When an Instacart Los Angeles delivery driver gets into a crash, the legal mess that follows just got a lot clearer. On October 14, 2025, the California Court of Appeal, Second Appellate District, came down hard in The People v. Instacart, reinforcing how California AB5 applies to gig platforms. This decision forces companies like Instacart to stop classifying their drivers as independent contractors and start treating them as employees, which completely changes who’s on the hook for liability after a wreck.
Key Takeaways
- The CA Court of Appeal confirmed on Oct. 14, 2025, that AB5’s “ABC test” applies to gig platforms like Instacart, settling the driver classification issue for now.
- Gig companies in California must reclassify most drivers as employees, which means they have to provide benefits like workers’ compensation and unemployment insurance.
- If you’re injured in a wreck with an Instacart driver, your claim should be against Instacart itself, since the company is now much more likely to be held liable for its employees’ actions.
- Instacart drivers need to know their new rights as employees, including the ability to file for workers’ compensation if they’re injured on the job.
California AB5 and the Gig Economy: A Reaffirmed Standard
The court’s ruling in The People v. Instacart makes one thing perfectly clear: the “ABC test” from Labor Code section 2775 is the standard for gig companies in California. This whole case, with the case number B320100, started when the California Attorney General and some city attorneys went after Instacart for misclassifying its shoppers as independent contractors which let the company dodge providing basic employee protections. On October 14, 2025, the appellate court agreed with the lower court: Instacart can’t pass the ABC test, so its drivers are legally employees. It’s a powerful reaffirmation of Assembly Bill 5 (AB5) which has been the law since January 1, 2020, when it wrote the California Supreme Court’s 2018 Dynamex decision into the code.
Under the ABC test, the law assumes a worker is an employee. To beat that presumption, the company has to prove all three of these things: (A) the worker is free from the company’s control and direction; (B) the work they do is outside the company’s normal business. And (C) the worker has their own independent business doing that kind of work. It’s part B that always trips up Instacart and other gig platforms. Instacart’s entire business is delivering groceries, and its drivers are the ones delivering the groceries, you just can’t argue that work is “outside the usual course” of business. This ruling means any company with a similar model can’t keep pretending its core workers are contractors. They have to actually hire them. After years of legal fights and legislative chaos, this decision finally gives us a clear answer, at least for now. You can read the statute for yourself in California Labor Code section 2775 on leginfo.legislature.ca.gov.
Implications for Instacart Drivers and Injured Parties
So what happens now? Instacart and other gig companies in California have to start treating their drivers like actual employees. For drivers, this changes everything. They’re now eligible for benefits they were always denied as ‘contractors,’ including workers’ compensation insurance, minimum wage, overtime pay, sick leave, and unemployment. If you’re an Instacart driver and get hurt in a crash in Los Angeles while working, you can file a workers’ comp claim. That means your medical bills and lost wages get covered, instead of you being stuck with the entire financial hit from a work injury.
This reclassification is just as big a deal for anyone hit by an Instacart driver. There’s a legal concept called respondeat superior: when an employee on the job causes harm, the employer is responsible. Now that drivers are employees, it’s much harder for Instacart to dodge liability. For years, their main defense was “that driver’s not our employee, they’re an independent contractor, so it’s not our problem.” This court decision blows a hole right through that argument in California. So if you get hit by an Instacart driver on the 101 Freeway near Universal City or on a busy street in Koreatown, your claim goes against Instacart, not just the driver. This is a huge advantage because you’re now dealing with a corporation’s multi-million dollar commercial insurance policy instead of a driver’s personal auto policy that might only cover the state minimum. We had a case last year where a food delivery company fought us for 18 months on the single point that their driver was a ‘contractor’, this ruling should put an end to that kind of stonewalling.
Working through a Claim After an Instacart-Related Incident
If you’re in a wreck involving an Instacart driver in Los Angeles, first take care of safety and get medical help. Then, start documenting everything. You need to get the driver’s name, their contact and insurance info, and the car’s make, model, and license plate. Take photos of everything, the cars, the damage, the street signs. Get the exact location, whether it’s the corner of Wilshire Boulevard and Fairfax Avenue or a specific house number in Venice Beach.
