Vittles 6.5 - Delivery Apps

They Ride For You, by Michelle Meagher

In the first Vittles newsletter I slipped in a ‘Deliveroo are like the mafia’ comparison and since no one complained, I’m just going to assume we are all on the same page. Like Uber, I can’t really remember when I first heard about delivery apps - one day they weren’t there and the next they were everywhere and seemingly indispensable. Over time we learnt about how Uber operates, about how it disrupted the system through not actually employing workers, by operating at a loss because what it charges isn’t actually enough for it to make a profit. But slowly, stealthily, it kills the competition. Some of us deleted the apps from our phones, some of us pretended to but still use it occasionally: I get it, cheap transport is difficult to turn down, especially if you’re drunk. But who really needs delivery apps?

When actual restaurants started signing up to Deliveroo I thought it sounded absurd, a reduction of the entire restaurant experience to a piece of food that surely would not be as satisfying as eating it in person. Like many things, I’ve been proven wrong. People did want this food. Time is precious - why spend 90 minutes waiting and dining in person when you can sacrifice a little bit of quality and get it in your house. And even more bafflingly, restaurants seemed to want it too. At an Eater London talk last year, Zan Kaufman from Bleecker Burger was clearly ambivalent about delivery apps (refreshingly stating the obvious - that Bleecker’s fries suffer massively in the process) but also admitted that it’s impossible to stop. It’s simply too much of a money earner: enough to keep restaurants afloat in an industry that is being squeezed and squeezed from every side. And like that, slowly, stealthily, it kills the competition. The competition, I believe, is restaurants themselves.

At the end of that talk, someone from one of the apps was asked what the endgame was, and the idea of Deliveroo or Uber Eats taking over restaurants was strenuously denied. But the endgame is to make as much profit as possible: dark kitchens are a big part of this. Last year, while researching a project, I noticed three separate Chinese restaurants on Deliveroo operating from one unit in Spitalfields, all with different branding (Sichuan, Dongbei, hotpot), with no indication that these restaurants did not exist. At the risk of sounding like a Luddite I find this sinister (tbh, if you don’t want me to find it sinister, don’t call them dark kitchens). The jump to Deliveroo operating their own kitchens and restaurants doesn’t need a stretch of the imagination. But I find the treatment of those who work for delivery apps the most sinister thing of all, where the definition of ‘work for’ has been twisted so these people don’t even count as employees.

In today’s newsletter, lawyer and author Michelle Meagher explores the precarity of those who “work for” delivery apps, the drivers who have been hand delivering all your food yet have close to zero employment rights. This was an issue before the pandemic and it is a greater issue now. Not only do these workers need to be paid and protected, their exploitation represents an existential threat to restaurants themselves. Deliveroo’s profits may be down but their importance in the ecosystem is only set to increase; an injection of investment from Amazon to mask their loss-making strategy may make them invulnerable. If you use these apps regularly, read Michelle’s essay and then question whether you really need them, if you can change your habits to pick up food, or to call instead of ordering at the click of a button. And if you do use the apps, then follow the tips provided by RidersRoovolt. The first priority is to make sure delivery drivers are not exploited further during this crisis, but afterwards we have to consider if we’ve become too reliant on the delivery apps, and what the future of restaurants holds if their power increases at the expense of the workers who really do ‘work for’ them.

They Ride For You, by Michelle Meagher

The COVID-19 crisis has laid bare an obvious truth that has been repeated again and again over the last few weeks: many of those paid the lowest wages in society actually perform the most vital services. Key workers, from nurses and supermarket “shelf-stackers” to those working in food processing plants and distribution, have not been highly valued. This has always been the case, but what has changed in the twenty years is technology.  Technology platforms, and the companies that create them, play an increasingly important role in doling out work, as well as shaping whole industries - like food and retail - that used to offer reliable jobs for those with few qualifications who are often treated as replaceable.

Technology, more specifically the proliferation of delivery apps, has allowed an army of food delivery drivers to blanket the nation in response to the crisis, constantly putting their own health at risk without adequate employment (or physical) protection. From the beginning of the crisis there was a concern that riders for Deliveroo, UberEats and JustEat were being put in an impossible position: already working precariously with very few protected rights, they faced a choice to stay off work if they had suspected symptoms, with the prospect of no or limited sick pay, or to keep working but risk leaving a trail of infection in their wake.  “Replaceable” starts to look like “disposable”.

The disposability of delivery workers is directly linked to their employment rights and their relationship with the new delivery apps. Last year, the High Court sided with Deliveroo in its claim that its riders are independent contractors rather than employees, and would also not fall into the slightly less expansive category of “workers”, who are guaranteed minimum wages. The case turned on a legal provision in the riders’ contract which technically allows them to send another rider in their place to complete a job. Some riders do occasionally take advantage of this but for the rest it stretches absurdity to argue that they don’t “work for” Deliveroo during their riding hours. When it became clear that the government’s Job Retention Scheme would not protect “independent contractors” the Independent Workers Union of Great Britain threatened to file a lawsuit accusing the Chancellor of discriminating against platform workers

Eventually a relief package was announced that would protect 80% of the average earnings of the self-employed, although they have to wait until June for payment. Yet the problem remains that the classification of delivery riders outside the cocoon of employment leaves them in a vulnerable position.  Employees are given a host of protections because it is assumed that they face a powerful counterparty: their employer. Independent contractors, by contrast, are assumed to be powerful in themselves - free to flit from one contract to another, therefore not needing rights to job security or protection from unfair dismissal. 

