Amsterdam The Department of Labor under the Trump administration is doing all it can to assure app-based tech companies from Uber, Deliveroo, and others that they will bend over backwards to shield them from classification as directly employed workers rather than independent subcontracts. Government agencies in an even greater acrobatic twist in the US are saying that they will give employers a “free pass” if they misclassify workers as subcontractors, seemingly encouraging them to do so until caught without making proper payments for taxes and benefits.
California once again acting as the bulwark against such offenses despite being the home state of many of the tech giants specializing in play-pretend work practices around the fiction of independent contracts is on the verge of passing a bill that would clearly determine such workers to be employees rather than contractors. Besides the Ubers, Lyfts, and wannabes hiding behind apps, it is well known that Google, Facebook, and the rest work hundreds of thousands of contract workers side by side with regular employees in order to save money and keep them out of employment status and benefits. The companies are playing hardball and threatening to raise $20 million to put any law that is passed on the ballot to California voters to overturn it. I haven’t seen the polling, but regardless of the tech war chest, I would bet the odds are not naturally in their favor.
This isn’t just a domestic issue, and the going may be rougher in fact elsewhere in the world. Sitting with colleagues in Amsterdam in preparation for a more extensive meeting, one told how taxi strikes had pushed Uber out of Barcelona recently when they visited and talked to local activists in Spain.
An official from the Netherlands Trade Union Federation (FNV), the largest union in the Netherlands, had successfully engaged Deliveroo and its delivery driver exploitation. In Netherlands, achieving a certain threshold, unions are able to negotiate collective labor agreements for entire sectors. FNV argued that delivery was covered under their sector agreements for retail and warehousing. The government had stalled, claiming the need for study and saying it was complicated. FNV sued and easily won the case. The government is still foot dragging he reported, and Deliveroo has challenged the ruling in their own suit, but right now the union clearly has the whip hand and is using it well.
In Mumbai, India, these delivery operations both international like Deliveroo and locally-based are facing a different kind of problem. Smaller restaurants are banning together and striking in their words by refusing to accept orders. Their issue is the exorbitant fees, often 25%, being charged by the delivery companies for their service which are forcing the food establishments to lose money on every order. Our own social enterprise, Fair Grinds Coffeehouse, walked away from all delivery inquiries after a one-month trial with Uber Eats that quickly convinced us that there was no way it benefited the coffeehouse, workers or anyone but the Uber people.
The business model seems predicated on worker exploitation to save money and sourcing exploitation on unprovable claims of customer expansion. Customers may enjoy transitory cost savings and convenience, but the model ultimately seems unsustainable when based on such sinking sand.