The wear-and-tear is going on employee vehicles rather than company vehicles, the additional distance they travel will increase their personal insurance rates, and as with rideshare they will need to pay additional riders on their policies. (If they don't have the riders their policies will be canceled as soon as they make a claim!)
These additional costs make the deal worse for employees and better for Walmart in ways which are hard for the workers to understand. But I guarantee you that Walmart has studied it to death and knows exactly what advantage it brings them!
I assume that's because of "we only want people on this who are insurable drivers in good standing to begin with" and not because of "we expect your personal policy to cover this".
>These additional costs make the deal worse for employees and better for Walmart in ways which are hard for the workers to understand. But I guarantee you that Walmart has studied it to death and knows exactly what advantage it brings them!
Walmart isn't Uber. I suspect they're much more cautious about making sure the relevant risks have the appropriate insurance. I also suspect they'll pay for mileage, but will probably try to get away with some "estimated increase in commute" rather than paying for the full distance to delivery.
The costs I enumerated accrue to the employee even if Walmart has insurance covering drivers while they are "online" and actively making deliveries.
If that even got by you, what chance does the average worker have?
That's pretty patronizing. I wouldn't assume people are stupid just because they work for Walmart.
This could be a great deal for people who need extra money. If I'm driving down a street anyway, it's not much of an imposition to drop off a package and not much wear and tear on the car.
The Big Ugly for anyone working in retail the past 20 years is that stores have done almost nothing to improve workers' productivity. Price scanners were a 1990s innovation and there hasn't been much to follow. So it's very hard for workers to make an economic case that they should be getting paid more. (There's a human-decency case, but that doesn't always prevail.)
In fact, average retail wages were 62% of the national average pay in 2000, and they're 55% now. More numbers are here: https://www.forbes.com/sites/georgeanders/2017/05/23/the-loo.... What was a bad job then has become a worse job now.
Wal-Mart's new initiative isn't entirely beautiful, but it represents the first effort in a long time to say: "Hey, we discovered something about you that's more valuable than we realized. Your commute home is a potential asset to us, and to date we've paid you zero for it. We've now got a mechanism to pay you something for it, as long as you're willing to do Task X for Payment Y."
It's a lot easier for wages to go up -- in any field -- when workers create more value. We can argue about whether Wal-Mart has defined Task X and Payment Y properly, but at least this is a fresh idea in a field that's been devoid of them for a long time.
They also got their lesson with Amazon and other online retailers taking productivity to the max by streamlining warehouse operations and removing physical retail with its inefficiencies and expensive leases out of equation.
Currently US retail market can be broken down into three large groups - already bankrupt (Circuit City, Good Guys, Borders, Forever 21, Payless Shoe Stores), close to bankruptcy (JC Penney, Sears), or scaling down in order to avoid bankruptcy (Target, Macy's, Fresh and Easy).
Improving worker productivity at this point is as useful as optimizing horse-feeding stations a year after Henry Ford has unveiled Model T - you're likely to achieve a local maxima and claim a success, but the global maxima meanwhile changed significantly.
The difference between the two parties is information asymmetry, not intelligence.
Walmart is organized and concentrated and can bring to bear entire departments of lawyers and analysts. It gets to repeat the transaction N times and amortize its costs across all the transactions.
The individual workers do not have such resources and are not unified. Each of them is at a severe disadvantage in the negotiation.
The result is an inefficient labor market.
The return on investment for such a massive deployment of capital isn't huge and Walmart could adopt your strategies at any time, undercutting your value proposition. I'm also 100% certain there is a lot more collusion going on but with CEOs smart enough not to write it down in an email.
That said, a tightening labor market is forcing Walmart and other competitors to slowly raise pay.
However, turnover is actually not as large of a problem as most would like to believe. Cashiers are the positions with the highest turnover rate, many other departments have employees that have been in the same store for many years.
One alternative to this program would be to buy each store a Fedex style van (or a few) and have a few dedicated drivers make deliveries all day. Once you think about that for a few minutes, you start to see all of the costs that they're offloading to employees. Not just insurance, but also vehicle maintenance, gas, etc.
I'm sure Walmart has done a ton of cost/benefit analysis and churned through a lot of data before deciding to offer a program like this, and the employees will almost certainly not get all the details.
The question is whether or not it's actually favorable to employees and whether or not Walmart will inform them of the costs they'll be responsible for. "Here's $10 to deliver this" sounds great until you realize it's $5 in gas, your insurance is going up $50 a month, and your car will wear out a year faster.
"Hey, there's $10 in it for you if you drop off a package on your way home." Let the employee decide if it's worth it or not. So long as there is no coercion, I don't need Walmart to educate the employees on maintenance, the cost of gas, etc. I do think it's fair and reasonable to disclose/inform/explain the insurance situation.
That's like saying criminal defendants shouldn't have lawyers because they aren't "idiots".
The problem is that the negotiation between the corporation and the worker is skewed by information asymmetry. Furthermore, the cost of changing jobs is high, and the same negotiation disparities exist elsewhere.
Collective bargaining would address those concerns, as it allows workers to amortize the cost of analysis across all their transactions. But labor unions are a heavyweight solution.
It would be nice to see other suggestions from people who don't wave off concerns over information asymmetry as paternalism.
People who make ten bucks an hour are really sensitive to these kinds of costs. If Walmart institutes a program that isn't worth it for employees everybody's going to know within a week.
If someone purports to be a professional about something, I expect them to be, particularly about matters as serious as law. I suspect we hold them accountable because those are the people society has entrusted with such matters. Same goes for doctors and medical malpractice.
Maybe it could have been worded differently, but I interpreted it as being that the workers would have a hard time computing the totality of their costs, not that they are of particularly low intelligence. I suspect most people in the US don't know how to work out the financials on this deal.
In fact, I find it pathetic that you call concern for the bargaining strength of low paid workers patronizing. That is a standard right-wing play, an every man for himself narritive, where rich coastal liberals look down on hard working Americans.
If Wal-Mart was being fair, or employees had a better negotiation strategy, or there were fair labour laws, there would be no question as to whether Wal-Mart would be the insurer, and employees would know exactly how many dollars they would earn, without having to gamble with life-altering risks.
I think even if the workers had a stronger negotiating position, it might not yield much, as anything they'd offer collectively would have to be a better deal for WMT than Instacart.
Not that I disagree that Walmart's cutting out hypothetical fleet maintenance costs with what they're doing. I'm sure there are a variety of advantages for them however they're structuring it.