Updated from 11:38 a.m. to include comments from industry experts throughout the story.
NEW YORK (TheStreet) -- As Silicon Valley debates the way on-demand startups classify their staff, on-demand delivery startup Instacart is expanding an offer for more of its personal shoppers to become part-time employees.
A California ruling last week shook the on-demand industry, finding that an Uber driver was in fact an employee, not an independent contractor. Though the ruling dealt with one specific driver, the case could have real implications for the dozens of startups that revolve around a business model of hiring independent contractors.
At a $50 billion valuation, Uber may be the most famous, with its business plan depending on the fact that its drivers are not classified as employees. If it had to provide benefits and salaries for its 22,000 drivers in San Francisco alone, the costs would certainly hit hard.
While the rest of the startup world continues unchanged and waits to see if any further legal action impacts them, Instacart -- which delivers groceries within two hours ($3.99 for two-hour delivery and $5.99 for one-hour delivery) -- has already been taking matters into its own hands.
Back in February, Instacart, which has raised $275 million in funding at a $2 billion valuation, decided to let its Boston personal shoppers--not drivers--opt to become part-time employees. Today, it expanded the test to Chicago, and according to Instacart's vice president of communications Andrea Saul, Instacart plans to expand to other cities as well though the company does not yet have a timeline.