SAN FRANCISCO—The first trial over the status of workers in the "gig economy"—or one worker, anyhow—has begun here. The sole question to be decided is this: during the few months Raef Lawson drove for food-delivery company GrubHub, beginning in late 2015, was he an employee or an independent contractor?

It's an intensive, deep dive into one tiny slice of the new breed of apps that make up the gig economy. And if Lawson is successful, the industry could be more vulnerable to other, similar litigation.

The financial stakes in the case aren't high. Lawson's case failed to win class-action status, so he can't ask for damages for anyone but himself. His lawyers' pre-trial brief (PDF) estimates the damages on the line at just $586.56. That consists of $286.10 in unreimbursed expenses, $26.84 for 4.75 hours of overtime, and $273.62 for days of work in which he didn't receive the minimum wage.

But Lawson's attorney, Shannon Liss-Riordan, is hoping that Lawson's case will open a chink in the armor of not just GrubHub but the whole gig economy. If Magistrate Judge Jacqueline Scott Corley rules that Lawson is an employee, he—and others—could conceivably move forward with higher-value claims under the Private Attorneys General Act. It could also strengthen various class-action cases, including one brought by Liss-Riordan, arguing that gig economy workers have been mistreated and underpaid.

Conversely, if Grubhub's lawyers wipe out Lawson's case on this first question, it will be a chilling signal for other plaintiffs seeking to challenge their "gig economy" employers.

Employees are entitled to minimum wage, overtime, meal periods and rest breaks, and their employers must cover insurance and part of social security. Those payments aren't required for independent contractors.

Scheduling in a “mad scramble”

In her opening statement, Liss-Riordan carefully portrayed the present battle as a narrow one. "We are not going to take on the whole gig economy," she said.

She spent some time introducing her client. Lawson is an aspiring actor in his mid-30s who has worked a series of day jobs to make ends meet since graduating from college in New York. After several years working as a security guard in New York, he moved to Los Angeles in 2012, enrolling in an MFA program at Loyola Marymount. After a year, he dropped out to pursue acting. Since then, he'd held a series of flexible "gig economy" jobs to make money while keeping his schedule flexible for auditions and other creative pursuits.

The job at GrubHub didn't make Lawson an independent businessman of any kind, Liss-Riordan argued. He was just a guy with a job who got told what to do by his bosses, just as many employees do.

She started with his schedule. Lawson worked in shifts called a "block," in which he agreed he'd be online and available to pick up food orders from the restaurants that GrubHub worked with. When working a particular block, he didn't have much choice at all about what orders to take. When the app offered an order, if he didn't grab it by hitting "accept" within about 10 to 20 seconds, it would be counted as a "rejection." If a driver didn't hit an acceptance rate of 75 percent, later increased to 85 percent, they wouldn't make the guaranteed wage rate that GrubHub promised and would ultimately risk termination. Due to a glitch in the app that drivers called "ghost orders," hitting an acceptance rate of 75 or 85 percent pretty much meant they had to take every order that came down the pipeline, Liss-Riordan said.

As for those scheduling blocks, workers had to compete in a "mad scramble" to get the desirable blocks. As a result, Lawson didn't have much control over his schedule at all, she argued. GrubHub gave the most desirable blocks to its preferred drivers, handing out "priority scheduling" to drivers that it believed performed well.

"This is another way that GrubHub kept its drivers in line," she said, "just like you might see waiters at a restaurant, hustling with a manager, trying to get the shifts that they want."

When workers didn't log in quickly once their "block" shift started, they'd be contacted by GrubHub managers in Chicago. If they didn't accept enough orders, they could get logged off and lose the rest of their shift. In addition to GrubHub maintaining control over time, it managed geography, too. Lawson had to stay in a particular "zone," and if he ventured out of one for a delivery, he had to return.

And as for that guaranteed rate, which for most of Lawson's employment was $15 per hour, that was pretty much all the money he got, Liss-Riordan said. Later, GrubHub dropped the guaranteed rate to $11 per hour. The times Lawson didn't get the guaranteed rate, because he failed to hit the right acceptance rate, GrubHub paid him $9 an hour, the California minimum wage.

