---|---|---|---|---|---|
| Uber (Rides) | Per-trip based on time/distance | Yes (Upfront Fares) | After ride | Frequent, opaque | Medium |
| Lyft | Per-trip based on time/distance | Yes (Upfront) | After ride | Frequent, opaque | Medium |
| DoorDash | Base pay + tips + promotions | Partial (shows range) | Partially hidden | Frequent changes | Low |
| Instacart | Batch pay + tips | Shows total estimate | Visible upfront | Opaque batch pricing | Medium |
| Grubhub | Per-order + mileage + tips | Full transparency | Visible upfront | Less frequent | Higher |
| TaskRabbit | Tasker sets hourly rate | You control it | Tips separate | N/A - you set rates | High |
| Handy | Platform sets rates | No choice | Variable | Company controlled | Low |
| Upwork | Freelancer sets hourly/fixed | You control it | N/A | N/A - you set rates | High |
| Fiverr | Seller sets gig prices | You control it | Tips visible | N/A - you set rates | High |
| Amazon Flex | Block-based fixed rate | Shown before claim | Tips (Flex Fresh only) | Rates vary by block | Medium |
| Shipt | Order pay + tips | Opaque calculation | Delayed visibility | Major 2023 changes | Low |
- Pay calculations that change without notice
- Tips not shown until after you accept/complete a job
- Batch pay that seems lower than the sum of individual orders
- Guaranteed earnings that exclude significant wait time
- Promotions that disappear or change during the promotion period
Calculating Your True Hourly Rate
To understand your actual earnings, track these elements:
- Gross earnings - Total pay including tips before deductions
- Total hours worked - Include ALL time: waiting, traveling to starting point, etc.
- Vehicle expenses - Mileage (IRS rate: $0.67/mile in 2024), maintenance, insurance, depreciation
- Self-employment taxes - You pay both employee and employer portions (15.3%)
- Platform fees - Some platforms deduct service fees from your earnings
5. Deactivation Policies and Appeals
Deactivation (being removed from the platform) is one of the biggest concerns for gig workers. Platforms have wide discretion to deactivate, often with limited explanation or appeal rights.
Deactivation Comparison
| Platform | Notice Given | Reason Provided | Appeal Process | Reinstatement Rate | Timeline |
|---|---|---|---|---|---|
| Uber | Sometimes | Vague | Yes (Hub or app) | Low-Medium | Days to weeks |
| Lyft | Sometimes | Vague | Yes (in-app) | Low-Medium | Days to weeks |
| DoorDash | Email usually | General category | Yes (appeal form) | Medium | 1-2 weeks typical |
| Instacart | Sometimes detailed | Yes (email/form) | Medium | 1-3 weeks | |
| Grubhub | Yes | Partial | Yes | Medium | 1-2 weeks |
| TaskRabbit | Yes | Usually detailed | Yes (support) | Higher | Days |
| Handy | Often none | Minimal | Limited | Very Low | Varies widely |
| Upwork | Yes | Detailed (TOS cite) | Yes (ticket system) | Varies | Days to weeks |
| Fiverr | Yes | TOS violation cited | Yes (support) | Varies | Days |
| Amazon Flex | Often none | Very vague | Limited (email) | Very Low | Weeks to months |
| Shipt | Sometimes | Vague | Limited | Low | Weeks |
Common Deactivation Reasons
Performance-Based
- Low ratings (below platform threshold)
- High cancellation rate
- Late deliveries or arrivals
- Order accuracy issues
- Low acceptance rate (some platforms)
Safety/Conduct
- Customer complaints (real or false)
- Background check issues (new or old)
- Reported unsafe driving
- Inappropriate behavior reports
- Policy violations
Fraud/Abuse Flags
- Multiple accounts
- GPS manipulation suspected
- Referral bonus abuse
- Promotion exploitation
- Identity verification failures
How to Appeal a Deactivation
Step-by-Step Appeal Process
Document Everything
Before deactivation happens, maintain records of:
- All communications with support
- Screenshots of your ratings and metrics
- Trip/delivery history and earnings
- Any complaints you've made to the platform
- Changes to policies or terms of service
- Names of support representatives you speak with
6. Arbitration Clauses and Carve-Outs
Almost every gig platform requires you to agree to mandatory arbitration, giving up your right to sue in court or join class actions. However, there are important exceptions and opt-out rights.
