Waitr drivers were notified Monday that they will soon become independent contractors instead of hourly employees — a move that will likely cut costs for the struggling company that is under pressure to deliver $30 million in savings promised to investors in late 2019.
Waitr told drivers in an email obtained by The Acadiana Advocate that the change will provide "valued drivers with benefits above and beyond what is offered today." Drivers said the change is simply a cost-cutting move that will not benefit them.
Waitr Holdings Inc. quietly laid off an undetermined number of employees Monday morning while publicly announcing plans to refocus operations …
Multiple people who work for the Lafayette-based restaurant delivery company said the change will affect about 13,000 drivers across the country. It was not immediately clear how many people drive for the company.
Waitr spokesman Dean Turcol declined to comment for this story.
When Waitr first launched in south Louisiana markets five years ago, most drivers worked as independent contractors. Within months, however, new drivers were hired as hourly employees instead. The company's few remaining independent contractors became hourly employees in August.
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Now, all Waitr drivers must sign agreements as independent contractors or lose their jobs delivering for the company.
"I can come back as a contract driver if I choose to, but I am definitely looking elsewhere," said a Waitr employee, who asked to speak anonymously for fear of losing his job. "It definitely hurts to see this happen to what was once a stand-up and profitable company."
Those who do continue delivering for Waitr will waive their rights to class-action lawsuits and "almost all disputes between the contractor and company," according to the independent contractor agreement Waitr sent to drivers Monday.
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Waitr will have fewer responsibilities for drivers under the new classification, but they'll also have less control over drivers, which could create problems for restaurant partners and customers who have complained about unprofessional Waitr drivers in the past.
Tim Metcalf, who owns Deano's Pizza, said last month that his Waitr representative assured him the company had more control over drivers because they were employees. Metcalf said he demanded better Waitr services because his rates as a restaurant partner were once again increasing.
"We asked them to step up their game," Metcalf said during the January interview. "We were seeing long waits, staff looking disheveled and not professional. Some of the drivers had bad attitudes."
Adam Price isn't your typical turnaround CEO.
Like any company, Waitr cannot legally require independent contractors to wear uniforms or use certain equipment.
Waitr might, however, encourage drivers to wear or use items with the company's logo through an "incentive fee," Waitr's independent contractor agreement said.
Today's gig economy relies on independent contractors to fulfill food delivery and ride share services.
Companies such as Uber and GrubHub have been challenged in court for classifying drivers as independent contractors instead of employees, but judges have ultimately ruled in favor of the companies.
Meanwhile, hourly Waitr drivers filed a class-action lawsuit last year claiming they were making less than minimum wage in violation of federal law. That case is still making its way through the court system.
Waitr, which offers services across Louisiana and about 700 small- to mid-sized cities across the country, had a tumultuous 2019.
The company started the year on a high note, with stock reaching a 52-week peak of $13 a share in March 2019. The company even acquired a similar-sized competitor, Bite Squad.
But the merging of operations proved to be a rockier task than the company anticipated. The second half of 2019 looked much different for the tech company.
Waitr's top leadership resigned. Hundreds of employees were laid off. Restaurant partners protested contract changes.
Founder Chris Meaux resigned as CEO, and Adam Price, his replacement, resigned after just four months on the job.
The company's stock fell below $1 per share and has been warned by the Nasdaq stock exchange that it may be on the path to delisting if it doesn't pull its closing bid price above $1 per share by June.
Waitr's stock was trading around 32 cents per share as of Monday afternoon. The company is expected to release fourth quarter earnings in the coming weeks.
Advocate Staff Writer Kristen Mosbrucker contributed to this report.