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What Grocers Need to Know About the Gig Economy

Demand for better compensation might drive delivery service in-house

Gig workers are not happy. Companies such as Uber Eats, Deliveroo, DoorDash, Instacart, Foodora and others have been blamed for cheating workers on tips, refusing to compensate workers for injuries, lowering pay rates, increasing driving distances and refusing to recognize workers as employees as a way of circumventing the costs of benefits. Some places such as California are trying to change that through legislation.

In the meantime, these workers are not just sitting idly by. They have been busy organizing unions. Foodora delivery workers in Norway and Uber Eats couriers in Japan have succeeded in forming the first unions at major global food delivery platform companies, and with that, new rights and benefits on the job.

Instacart workers nationwide went on strike in early November for three days to protest what they say are worsening working conditions in the form of declining wages, cuts to their tips and having to drive longer distances.

I was contacted by a very disgruntled worker here in Los Angeles a few years ago who shared with me how Instacart’s gig workers were turning to Facebook forums across the country to unite and air their grievances against the company, and I’ve been following their discussions since. Clearly, Instacart has as well, because it continues to make changes to its compensation programs to try to alleviate some of the concerns. But many of these workers are still upset and feel they are being cheated.

So why fight? Why not just leave and find another job in this economy where many jobs are unfilled?

Many gig workers like the schedule flexibility and the actual work, so they are willing to fight to keep these jobs; they just want to be treated and compensated fairly.

Uber Eats couriers in Japan formed the global food delivery platform’s first union in early October. The union aims to fight for “safer and more stable working conditions for all platform workers,” its chairman said at a press conference. There are an estimated 15,000 Uber Eats couriers across 10 cities in Japan—none of whom receive workers’ compensation or unemployment insurance because of their status as contractors.

Uber said it would implement an injury compensation program for its Japanese workers beginning Oct. 1. The company said it would pay up to $93,000 in the case of death.

After a five-week strike in Norway, delivery couriers for the app Foodora, a food delivery platform that operates throughout Europe, Canada and the Philippines, succeeded in reaching the first collective bargaining agreement between a global delivery platform and a trade union. That contract guarantees compensation for equipment used on the job, including bikes, clothes and smartphones (typically paid for out of pocket by workers), as well as an annual pay increase of about $1,647 for full-time workers.

It is very likely that we can expect the same kind of changes (and maybe unions) to take place here in the U.S. That would lead to dramatic repercussions for companies such as Instacart and Uber Eats.

What does this mean for grocery retailers?

Some will speed up to take delivery in-house, using their own employees who already receive fair pay and benefits. Others may discontinue delivery services altogether and push their customers toward click-and-collect. And there is little doubt that there will be a huge acceleration for autonomous vehicles and drone delivery, which may have the biggest effect on the approximately 55 million gig workers who represent about 36% of the U.S. workforce, according to the Bureau of Labor Statistics.

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