Arbitration Clause Comparison
| Platform | Mandatory Arbitration | Class Action Waiver | Opt-Out Period | CA PAGA Carve-Out | Small Claims Exception |
|---|---|---|---|---|---|
| Uber | Yes | Yes | 30 days | Yes | Yes |
| Lyft | Yes | Yes | 30 days | Yes | Yes |
| DoorDash | Yes | Yes | 30 days | Yes | Yes |
| Instacart | Yes | Yes | 30 days | Yes | Yes |
| Grubhub | Yes | Yes | 30 days | Yes | Yes |
| TaskRabbit | Yes | Yes | Varies | Yes | Yes |
| Handy | Yes | Yes | 30 days (check) | Yes | Yes |
| Upwork | Yes | Yes | 30 days | Yes | Yes |
| Fiverr | Yes | Yes | Check terms | Yes | Yes |
| Amazon Flex | Yes | Yes | 14 days | Yes | Yes |
| Shipt | Yes | Yes | 30 days | Yes | Yes |
California-Specific Carve-Outs
Even with arbitration agreements, California workers have special rights that cannot be waived:
PAGA Claims (California Only)
- Cannot be forced to arbitration - Viking River Cruises v. Moriana (2022) limits this but individual claims may still be arbitrable
- File on behalf of yourself AND other aggrieved employees
- 75% of penalties go to the state, 25% to workers
- Powerful tool for wage and hour violations
Small Claims Court
- Most arbitration agreements allow small claims exceptions
- California limit: $12,500 for individuals
- Quick, inexpensive, no attorney needed
- Good for individual wage claims under the limit
How to Opt Out of Arbitration
Sample Opt-Out Letter
To: [Platform Legal Department]
Re: Arbitration Opt-Out
Date: [Current Date]
I am opting out of the arbitration agreement and class action waiver in [Platform Name]'s Terms of Service.
Account Email: [your email]
Name: [your full legal name]
Address: [your address]
Phone: [your phone on account]
I signed up on [date] and am within the opt-out period.
Signed: [your name]
- Uber: optout@uber.com or legal address in terms
- Lyft: arbitrationoptout@lyft.com
- DoorDash: Address in Terms of Service
- Amazon Flex: Check current terms (short window!)
7. Tips and Pay Theft Issues
Tip theft and manipulation is one of the most common complaints among gig workers. Here's how different platforms handle tips and where problems arise:
Tip Policies by Platform
| Platform | 100% Tips to Worker | Tip Shown Upfront | Tip Adjustment Window | Known Issues |
|---|---|---|---|---|
| Uber | Yes | After ride | 24 hours | Tip baiting less common; tips delayed |
| Lyft | Yes | After ride | 72 hours | Passengers can remove tips after ride |
| DoorDash | Yes (now) | Partially hidden | Until delivery | Historical tip subsidy scandal; tip hiding |
| Instacart | Yes | Shown upfront | 24 hours post | "Tip baiting" - customers remove after |
| Grubhub | Yes | Shown upfront | N/A | Better transparency historically |
| TaskRabbit | Yes | Separate from pay | Post-task | Tips clearly separated from task pay |
| Amazon Flex | Yes | Fresh/Prime only | Varies | Tips only on some delivery types |
| Shipt | Yes | After delivery | Varies | Tips may be delayed significantly |
Common Tip-Related Problems
Tip Baiting
Customer shows high tip to get fast service, then removes it after delivery.
- Worst offenders: Instacart, Shipt
- Impact: Lost earnings, wasted time
- Legal status: Generally not illegal, but platforms could prevent it
Tip Subsidies
Platform counts tips toward base pay guarantee instead of adding on top.
- Historical offenders: DoorDash, Instacart, Amazon
- Current status: Most platforms now add tips on top
- Legal status: Settled class actions for past practices
Hidden Tips
Platform hides portion of tip to prevent "cherry-picking" orders.