We need the law to catch up with the reality of this work and to acknowledge the genuine disempowerment that these workers face. This is why some resist the term “gig economy” as it connotes a level of freedom that is not experienced by those working within it.  The High Court case was actually about Deliveroo riders wanting the company to formally recognise their union - a right that is not granted to independent contractors. Even worse, if Deliveroo workers were to attempt to collectively bargain without recognition then they might find themselves engaged in an illegal cartel under competition law, which prohibits independent businesses - like contractors - from cooperating over things like prices, which in this case means collectively setting their wages. The European Commission is considering how to grant exemptions to platform workers from competition law to protect their right to dignified work, but again the law is playing catch-up.

Meanwhile, Uber’s latest campaign is to get the US Congress to erect a liability shield that will allow it to provide just the sort of protections that an employer might during a time of uncertainty - along the lines of the elusive Deliveroo Hardship Fund in the UK - but without the risk that later on this act of solidarity may be used as evidence against it to prove that its riders or drivers are employees after all.

What is most remarkable about companies like Deliveroo and Uber is that they are yet to turn a profit, but investors are still willing to pour in billions in the hope of a slice of future monopolistic returns. They are banking on the fact that with every expansion into a new market, these companies are creating an infrastructure of restaurants, delivery and customers that allows them to act as gatekeeper for anyone wanting to make money delivering food to people’s homes. 

It’s not just the physical infrastructure either, Deliveroo gets access to granular data on consumer tastes and order patterns.  This is surely part of the logic of Amazon’s investment into Deliveroo, which has been provisionally cleared by the Competition and Markets Authority (CMA).  The CMA was initially concerned that the deal would restrict competition by reducing Amazon’s incentive to develop its own delivery service – like the Amazon Restaurants offering that it shuttered in 2018 – and lessen its need to expand the grocery delivery capacity of Amazon Fresh.  But these concerns have been assuaged by Deliveroo’s claim that it will imminently shut down without the investment, as the company claims that its financial position has become untenable as a result of COVID-19.  It is hard to believe that there is no other possible investor than Amazon, and the CMA should look very carefully at the foothold that Amazon will gain in the market even from just a minority shareholding and an influential board seat.  Claims that Amazon has no designs on Deliveroo data, should be taken with as much salt as Facebook saying it won’t integrate data from WhatsApp.

For restaurants and delivery workers it was a grim and uncertain future even before COVID-19.  Deliveroo can only be consistently profitable if it uses its scale and bargaining power to increase the margins from (ie. exploit) restaurants and delivery workers. The ideal for the company of course is to do away with the delivery worker altogether. With dark kitchens, they are also working on doing away with the restaurant. Diners that enjoy the convenience of high-end cooking delivered right to their door should be wary of the pressure on Deliveroo to scale-up food production by mass-producing meals either in conjunction with restaurants or under their own Deliveroo Editions banner. We should not be surprised to see Deliveroo and others rising to the challenge of feeding the nation in the time of the crisis by further embedding themselves as a conduit to our front doors. Deliveroo’s pre-crisis deal with Co-op, and the more recent deals with M&S and Morrisons to deliver essentials to those in isolation, are part of that strategy.

Customers wanting to support the food industry face an awkward dilemma. What is best for struggling restaurants is to order directly from them and to collect the food yourself, if your quarantine situation allows. This completely avoids the Deliveroo commissions, but probably won’t help delivery riders. Meanwhile, not all restaurant staff will be employees eligible for furlough, and pivoting to takeout will not save all establishments. For those restaurants that want to, or need to, maintain some delivery service but do not have their own drivers, they must thread their way carefully between the Scylla of punishing commissions from the delivery platforms – on the order of 20-30% – or the swirling vortex of insolvency, a devastating Charybdis. The industry stands teetering on the brink of ruin.  

But in the crucible of crisis fresh approaches may be forged: the York Courier Collective launched just a few weeks ago and seeks to offer riders a way to actually work for themselves, beyond the charade of independently contracting to Deliveroo.  With a deep global recession looming, business models that share the benefits of the food industry broadly and which increase democratic participation in the economy – especially for those who have been most disempowered – will be crucial to any recovery.  The cooperative model may also hold promise for others in the restaurant business. The London Restaurant Cooperative is a non-profit grouping of recently unemployed chefs and waiters set up by Stephen Tizer, one of the owners of Le Bab. Cooperative models not only give a stake to their members but they often have different priorities, which may allow for lower margins than Silicon Valley investors have come to expect from tech platforms. It may therefore be especially suited to uniting the shared interests of restaurants, riders and customers in good food reaching a wide market.

For delivery riders, the key elements of any fair, post-crisis future will be equitable pay, and an employment status that reflects their relationships with the tech platforms.  Deliveroo and others should be forced to share their market power, achieved on the back of those workers.  They, not the likes of Amazon, should be given representation at board level and perhaps an equity stake.  We should bolster cooperatives wherever we can, including through government support. Restaurants, and the jobs which surround them, have always been a way out of poverty, especially for immigrants - if they are to survive then we need to look at how those lowest in the chain are treated.  Delivery riders should be given more control over their destiny and more recognition for the key work that they do for us all - ultimately this means adequate pay, rights, and most importantly of all, power. 

Michelle Meagher is a lawyer who writes about corporate power and food.  Find her work @michmeagher on Twitter and her writing about food @somewhereeats on Instagram ,where she explores how place, culture and heritage relates to the food on our plates.  Her book “Competition is Killing Us: How Big Business is Harming Our Society and Planet - and What To Do About It” is coming out in September. Michelle waived her fee for this article.

The illustration is by Ada Jusic, who specialises in illustrations with a political or social context. You can find more of her illustrations at https://adajusic.com/ . Ada was paid for her work.

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