App Delivery as Part of the “Care” Industry

New Orleans        I’m scratching my head trying to figure out what kind of sand platform applications around food delivery are built on.  The workers are hardly paid, precarious and unhappy.  The restaurants are complaining and organizing for protection in some cities, and trying to figure out how to make money on the promise of added customers.  The pricing is predatory and exorbitant with the delivery companies pyramiding fees and charges by adding delivery and servicing fees on top of each other to add one-third to almost a doubling of the costs for the meal when the tab is paid.  Uber Eats, DoorDash, Postmates, GrubHub, and others are all in and out of fashion as tech darlings with gazillions of investor money for operations that are bleeding money as fast as their delivery people can run up the door to drop the food.

Talking recently to ACORN member in Brighton, England, and former Deliveroo driver, and author of Riding for Deliveroo, Callum Cant, he made two points on Wade’s World that keep coming back to me as an explanation for these huge contradictions.

First, remember that he noted that most of the food they are delivering is not the give-me-a-treat-of-a-special-dinner-at-home thing.  It’s exactly the kind of fast food that the New York Times reporter priced when he did his comparison shopping at Subways and Panda Express.  In fact, it’s fast food outlets like McDonalds where Deliveroo drivers congregated, because that’s where the orders were flying off the shelves.  It is also the fast food companies that are negotiating special deals with certain delivery services that are making some of them seem potentially profitable.  McDonalds, pizza places, and the like are essentially subcontracting delivery that they used to do themselves or wanted to do without the sunk cost of employees and benefits.  As Cant pointed out, the marketing is gourmet, but the product is cheap and greasy.

The second observation Cant offered that seems especially spot on, is that this only makes sense if you see it as part of the “care” industry.  In the United Kingdom care workers are what North Americans would call healthcare, nursing home, or home care workers.  People are using these services because they are too exhausted to cook dinner, making the Times’ reporter’s suggestion that they make something at home and healthy miss the point entirely.  Cant noted that customers are almost always ordering at the low end of the menu and doing so at fast food outlets and similar spots.  The customer base is not high end, but working people just a smidgen less precarious than the workers themselves, running between part-time jobs, school, and families, and trying to finally collapse for a minute and have the food appear quickly despite the price, all of which defines a predatory operation.

The business model for platform capitalism, as many call it, is rooted right at the hard, sharp end of global capitalism itself and sweating out the last dollars, pounds, and euros from families who have been squeezed by work and the loss of any leisure then forced to eat crud and pay for it through the nose.  This is an insufferable business model for everyone.  It’s hard to believe it’s sustainable.

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Delivery Apps Rip-off Workers, Customers, and Even Restaurants

New Orleans        DoorDash allowed sources to whisper to the Wall Street Journal that they were preparing to go public and cash in from investors despite losing money in its business.  They need to hurry, because reality is starting to catch up with all of these predatory food delivery operations.  Their workers are organizing in reaction to low wages, bad working conditions, and misclassifications.  Restaurants are protesting in New York City and elsewhere about the ways that delivery services rip them off on fake trips and general price gouging.  Who is benefiting other than these platform app-companies, their founders, and angel investors?  If it’s not their workers or their suppliers, is it their customers?

It doesn’t look like it from a story in the New York Times called “Delivery App Fees Leave a Sour Taste” by Brian Chen.  In a bit of not-so-secret shopper work, Chen priced the cost of ordering a meal at Subway and Panda Express and comparing the pricing of four delivery services Grubhub, DoorDash, Postmates, and Uber Eats.  Trust me on this.  If you have never used one of these delivery apps, don’t start now unless you just won the lottery.  If it’s on your phone, swipe and wipe that baby off of it now!  The markups were absurd!

Uber Eats was the worse and Postmates a solid second on a Subway order that jacked the bottom-line price using Uber 91% and Postmates rolled the customer for 62%.  I know you’ve eaten at Subways, so don’t lie to me, since we all have.  On two small turkey sandwiches which would have cost New York’s Chen $13.21, Uber hit him up for $25.25 without a tip with a range of fees.  They charged him $3 bucks, because it was a “small order.”  They added a 15% service fee and then a $3.99 delivery fee.  Yes, we would think that the delivery fee was in fact the service, since that is the only value that Uber is adding, right?  But, maybe the 15% bite was the service in which case what was the other $3.99 other than pure and simple rent-seeking as the economists call it.  Postmates on the Subway order charged only $2.99 for the delivery fee but went long on the service charge at 16.4%, probably figuring that none of the customers could do the math in their heads, but would be fooled by the lower so-called delivery fee.

These national chain food services are adding a takeout fee of a couple of bucks as well, which some of them can get away with, but small outfits end up losing money on these deals.  ACORN Global Enterprises doing business as Fair Grinds Coffeehouse tried Uber Eats, but bailed quickly during the trial period before having to start paying the monthly participation fee and buy the iPad, because it was clear we would lose money on each order, and Uber had no way to really bring us customers as they claimed or keep the coffee and food hot enough to make our customers happy.  No surprise that small outfits in New York City are banding together to fight the fees.

Chen found the costs even crazier at Panda Express where a family-size order of Chinese food that with sales tax would have run $42 saw a fiver on top from Panda Express and then markup from the four companies from 37% at the low from Grubhub to 49% at the high from Uber Eats.  His message was either go to the restaurant itself because now it “looks like a bargain” or eat at home.

Why are people allowing themselves to get ripped off like this by these app-scammers?  Let’s try to figure this out before they show up at your door.

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Please enjoy Lucinda Williams – You Can’t Rule Me

Thanks to WAMF.

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