In the ongoing debate over “contractor or employee” status for workers within service and tech companies, there’s been a shift for Shyp.
The shipping startup has launched in Chicago, and, of course, it’s news when startups grab another foothold and grow their customer bases. But in this case, the Chicago debut stands as the first time the company’s workers have been bestowed with employee status. No workers at the new hub (or in the company at large in the future) are 1099 contractors.
The employee designation, VentureBeat said on Wednesday (Sept. 30), comes a few months after the company’s chief executive officer, Kevin Gibbon, said that the nationwide plans formulated by Shyp would exclude 1099 contractor classifications. That change affects only couriers affiliated with the company, as Shyp’s fleet of van drivers and technicians at its warehouse operations already have been classified as W2.
The executive told VentureBeat in an email exchange that Chicago, with new market status, gave the company the ability to “start from scratch” with W2 status, a movement still underway for its operations in Miami, Los Angeles, San Francisco and New York. “It’s much easier, operationally speaking, to launch a new city as W2, versus transitioning from 1099,” Gibbon told VentureBeat. As a result, all three dozen employees at the Chicago location are employees, with the rest of the company following through the next several months, the company told VentureBeat.
Such a move may help Shyp avoid the controversy and legal battles that have surrounded on-demand startups and peers such as Uber.
[bctt tweet=”Such a move may help Shyp avoid the controversy and legal battles that have surrounded on-demand startups and peers such as Uber.”]
Opening a window into employee training, Shyp said it mandates a two-week course for its couriers that touches on the logistics process, ranging from warehouse location to shipping costs to back-end functions and even the features and functions of the courier app as opposed to the consumer app.
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