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Comment by aneutron | Hacker News Reader

I really can't make up my mind. On the one hand, it's truly unhealthy for the overall job security and the social construct (which is normal given it's modelled after the US).

But on the other hand, it would have been a fucking travesty doing a lockdown without ordering on Uber eats and Co.

And those platforms were the innovators in the space. Restaurants who could develop similar platforms would have never allocated the money, and others who would never have had the opportunity to offer such services, would have never tapped the overall market (i.e. People with Internet who are hungry and need food for any reason, be it no groceries or just laziness).

Can't there be some sort of middle ground ?

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The American and most of the European labour market cannot be compared like this because of the way regulations in these areas work.

The problem is not that Uber Eats and Deliveroo are making too much money, it's that they're making it over the backs of their employees.

European employment regulations have strong protections of workers, and these companies try to work around those regulations by classifying their employees as gig workers. Delivery drivers used to be regular employees until these companies swept in and used investment money to work the competition out of the market.

It's no wonder the government is stepping in to end this. In the US, this would never happen, because the right to start a job without too much paperwork or get fired on the spot is deeply ingrained in the laws of many US states, at least compared to European labour relations.

The middle ground here is that delivery drivers need to be paid fair minimum wages with the relevant job protections so that restaurants can compete with their own delivery crew without major (foreign) investment. Your local pizza joint can never compete against Uber or Deliveroo without some kind of tax evasion, that's part of the design of the Big Delivery business structure.

These delivery companies make plenty of money, there's no risk of them running into impossible to overcome that their general investment-based mode of operation hadn't already planned for. They may need to raise prices to pay their employees decent wages, but that's only healthy for the free market. In some countries (like mine), delivery companies take a whopping 12-14% of the entire bill as compensation for delivery, which is often listed as free, yet it's economically inviable to go up against these giants now that they control the market.

> These delivery companies make plenty of money

Last I checked, none were yet profitable so unless that has changed, this should probably read "These delivery companies lose plenty of money" and we should stop making arguments based on the false assumption that they are making plenty of money and can shoulder additional costs.

> we should stop making arguments based on the false assumption that they are making plenty of money and can shoulder additional costs.

Then we should start accusing them of "dumping" and prosecute accordingly.

Being able to drown all the small players because you have the connections to raise a Gigabuck of VC cash isn't something we should condone.

dumping is an international trade concept. For a company to be dumping, there needs to be a differential between what a company is selling for in their domestic market versus a foreign market.

Even if that wasn't the test for it, my understanding is that they have unit positive economics (positive EBITDA), but are losing money because they haven't yet amortized overhead like SG&A. This is not atypical with any new venture scaling up until their positive unit economics are sufficient to dilute overhead and turn the company profitable.

"Dumping" is simply using non-local money to sell something at less than normal value.

It is normally applied to international trade because such an action generally requires systemic support from a government to continue for a sufficiently long timescale.

However, it can certainly be applied to local economic products and regions--Rockefeller and Standard Oil being one of the notable examples.

There's a difference between profits and revenue.

You are fighting a losing battle trying to bring math and economic constraints into what is a parade of hand-wringing about poor workers who are being exploited by fat cat owners. Bringing up that these businesses have been losing money in Italy -- and really have no incentive to continue operating there -- goes against the narrative.

After these companies close up shop, taxpayers can pay the unemployed workers who at least aren't being exploited.

There is a reason why Italy historically has a huge gray market, particularly young people working under the table, as it's tough to operate legally in Italy unless you have both a monopoly and pricing power, or are at least politically connected enough to avoid many of your financial obligations, which on paper are quite burdensome.

That creates a vicious circle where the government is drained of funds as income goes unreported, so they make it harder on those legal companies left, which then either need to sell out to a politically protected monopoly or themselves go into the gray market and the cycle gets worse.

The problem with these delivery companies was they they tried to be legal -- only a fool or a monopolist does that in Italy. With the right connections they would have been protected.

You have similar problems in Greece, for similar reasons. Both of these nations have shadow economies that are estimated to be 20% of GDP. To put that into perspective, the Government share of GDP is 50%, so of the share of GDP attributed to the private sector, 40% of that consists of unreported income. Italy ranks 137 out of 189 in terms of tax evasion, the biggest problem being unreported business income. https://www.oecd.org/tax/administration/italy-tax-administra...

This was before Covid. Now, who knows what state their business sector is in. It's a big mess, and no one has been unable to unravel it. Staying away from that mess, unless you know how to play the game, is a good idea.

Isn't that the same story like with Uber & Co? Anybody remembering the pictures of giant piles of bicycles at the end of 2017 in China, when many of the bikesharers went bust for some reason?

