Bucking a trend in the sharing economy, Shyp, the app-enabled shipping service, said today it is re-classifying its couriers from 1099 contractors to W2 employees, making it the first on-demand company with a workforce made up entirely of employees.
“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,” said CEO Kevin Gibbon in a blog post. “This is an operational decision based on our interest in owning the entire, end-to-end Shyp experience; it is not in response to recent lawsuits against other technology companies.”
Newly classified W2 couriers will now get workers’ compensation, and Shyp will pay for their vehicle expenses, in addition to unemployment, Social Security, and Medicare taxes. Depending upon the number of hours worked, Shyp provide additional benefits such as healthcare. Added Gibbon: "This is a huge step forward for Shyp."
Shyp launched in Miami just before Art Basel last year, its third city after San Francisco and New York. It's now also in Los Angeles and headed to Chicago, and it has continued to grow. In an interview earlier this year, Gibbon said the Miami market skews particularly high for international shipments, including art. Shyp now has a team of about 25 in Miami, including couriers, drivers and warehouse technicians, said Johnny Brackett, who heads communications.