Just like Uber and so many others this only works because for some reason turning paid work into something that is not even self-sustaining suddenly is accepted.
Does nobody have ethical issues with seeing value in devaluing people?
They charge £2.50 per delivery. If they were paying couriers minimum wage I assume they'd be able to make money off it still.
I think that price probably includes the high risk that the self-employed status will be rescinded.
They'll definitely still be able to make money after a change in status.
Edit: Thinking about it, if I order pizza for £20, the company adds £2.50 for delivery. So £8.50 is being spent on delivery (?) .. a normal taxi is about £5 for that trip; an Uber or similar must be cheaper still?
a normal taxi is about £5 for that trip;
an Uber or similar must be cheaper
[1] https://motherboard.vice.com/en_us/article/9a3vye/uber-true-...
The cost of sales and operating expenses seem non-sensical. What are Uber's cost of sale? What are it's operating expenses? How are they different?
If Uber takes a 20% cut, the only cost of sale I can't see is credit card costs. Everything else - including servers - is just an operating expense.
More than likely the lifetime value of a ride sharing customer is huge, so rather than subsidising riders, they are likely front loading acquisition costs, and hoping to make it back in lifetime value. That seems to me a pretty darned solid strategy.
I think they are having issues then with scaling out - I've used Deliveroo a grand total of 3 times, all for restaurants that I know are about a mile from my house, every time Deliveroo have been 45-60 minutes after their estimated time, the food was cold and it would literally have been quicker to walk to the restaurant, eat, and walk home. Anecdata I know but I don't see how they can make it work without hiring a lot more people. And this business can only work financially if they don't.
It's hard to survive on very low wages. That's one reason we have a social safety net. Many argue that it should be the company's responsibility to pay their workers higher wages and not society's responsibility to take care of unskilled members of society. However, this is not a realistic option in all cases because some fraction of these jobs would cease to exist if higher wages are mandated as not all customers will be willing to pay higher prices. In the food delivery case it's a large fraction of customers and the business will probably cease to exist.
The fundamental problem here is that our economy is becoming more advanced and more and different skills are being required to be able to provide value to society and many people don't have the required skills. There are only a few things that can happen in this scenario: society educates low skill residents to prepare them for more valuable jobs, low skill residents work in low value jobs, low skill residents are unemployed. We should make the education option available and highly encouraged. We should provide for necessities like nutrition, safety, shelter that many young people are lacking that prevent them from availing themselves of educational opportunities. However, in the case that people aren't willing or able to complete the education required for jobs requiring a highly educated workforce, I think it's better that people have the option of working in lower value jobs rather than effectively outlawing it. This does not mean these workers should be treated as having low value beyond being paid low wages. There should be worker protections, customers should treat workers with respect, etc.
It would be better for the world if we had more people working in more valuable jobs like science, medicine, technology, etc. and fewer in food delivery. But raising wage regulations to the point that Deliveroo's business model is no longer sustainable probably just means that its workers are unemployed and people have fewer food delivery options.
At risk of getting into a discussion about UBI and tax doctrine, is that a bad thing?
The business doesn't have a right to exist. If it can't operate without paying its staff below-subsistence wages, why should it (or the VCs who provide it funding) expect the state (read: other taxpayers) to subsidise that?
Regarding your second point I'd argue the money would be better diverted to providing the education to raise the overall skill level of the economy rather than enabling people to work menial jobs that will (in the case of Deliveroo, Uber, et al) be automated away anyway.
I think it's better to be employed and increasing your value/skill set in the job market than living off welfare. You can't move up the ladder if you don't develop skills.
Alleging that people "voluntarily chose" to work in gig economy jobs ignores both the significant anti-welfare rhetoric from politicians and (perhaps particularly in the West) cultural push towards employment ("protestant work ethic"), and your own/the GP's points that a number of the people working there are doing so through a shortage of alternatives.
On the other hand, we need to be careful not to throw the baby out with the bathwater; a push (in the UK, the Labour party have been particularly vocal) to ban zero-hours contracts has risks to the ability of people who need the flexibility (students being the obvious example) to find work which suits.
> I think it's better to be employed and increasing your value/skill set in the job market than living off welfare
They're not mutually exclusive; in this case both happen (although it's debatable to what extent Deliveroo et al develop anyone's skill set). Equally, the money spent topping up the wages of the low paid could be redirected to providing education.
> a number of the people working there are doing so through a shortage of alternatives
Right? Maybe I'm missing what you're saying. But possibly people are willing to pay for goods only at a certain price and if the price was bumped up, those services simply wouldn't be bought. And those jobs wouldn't exist. It doesn't necessarily mean better paying jobs will fill in the gap.