I'm failing to see how these platforms were innovators. There have been countless multi-restaurant delivery services going back to the initial Internet startup boom in the late 90s. With a few exceptions in large metropolitan areas they have all failed.

Even with a much higher level of investment, willingness to play dirtier than previous attempts and a huge increase in demand because of the pandemic there doesn't seem to be money to be made here.

> With a few exceptions in large metropolitan areas they have all failed.

Eh? Just Eat/Takeaway.com has operations in 23 countries and made more than €400 million in revenue pre-pandemic (according to Wikipedia).

Revenue isn't profit.

> But on the other hand, it would have been a fucking travesty doing a lockdown without ordering on Uber eats and Co.

Why? I know a lot of people who didn't order food online. I get it if you say that restaurants needed it, but do most people need to order food online during a lockdown?

> And those platforms were the innovators in the space.

The main innovation of Uber Eats and Deliveroo was using fake self-employment to reduce costs and scale faster.

> Can't there be some sort of middle ground ?

Yes. There are already companies (Just Eat comes to mind) that do hire workers and do not rely on fake self-employment, and they're able to do delivery just fine. I also know a lot of restaurants that hire their own delivery employees.

> Just Eat comes to mind

Just Eat is on the list of companies impacted by this in the article.

I don't know what's the model in Italy, but I know for sure that in Spain they hire their workers. In fact, they've been against Deliveroo and Glovo when the debate surfaced again, complaining about the unfair advantage those two have by not following the law.

The middle ground is that consumers have to be willing to pay more for their deliveries so that drivers can receive a reasonable salary. Delivery companies know consumers won't pay for it, so they are attempting to violate labour law by calling these drivers self-employed.

When I get a 50% discount I sometimes am tempted to order. But with additional surcharges now the discount is usually gone. Then I realise I'm a massive slob and there's perfectly good food in the fridge.

> The middle ground is that consumers have to be willing to pay more for their deliveries

Consumers do not, in fact, have to be willing to pay more. Not at all.

The software needs to be run by the restaurants so they own the entire experience.

I think restaurants would love to pay $xxxx upfront and a small monthly or annual fee for updates.

But software developers want a slice of the revenue.

It’s greed in a low margin industry.

It’s a perfect Open Source project.

Restaurants don't want to care about deploying their own delivery services. If they can pay a fee and outsource that they will.

Open Source would only work if there were vendors to sell a packaged solution that restaurants can just plug into their systems (menu/ordering), no small restaurant will want the headache of maintaining their own software infrastructure...

So you say your need to have cheap food on your table trumps other peoples right to be treated like human beings and be hired and paid for their work fairly and protected as workers?

European countries have already decided that we want workers protected with minimum wages and other rights and that there are limits to free market.

It is understood that large number of people just need to be protected because they can't do it for themselves. If you are willing to honestly work 40 hours a week you should be compensated enough to pay at least for very basic existence.

> pay at least for very basic existence.

Can we put these in specific and measurable criteria? What you've written is a great sound bite and easy to get behind as written, but it's meaningless unless we all agree on what constitutes a "very basic existence". I doubt you'd find consensus on what qualifies as a "very basic existence".

> I doubt you'd find consensus on what qualifies as a "very basic existence".

there doesn't need to be concensus from unrelated parties to the transaction.

If the deliverers accept the conditions (assuming they understand and isn't lied to about it), then that's the level.

deliverers aren't a homogenous group. What's the threshold for acceptance by members of this group to determine the level has been met? 51%? 70%? 90%? Something else.

That said, I think you do need consensus beyond those that are party to a transaction because you're arguing that the rest of society needs to be involved via the legislative process (politicians, voters, etc.). If enforcement society, society needs to be involved in the consensus. If society isn't involved in enforcement via any laws, yeah, only those involved need to be involved.

> Can we put these in specific and measurable criteria?

Yes. A single young person on a minimum wage needs to be able to at least rent their own flat, put food on a plate and be able to party.

I think we can consider case of Sweden. Norway isn't good case because they struck gold with oil and gas which puts them in privileged situation. Sweden has no special resources that would put them in privileged position.

In Sweden where I lived on a 6 months contract, minimum wage is around 180SEK or 21USD. Sweden has costs of living very comparable to those of US.

What this means, is that even if you are young person without special needs, without support from parents, working basic job like support phone you still can rather comfortably pay for your necessities.

Just to be clear: there is no mandated minimum salary by Swedish labour laws, so the government does not set a minimum wage.

The minimum salaries are set by the unions in negotiation with the government and employers' organisations.

In summary: minimum wage only exist in Sweden in connection to national unions, not directly to the government.