- Current offenders: DoorDash (shows partial tip)
- Impact: Can't make informed acceptance decisions
- Legal status: Questionable but not clearly illegal
8. Background Check Disputes
Background checks are required for most gig platforms, but errors are common and can wrongly disqualify you from working. Here's what you need to know:
Background Check Requirements by Platform
| Platform | Provider | Criminal Lookback | Driving Record | Continuous Monitoring | Dispute Process |
|---|---|---|---|---|---|
| Uber | Checkr | 7 years | Yes | Yes | Through Checkr |
| Lyft | Checkr | 7 years | Yes | Yes | Through Checkr |
| DoorDash | Checkr | 7 years | Some markets | Yes | Through Checkr |
| Instacart | Checkr | 7 years | No | Yes | Through Checkr |
| Grubhub | Checkr | 7 years | Some markets | Periodic | Through Checkr |
| TaskRabbit | Checkr | 7 years | No | Periodic | Through Checkr |
| Amazon Flex | Accurate Background | 7 years | Yes | Yes | Through provider |
| Shipt | Checkr | 7 years | Some markets | Yes | Through Checkr |
Your Rights Under the FCRA
The Fair Credit Reporting Act (FCRA) gives you important rights when background checks are used:
Your FCRA Rights
- Pre-adverse action notice - Platform must tell you BEFORE rejecting you based on background check
- Copy of report - You must receive a copy of the background check
- Dispute rights notice - Must be informed of your right to dispute
- Time to dispute - Reasonable time to challenge errors before final decision
- Adverse action notice - Final notice if rejected, with contact info for background check company
How to Dispute Errors
- Request your full background check report
- Review for errors (wrong person, expunged records, wrong dates)
- File dispute with the background check company (Checkr, etc.)
- Provide documentation proving errors
- Company must investigate within 30 days
- If still rejected, consider FCRA lawsuit
Ban-the-Box and Fair Chance Laws
Some cities and states have additional protections:
- California - AB 1008 (Fair Chance Act) for employers with 5+ employees
- Los Angeles - Fair Chance Initiative for Hiring Ordinance
- San Francisco - Fair Chance Ordinance
- New York City - Fair Chance Act
- Seattle - Fair Chance Employment Ordinance
9. Expense Reimbursement Policies
Gig workers typically bear significant expenses that employees would have reimbursed. Understanding what you should be tracking - and what you may be owed - is essential.
Expense Reimbursement Comparison
| Platform | Mileage/Vehicle | Phone/Data | Equipment | Other Expenses | CA Prop 22 Mileage |
|---|---|---|---|---|---|
| Uber | Your expense | Your expense | Your expense | None | $0.35/engaged mi |
| Lyft | Your expense | Your expense | Your expense | None | $0.35/engaged mi |
| DoorDash | Your expense | Your expense | Your expense | None | $0.35/engaged mi |
| Instacart | Your expense | Your expense | Your expense | None | $0.35/engaged mi |
| Grubhub | Your expense | Your expense | Your expense | None | $0.35/engaged mi |
| TaskRabbit | Your expense | Your expense | Your expense | Can include in rate | Not covered |
| Handy | Your expense | Your expense | Your expense | None | Not covered |
| Upwork | N/A usually | Your expense | Your expense | Negotiate with client | Not covered |
| Amazon Flex | Your expense | Your expense | Your expense | None | Not covered |
| Shipt | Your expense | Your expense | Your expense | None | $0.35/engaged mi |
California Labor Code 2802
- Vehicle mileage at IRS rate ($0.67/mile in 2024)
- Cell phone and data used for work
- Equipment and tools required for work
- Insurance premiums attributable to work
- Any other necessary expenditures
Expenses to Track
Vehicle Expenses
- Mileage (use app like Stride, Everlance)
- Gas and fuel
- Maintenance and repairs
- Car insurance (business use portion)
- Depreciation
- Parking and tolls
Technology Expenses
- Phone/smartphone
- Phone mount and accessories
- Data plan (work portion)
- Phone charger for car
- Backup phone/device
Other Expenses
- Insulated bags (delivery)
- Cleaning supplies
- PPE and safety equipment
- Uniform or dress code items
- Background check fees
10. Best Practices for Protecting Your Rights
Whether you're starting gig work or have been doing it for years, these practices will help protect your rights and strengthen any future claims.