In other words, Lawson got an hourly wage—one that was up to his employer, not him. Furthermore, he was working a set schedule that was mostly up to his employers.

Liss-Riordan tried to cut off one of GrubHub's most powerful arguments by acknowledging that Lawson worked for two competing services, Caviar and Postmates, at the same time that he worked for GrubHub. Liss-Riordan acknowledged that happened, particularly toward the end of Lawson's employment, when the guaranteed rate dropped to $11 per hour. The times when Lawson was logged into more than one app constituted less than 7 percent of the time he was on the GrubHub app.

And despite GrubHub's insistence that it had no problem with its workers also serving competing companies, Liss-Riordan says she'll have testimony from GrubHub managers showing that they "wanted drivers to be focused on doing work for GrubHub."

“Only an #actor”

"Mr. Lawson has done something many people aspire to, but not many achieve," said Theodore Boutrous, an attorney for GrubHub. "He's his own boss."

Boutrous showed Lawson's IMDB page up on the screen, featuring his various stints in TV episodes, commercials, and Web-based comedies. Pursuing an acting career, as Lawson is, requires "as much flexibility as possible, and the GrubHub platform gave him that flexibility."

He then used Lawson's own Twitter feed to push the point home, showing a tweet from January 29, 2016. "Only an #actor spends his #Fridays doing this," wrote Lawson, as he donned a historical costume. It was a day he had also worked a shift for GrubHub, noted Boutrous.

"That's something you couldn't do as an employee," Boutrous said. "Mr. Lawson had that freedom and flexibility because he's an independent contractor."

Lawson had no set schedule, no required hours, no interview process, and "no boss," said Boutrous. The aspiring actor signed up for 11 different "gig economy" platforms and did paid work for at least three of them—GrubHub, Postmates, and Caviar.

The schedules did come in blocks, but Lawson was assigned a block or told which one to sign up for, Boutrous said. It was Lawson who decided what car to drive, what route to take, what to wear, and what to say to customers. He could have passengers in his car if he wanted to; he could give cards out and solicit business for himself.

Boutrous went over the contract Lawson signed with GrubHub, in which he declared he knew himself to be an independent contractor, not an employee. "That's important, but not everything," Boutrous said.

Lawson also said in his deposition that he told people he was an "independent contractor" when asked what he did for a living, or said he worked "mainly gig economy" to make money.

"The reason he knew he was an independent contractor is because he had complete freedom to do anything he wanted," said Boutrous. "To stay home, to go to an acting audition, all kinds of things."

As for the "guaranteed rate" that Liss-Riordan said was basically an hourly wage, Boutrous called it a "true-up" that was an "incentive" to lure contractors even when the demand might not be as high as expected.

"It wasn't meant to be the maximum or the goal," said Boutrous. "The system was designed for drivers to make more." He continued:

Mr. Lawson figured out the true-up system. He really worked it. Towards the end of the relationship, he overdid it, and he went too far. Among other things, Mr. Lawson found a way to get paid the true-up amount on days when he never performed a single delivery, and never left the house.

Was that why Lawson was fired from the platform? Boutrous didn't say, but he did say it wasn't for the reasons Liss-Riordan suggested. "You're going to hear evidence about what the actual reason was," he promised.

GrubHub started in Chicago in 2004 to facilitate food deliveries from restaurants that had their own delivery personnel, Boutrous explained. Essentially, it was an online marketing company for restaurants. It was only in 2014 that GrubHub expanded to have its own delivery services, and that still is only a small part of its business. Out of the 1,000 markets in which GrubHub operates, there are just 70 where it hires drivers to facilitate food delivery.

A bit after 2:00pm on Tuesday, Lawson took the stand, wearing a gray suit, blue shirt, and light-gray tie. He went through his background, the odd jobs he worked after college, and moving from New York to Los Angeles. After that, Liss-Riordan started to dig in to some of the details of his work at GrubHub, but at 3:00, testimony ended for the day. Lawson will be back on the stand today.