After that, your next call should be to an attorney who handles personal injury and employment cases. A good lawyer will immediately start figuring out if the driver was actively on a delivery for Instacart, which is key to the claim. They’ll send demand letters to Instacart’s corporate legal team and their insurers. Don’t be surprised if these companies still try to fight liability, maybe arguing the driver was ‘between deliveries’ and not on the clock. That’s why you need a lawyer, to counter those arguments and make sure you’re pursuing every dollar you’re owed. For specific questions on filing a workers’ comp claim, the CA Department of Industrial Relations has guides on their site at dir.ca.gov/dwc.
You also have to watch the clock. California’s statute of limitations generally gives you two years from the injury date for a personal injury claim (that’s in California Code of Civil Procedure section 335.1). For a workers’ comp claim, it’s often just one year. If you miss those deadlines, your right to file a claim is gone forever, so you can’t afford to wait. Get legal advice fast. Proving a driver was ‘on the clock,’ showing they were negligent, and going toe-to-toe with a company like Instacart and its lawyers isn’t something you want to try on your own. It takes real experience.
What This Means for Gig Economy Companies in California
For Instacart and its peers in California, the court’s message couldn’t be clearer: your drivers are employees. This is a legal requirement, backed by the courts, and ignoring it will bring on massive penalties like back wages, unpaid benefits, and heavy fines. The state is clearly serious about enforcing labor protections for everyone, no matter what app they use to find work. Companies now have to overhaul how they operate, they need to set up real payroll systems, get workers’ compensation insurance, pay into unemployment funds, and follow all of California’s tough wage and hour laws.
Yes, moving to an employee model will cost these companies more. But it also gives them clear rules to operate under, which is better than constant legal uncertainty. Some might try to find a legitimate way to use independent contractors, maybe by changing their business so the work is truly separate or by giving workers total control over their own rates and clients. For now, they must figure out how to comply with the law, which means managing their workforce as employees, not just a collection of contractors. And they can’t just ignore this. As this lawsuit shows, the state will come after them if they don’t.
Future Outlook: Continued Evolution of Gig Law
Gig work law is still in flux, even with a big ruling like The People v. Instacart. This decision makes the ABC test stick, but there are always political moves to create exceptions. Just look at Proposition 22, the 2020 ballot measure that tried to exempt some delivery companies from AB5. It was struck down, then partially brought back, and now the California Supreme Court is going to have the final say. All this legal fighting just shows the constant battle between tech company business models and basic worker protection laws.
No matter what happens with future laws, the reality on the ground in California today is that Instacart drivers are employees. That precedent gives both injured people and the drivers themselves a clear path: it tells them who to sue and what rights they have. It means companies can’t just invent their own rules anymore. Their ‘innovation’ has to follow the same labor laws that have been on the books for decades.
The bottom line from the court’s October 14, 2025, decision is this: Instacart drivers are employees in California. That gives them rights and makes the company liable. If you were injured in a crash with one, you need to talk to a lawyer to make sure you get what you’re owed under the law.
What is California AB5?
California AB5 (Assembly Bill 5) is the state law, effective January 1, 2020, that created the “ABC test” to determine if a worker is an employee or an independent contractor. Under AB5, workers are automatically considered employees unless their employer can prove all three parts of the ABC test.
How does the recent People v. Instacart ruling affect Instacart drivers?
The October 14, 2025, ruling from the California Court of Appeal confirmed that Instacart drivers are employees under AB5. This makes them legally entitled to employee benefits like workers’ compensation, unemployment insurance, minimum wage, and overtime, which they didn’t get as contractors.
If I am injured in a crash with an Instacart driver in Los Angeles, who is liable?
Because of the People v. Instacart ruling, Instacart itself is likely to be held liable for your damages if their driver caused the crash while working. This is based on the legal doctrine of respondeat superior, where an employer is responsible for the actions of its employees on the job.
What steps should I take if I’m involved in an accident with an Instacart driver?
First, make sure you’re safe and get medical care if you need it. Then, document everything you can at the scene, get photos, the driver’s info, and vehicle details. Your next step should be to call a personal injury lawyer who can help you file a claim against Instacart.
Does this ruling apply to all gig economy companies in California?
The ruling was specifically about Instacart, but it’s a strong warning to other gig companies with similar business models. Any company in California that can’t pass the ABC test for its workers should expect to face the same legal pressure to reclassify them as employees.