Before You Start
Do These Things
- Read the Terms of Service - Know your rights and obligations
- Opt out of arbitration - Send written notice within the opt-out window
- Set up expense tracking - Use Stride, Everlance, or spreadsheet from day 1
- Document your start date - Screenshot your account creation confirmation
- Understand the pay structure - Know how you're paid before accepting work
Avoid These Mistakes
- Don't ignore the arbitration clause - You have a limited window to opt out
- Don't skip reading deactivation policies - Know what can get you removed
- Don't assume you have employee rights - Know your classification status
- Don't agree to everything without reading - Policy updates matter
- Don't work without tracking expenses - You need records for taxes and claims
While Working
Document Everything
- Screenshot your earnings summaries regularly
- Save all communications with support
- Track ALL hours worked (including wait time)
- Note any incidents, complaints, or policy changes
- Keep records of tips promised vs. received
- Screenshot ratings and metrics weekly
Protect Yourself
- Use dashcam (for rideshare especially)
- Have your own commercial insurance if required
- Don't rely solely on platform insurance
- Set aside money for taxes (25-30%)
- Know your deactivation threshold metrics
- Save some earnings as emergency fund
If Problems Arise
Pay Issues
Deactivation
11. Platform-Specific Dispute Resolution
Each platform has different processes for resolving disputes. Here are recommendations based on the issue type and platform:
Rideshare (Uber/Lyft)
Recommended Approach
- Pay disputes: App support first, then escalate to Greenlight Hub (Uber) or Hub (Lyft), then DLSE or small claims
- Deactivation: In-app appeal, visit Hub in person, arbitration if opted in
- Accident/injury: Report through app, contact platform insurance, consider personal attorney
- Discrimination/harassment: Document everything, file with CRD (formerly DFEH), consult employment attorney
Key Contacts
- Uber Greenlight Hubs: In-person support centers in major cities
- Lyft Hub: In-person support in some cities
- California DLSE: For wage claims - free to file
- Small Claims: Up to $12,500 in California
Delivery (DoorDash/Instacart/Grubhub)
Recommended Approach
- Pay disputes: In-app support, escalate via email, then DLSE for wage violations
- Tip issues: Document with screenshots, contact support, file complaint with state AG if systemic
- Deactivation: Email appeal, request specific reasons, arbitration if necessary
- Rating disputes: Appeal specific incidents, provide documentation
Special Notes
- DoorDash: Has settled multiple class actions - document any systemic issues
- Instacart: Tip baiting is common - screenshot pre-delivery tip amounts
- Grubhub: Generally better support reputation
Services (TaskRabbit/Handy)
Recommended Approach
- Pay disputes: Support ticket system, escalate to supervisors
- Client issues: Document with photos, report to platform safety team
- Misclassification (Handy): Strong case for employee status - consult employment attorney
- Account issues: Email support with documentation
Special Notes
- TaskRabbit: More autonomy = weaker misclassification claims but better dispute resolution
- Handy: High control = strong misclassification case, settled $36M class action
Freelance (Upwork/Fiverr)
Recommended Approach
- Non-payment: Use platform dispute resolution, escrow protection
- Client disputes: Resolution center mediation, then arbitration
- Account issues: Support ticket system with documentation
- Fee disputes: Review TOS, contact support with specific concerns
Best Practices
- Keep all communication on-platform for protection
- Use milestones/escrow for larger projects
- Document scope clearly before starting
- True marketplace model = less misclassification risk
Last-Mile (Amazon Flex/Shipt)
Recommended Approach
- Pay disputes: Email support, escalate through proper channels
- Deactivation: These platforms have highest deactivation rates - document everything proactively
- Misclassification (Amazon Flex): High control = potential claim - consult attorney
- Block/scheduling issues: Document patterns, contact support
Special Notes
- Amazon Flex: 14-day arbitration opt-out (shorter than most!), high deactivation rate, PAGA claims filed
- Shipt: Pay transparency concerns since 2023 changes, Prop 22 coverage in CA
12. Resources and Related Tools
Calculators
Unpaid Wages Calculator
Calculate potential recovery for wage claims
Tip Theft Calculator
Estimate damages from tip theft or subsidies
Expense Calculator
Track and calculate unreimbursed expenses
PAGA Penalty Calculator
Estimate penalties for Labor Code violations
Waiting Time Penalty
Calculate LC 203 waiting time penalties
Overtime Calculator
Calculate unpaid overtime amounts
Related Demand Letters
Related Guides
External Resources
- California DLSE (Labor Commissioner) - File wage claims
- DLSE Independent Contractor FAQ
- EDD AB5 Information
- Civil Rights Department (CRD) - Discrimination claims
- US DOL Misclassification Info
Create a Demand Letter
Generate a professional demand letter for your gig worker claim - misclassification, deactivation, unpaid wages, or expense reimbursement.
Employment TemplatesCalculate What You're Owed
Use our free calculators to estimate your potential recovery for wage claims, unpaid expenses, and penalties.
All Calculators