> the money spent topping up the wages of the low paid could be redirected to providing education.
Who's money? The consumers money? Or the VC's money? Are you saying through taxation because I thoroughly disagree.
It's also not as straightforward as you are implying - just having an education does not mean there will be jobs there to greet you after you are done. To make that happen you need to make the environment friendly to job creators - those willing to take the risk and start their own company.
By "state subsidy" I mean the state topping up the employee's wages, through for example Working Tax Credits (in the UK) or food stamps and Medicaid (in the US). If it wasn't for those and the push towards working at any cost, my thesis was that these companies would have to pay more (either in terms of actual money or benefits) or have trouble finding people to make their business operate.
> Who's money? The consumers money? Or the VC's money? Are you saying through taxation because I thoroughly disagree.
Taxpayers, because of the first part of this reply. I'm not talking about additional taxation here, I'm talking about money that's currently spent on benefits for the low paid that wouldn't be spent if they weren't low paid.
> > a number of the people working there are doing so through a shortage of alternatives
> Right? Maybe I'm missing what you're saying. But possibly people are willing to pay for goods only at a certain price and if the price was bumped up, those services simply wouldn't be bought. And those jobs wouldn't exist. It doesn't necessarily mean better paying jobs will fill in the gap.
It was a reply to you saying "voluntarily chose to be employed by that service" and the general theme whenever low pay comes up of "well, they can just get other/more jobs" (see also: the McDonald's CEO saying "just get a second job" [1]).
My original comment in this thread did mention UBI, so the alternative isn't necessarily "let's magic high-paying jobs out of thin air" :)
Also, these jobs (and also higher paid ones) are going to go away because of automation. Uber are explicitly aiming for that goal. At some point, the issue of what's going to happen to those employees has to be dealt with by society and politicians.
> It's also not as straightforward as you are implying
I may have made it sound otherwise but I'm well aware that the problem is nothing like straightforward. Waaaaay back at the beginning I warned about unintended consequences.
> To make that happen you need to make the environment friendly to job creators - those willing to take the risk and start their own company.
This doesn't seem relevant - is your implication that if businesses are required to pay wages such that their staff aren't having to also claim state benefits for food, that's somehow not conducive to founding businesses?
I do, however, agree that the conditions have to be right for entrepreneurship, with the reservation that "business friendly" lately seems to be synonymous with "minimal regulation/tax".
1: https://www.salon.com/2013/07/17/mcdonalds_suggested_budget_...
I also have strong objections to the notion of unskilled work here. Any kind of work requires training and skills, and I think you should never take the high road of having better education. It's in general 40 hours of your life time for any job you do. Coming back to that... is it realistic that all people having higher income now pay for food deliveries so that some companies can make money? I doubt it. That questionable both from economic and ethical viewpoints.
Regarding the advance of our economy I can not agree. We are basically recessing to 19th century trades and valuation of work. Just because things are IT based mostly now that does not make up a more advanced economy. Looking at laws, work practices, standards, I dare to say: we are actually watching the whole of mankind failing to take the next step.
We've made it to value of an individuals work, now we're killing that where instead we could also be asking us if our actual views on working and monetary compensation make sense.
From my point of view (and I've been on the crazy low and high paid side), it does not. As does compensating low paid jobs from all tax payers money instead of simply putting companies out of business if they can not sustain themselves.
So while it is cheap from a customer's perspective someone else is footing the bill. Once they run out of investor's money someone has to pay for it.
In India, drivers are already demanding more bonuses. They went on strike: https://yourstory.com/2017/02/bengaluru-drivers-indefinite-s...
Now they are building their own ride hailing app: https://yourstory.com/2017/03/disappointed-ola-uber-drivers-...
If there was any kind of bike based delivery service in my city that allowed me to work casually, I would do it just for an excuse to go out and dodge traffic on a bike a few evenings a week.
Companies are going to innovate but what we are witnessing now is innovation that under the current market economy ) this innovation "devalues" people. Perhaps the solution is better legislation and regulation of business to support this new, growing, and likely inevitable shift towards a gig economy and the people who operate within the sphere.
The "gig economy" scam must be stopped before it's too late. It is not "innovation", but pure exploitation.
As for automation, tax robots and distribute the profits to the people made jobless by them.
(Not sure if that's an international thing - here in NL the delivery people use bikes and have branded backpacks)
There may be some kind of rule around consistent branding, but I have never seen it enforced.