Organizing Archives : Wade Rathke: Chief Organizer Blog

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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New Orleans Traveling in other cities both in the United States and around the world, it sometimes seems like food delivery workers are everywhere on either scooters or bicycles. The soft box on their backs or the hard one behind their seats to hold containers of food and keep it all warm until they show up at some customer’s door are huge as if they were trekking up a mountain side with a logo emblazoned on their backs in this heavily competitive industry. UberEats, Postmates, DoorDash are all big in the United States and in some other countries where you will also find Deliveroo, Caviar, and the like.

The industry seems populated by new immigrants and young workers. The business model attempts to claim the workers as subcontractors. California has increasingly moved to classify such platform or app-based workers as employees rather than direct hires entitled to standard laws and protections, but elsewhere progress is slow in the United States.

In a major breakthrough in building a union of these workers, a recent decision of the Ontario Labour Board on this question in Canada is huge, as they ruled the workers were entitled to formally be recognized as a union, organized by the Canadian Union of Postal workers (CUPW), because they were not independent contractors. Their decision countered that of their employer, Foodora, a German-owned delivery company. The Toronto Star reported that…

The decision accepts CUPW’s position that couriers are dependent contractors — a middle ground between traditional employees and independent contractors that gives workers the right to join a union. The board pointed to a long list of contributing factors, including the fact that Foodora maintains a “Strike Log” that monitors couriers’ behaviour and job performance. Couriers were sometimes disciplined by Foodora or even “de-activated” from the app for poor performance. The board also found that couriers have little opportunity to act as true entrepreneurs. Their pay rates are set by Foodora and they are not given the opportunity to negotiate their contract with the company. Their access to shifts is also controlled by Foodora. Couriers also cannot develop their own relationships with restaurants or customers, or sub-contract work to other couriers. Foodora argued that its couriers were independent entrepreneurs in part because they could freely work for competitors like Uber Eats. The board rejected the argument. “This is not entrepreneurial activity,” the board ruled. “It is hard work.”

This decision could create opportunities throughout Canada and establish precedents elsewhere.

Our partner, ReAct in France, had organized a conference in Brussels in late 2018 of unions interested in organizing platform workers. Recently, I interviewed Callum Cant, an ACORN member and activist in Brighton, England, on Wade’s World about his experience as a bicycle rider for Deliveroo that he also covered in his recently published book, Riding for Deliveroo: Resistance in the New Economy. Callum participated in the strike organized by Brighton drivers taking advantage of central collection points and communicating with each other via WhatsApp, as well as other actions in London and elsewhere.

Workers are rising to confront a very predatory business model. Before reaching into your pockets to support these companies ripping off both workers and consumers, we need to understand how the wheels are grinding all of down much better.

Wade Rathke: Chief Organizer Blog

Founder of ACORN, Chief Organizer at ACORN International, Author of Citizen Wealth, Global Grassroots and The Battle for the 9th Ward.

Category Archives: Organizing

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