> a minimum wage needs to be able to at least rent their own flat

Why exclude the possibility of having roommates? I and I'm sure many others here had at one point or another a minimum wage and roommates and perfectly acceptable livable existence. The idea that you need to have your own place all to yourself on a livable wage is laughable and so out of touch of how much of most people in the world have lived at one point in their life. Not even a majority of Americans in any age cohort live alone. 60 years ago it wasn't even 1 in 5.

https://ourworldindata.org/grapher/percentage-of-americans-l...

> In 63 of the 113 nations (56 percent), fewer than 5 percent of the young adults, ages 25-29, live alone.

https://www.psychologytoday.com/us/blog/living-single/202002...

Living alone is a luxury. Any attempts to paint living alone as a necessity for a livable condition when most of the world experiences a livable condition without it is so out of touch with reality that it's impossible to take someone making this argument seriously.

> it would have been a fucking travesty doing a lockdown without ordering on Uber eats and Co.

Sure, these services bring joy to people and create low paid jobs.

But, I think the more essential service is the general grocery delivery and supply chain.

It seems so inefficient to have someone make a toasted sandwich, and then drive it half way across a city burning fossil fuels because customers do not want to cook their own meals.

Ahem. Hereabout they use e-rollers, at least sometimes. All so green and clean and shiny, spraying rainbow colored sparkles :)

Why a travesty? Is your part of the world locked out of supermarkets?

Better to do delivery of groceries and food than to go to a store and swap air with others.

Or order pick-up?

I eat plenty of takeout (much more than average) but never use apps, way too expensive.

... and let the poor courier/driver be the one to swap air with hundreds of people.

The middle ground is simply that it costs more.

Uber Eats was amazing in Ecuador. I could order two Bolòn for $10 delivered.

I'm curious about the actual percentage of US adults who have ever used a delivery service (e.g. Uber Eats). I imagine it's far lower than you think.

Uhm. Why would food delivery be allowed during a lockdown? What's the point of it, then? Especially when considering the production of the food which needs 'unlocked' preparators.

Seen like that it is no difference to rush fast and masked through some supermarket, or emergency food collecting point by the red cross, military, FEMA or something.

edit: I mean why should food delivery services being exempt from being locked down? Makes no sense to me when it's just for convenience and not part of emergency distribution, or when other, though limited options exist.

I went through an entire year of lockdown across two major cities without using a delivery service once. Just go out and pick up the food yourself, either on foot or via bike or car.

Hot take:cooking your own food

Also a good solution, although I tried to eat takeout once a week to help keep local restaurants from closing.

Disruption. I like it.

Easy to say if you're able-bodied.

Are you personally disabled in such a way as to be unable to leave the house to pick up food, or is this an example of woke-washing where you defend exploitative labor practices because they benefit a marginalized group?

Personally disabled, at the mercy of a failing taxi system to get around. I wasn't even going to reply to this (woke-washing, lol).

Also I know what you mean about the job security and so on, but this industry was previously provided by the restaurant/businesses which would offer a base salary and then tips were there's lets say. But deliveroo uber and co, offered the riders a means to earn more money with less job-security, the restaraunts to reduce the fees of delivery..

It was a pretty balanced trade-off.. To which both concerned parties did agree.. Goverment wasn't even needed here. I feel worse for the delivery people in all this because they wont have that extra money, instead deliveroo and co will just reduce their earnings to compensate.

It's stupid.

No.. This is not a good idea.

Sure there is merit to them being "coordinated and continuous workers", I can see the argument for that regardless of the gig economy. But having to back-pay the taxes for said workers is close to extortion.

My Middle ground would be a mediator instead of an ultimatum.

> Should the platforms hire all 60,000 couriers, there's a high price to pay to catch up on previous, missed social security payments, said European labor law specialist Luca de Vecchi. Social security contributions in Italy can amount to up to 33 percent of an employee's salary and must be paid by the employer.

This is just crazy.. How can the government expect a company to backpay what the government allowed in the past ?

This is wrong.

If you wrongly classify an employee as a contractor the IRS will go after you for back payroll taxes. It's not extortion, its collecting taxes you illegally avoided.

Think about what you just said.. If it was okay to be classed as a contractor in FY2018, then the legislative said no you need to backpay. FY2018 is no longer valid.. Even though, they approved it, IRS accepted. See my point ?

You cant retrospectively change the status of their work status.

You didn't wrongly state your status at the time..

The IRS doesn’t ‘approve’ anything by accepting your tax return.

They accept your statement as a fair representation.

They can always go back and change things if you made a misrepresentation.

Typically in the US both individuals and businesses are expected to keep records for 7 years, in case the IRS wants to check things.

