NY court rules Postmates couriers are entitled to unemployment benefits

The decision is a big win for gig economy workers.

Gig economy workers in New York won a significant battle this week after the state's Court of Appeals ruled in their favor against Postmates. Supporting a previous state decision, the court said Postmates couriers should be considered employees for the purposes of unemployment insurance. Moving forward, the company must support its contractors by paying into New York's Unemployment Insurance Fund on their behalf.

In the original decision, New York's Unemployment Insurance Appeal Board said Luis Vega, a former courier with Postmates, was entitled to employment insurance benefits after the company fired him. In its subsequent decision, the Court of Appeals argued Postmates effectively "dominates the significant aspects" of a courier's day-to-day by controlling where, when and to whom they can deliver food to while they're on the job. The court's judges felt that created an employer-employee relationship that exceeded the "incidental control" Postmates said it had over its couriers.

"The courts have solidified what we all have known for a while -- delivery drivers are employees and are entitled to the same unemployment benefits other employees can obtain," New York Attorney General Letitia James said. "As the nation battles the spread of the coronavirus and more and more employees are laid off, Postmates drivers should know they have the same safety net millions of others in New York have today." We've also reached out to Postmates for comment, and we'll update this article when we hear back.

While working for companies like Postmates and Instacart has always been something of a precarious proposition, the coronavirus pandemic has laid bare just how little job security gig economy workers enjoy. In a recent investor call, Uber CEO Dara Khosrowshahi told investors the company's ride volume has decreased by as much as 60 to 70 percent in cities hardest hit by the virus. In Uber's case, a lot of its drivers have been forced to take on delivery jobs to make up for the loss in income, putting themselves at further risk of getting sick with COVID-19.