1) You're wrong, whoever you return your taxes through if not direct to the IRS (which is rare) needs approval of schema and structure. Their workflow engine is not deisigned to retroactively change you from a contractor to an employee. Also Who cares about the IRS, this is Italy. Get over yourself.

2) > They accept your statement as a fair representation.

Yup.. At the time, see above, FY2018 you were supposed to register as a self employed, now you need to register as employed, cool.. But Wait you need to pay last years tax as an employed too. Nonsense. Whoever you filed with owes you in this case, but I don't know why they would pay based on a retro change.

3) > They can always go back and change things if you made a misrepresentation.

There was no misrepresentation at the time. That's the point.

> Typically in the US both individuals and businesses are expected to keep records for 7 years, in case the IRS wants to check things.

It's called audits and its out of the scope or concern for this discussion.

> Also Who cares about the IRS, this is Italy. Get over yourself.

You were talking about the IRS in the comment I responded to.

> Get over yourself

This is against HN guidelines. Please be civil.

2) > They accept your statement as a fair representation. > Yup.. At the time, see above, FY2018 you were supposed to register as a self employed, now you need to register as employed, cool.. But Wait you need to pay last years tax as an employed too. Nonsense. Whoever you filed with owes you in this case, but I don't know why they would pay based on a retro change.

No. You sign your own return even if you have a tax preparer.

Misfilings are your responsibility.

If it’s just a good faith error, usually there won’t be a fine, but if you owe more taxes you will have to pay them.

Re-fillings to correct errors are a normal procedure.

3) > They can always go back and change things if you made a misrepresentation. There was no misrepresentation at the time. That's the point.

The article says there was.

> Typically in the US both individuals and businesses are expected to keep records for 7 years, in case the IRS wants to check things. It's called audits and its out of the scope or concern for this discussion.

What an odd thing to say. An audit is the process of checking and correcting errors in tax filings when problems are suspected.

A tax authority accepts your tax return. It does not approve it. That only happens if they audit your tax return for correctness...which is what happened here. The Italian tax authorities audited the returns and determined that the delivery services had made mistakes on them in the way they mischaracterized employees as contractors.

2) False. The delivery companies told drivers to register as self-employed, which was incorrect legal advice at the time it was given, under the laws governing contractor/employee classification (for tax purposes) of the U.S. and the E.U.

3) Absolutely false. The delivery companies misrepresented the tax classification of their employees and failed to pay the appropriate taxes on them. Full stop.

4) You brought this up. You keep claiming that filing a tax return automatically means its correct, which it does not. It merely means that you filed a tax return. The tax authority will audit returns randomly selected (or in cases like these, deliberately selected) for correctness and assess back taxes, penalties if appropriate.

The government never allowed it. The company is responsible for correctly paying social security of their employees and correctly classifying their employment status. Wrongfully classifying someone as self-employed is illegal and the company will have to pay the social security contributions they missed.

This has nothing to do with taxation.

It's crazy how a company hire 60'000 employees and not know the labor laws of the country they operate in. Every private person that hires a house cleaner has to know and follow these laws.

> The government never allowed it.

Pull the other leg. It works once it works for them until now ? ? You're either not paying attention to the article, or you're set in your ways, which id love to hear.

> The company is responsible for correctly paying social security of their employees

Fine.. But that was not the agreement drivers had when they signed up. They signed up for cash on the job, gig economy. I'm not saying its good, I do think it should be unionized, but you guys are defending the same companies that are going to give the costs onto the riders.

Morons. Not seeing the trees for the forest. YC

> Pull the other leg. It works once it works for them until now ? ? You're either not paying attention to the article, or you're set in your ways, which id love to hear.

That's not an excuse. If someone is caught for murder and during the investigation it is discovered that they murdered 60 people over the last 5 years. Should they only be prosecuted for the most recent murder because it worked for them until they got caught?

> Fine.. But that was not the agreement drivers had when they signed up. They signed up for cash on the job, gig economy.

Exactly but the agreement the drivers signed falsely classified them as contractors. This is called false self-employment [1]. So the courts decided gig workers are classified as employees according to current laws which means the employer was acting illegally. These laws exist because food delivery apps aren't the first to try to get out of paying social security and other obligations from having employees by declaring they are contractors.

[1]: https://en.wikipedia.org/wiki/False_self-employment

> It's crazy how a company hire 60'000 employees and not know the labor laws of the country they operate in.

They knew the laws.. Italy is changing them retrospectively.

Both are bad, but changing the past ticks my : "That's bad form" box

That's BS. 'They did, and asked for forgiveness later' which they didn't get. Bad luck. Shit happens. Move on.

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