NYC food delivery gig workers score a big minimum wage victory
theverge.com
theverge.com
1) Get 10 friends
2) All friends log on to deliver food from 2am to 5am. Sleep and get paid.
3) When someone actually gets an order, you, and only you, do the labor. You can adjust the logic to cover edge cases where you don't actually have enough labor to fulfill the demand. We could call it surge pricing.
Uber for Uber Eats.
AFAIK, unlike Uber, there's no user auth to make this hard to do for food delivery.
Maybe Door dash et al shouldn't 'overhire'.
They pay for it with their health, though.
What do you do if 100 drivers say they're waiting for orders, and a paltry number of orders come in that, unbenownst to Uber, get delegated to just 5 of those 100 while all 100 collect pay checks?
It's just that under a business model where having more people on call not cost them anything, they were happy to expand the on call roster to an unlimited size.
OK, sure, and the next logical step is telling the delivery people when they're on shift, where they have to wait when they're not making deliveries, and prohibiting them from multi-apping, etc.
I think there's a fine line between "our labor is underpaid, we should be paid more" and "let's destroy the entire business model" and I'm certainly excited to see how badly this will go. If I were to be cynical, I would say that there's a certain slice of the labor rights movement for whom any combination of the above would be a good outcome.
You've just realized why most employed people aren't paid by the keystroke, and why 'on-call' contractors that don't have reliable, consistent 9-5 work charge an incredible premium for their services.
I don't understand exactly which workers are supposed to be angry about sitting somewhere and getting paid that wouldn't be angry about delivering something and getting paid. Or which ones are desperate to work on another app while they are currently being paid by the app they're on.
> "let's destroy the entire business model"
What interest does the state have in preserving this shitty business model?
I have no opinion on that - I'm simply assuming that the workers that are part of "this shitty business model" are not looking for it to be destroyed and feeling that there may not be an alignment of interests. What can be a win for "the worker" in the large abstract can be a loss for "these workers" in the specific.
And maybe we're just saying no to the gig model. Sure, I'm for it. But this indirect approach is going to be an awkward way to get there imo.
So the scheme above doesn't work too well for those folks but the economics for door dash remain the same. It also kind of implies you can create surge pricing for workers by having an overabundance of supply, which is a nightmare scenario for them.
The problem is that you cannot easily define people on call. If $33/hr is the average comp for trip time when just one person is working at $18 overall, then they're saying an average worker works 55% of the time. If you add another person who just idles on call for the whole hour, you must now pay the one worker guy $66/hr for his working time.
The game theory here is not going to work.
simple checks like "did this person do >X number of deliveries in Y amount of time?" should let the company know who to "send home" the exact same as food service and retail currently works. the companies are not forced to allow anyone onto the app, just as businesses are not forced to allow any employee who shows up unscheduled to sit around and collect an hourly wage.
Why would they let everybody log in if they don't get very much delivery business between 2am and 5am? There isn't a law yet that says that companies have to hire everyone who walks in the door for any shift.
I just do not understand why the tip amount is proportionate to the value of food being delivered.
The fee should be set based on factors that impact LOE and time that impact delivery. That's it. Just like in the rest of the civilized countries.
Want $9 happy meal delivered to your house? $5 bucks. Want $30 sushi next door to the McD? $5 bucks.
I don't know why we make things so complicated.
Can't you use a custom amount? The way you phrased that makes it sound like it isn't.
You can only slice this pie so many times.
I've a feeling the delivery fee will increase, customers will continue to tip otherwise they won't receive their food, and overall the price of delivery will increase and the number of customers willing to foot the cost will lower.
I wonder whether Fresh Direct / grocery delivery prices will go up as well.
If I had to guess I’d say it’s people doing this as a side gig and that are good at gaming the system that will come out ahead. Those trying to do it full time for all of their income will come out behind.
An example would be 5 Spice in Brooklyn: their menu (1) vs. the Doordash menu (2) have significant price differences.
(1) https://5ivespicebk.com/home-5ivespicebk#865c19de-ce54-43a2-...
(2) https://www.doordash.com/store/5ive-spice-brooklyn-132997/
Of course it will. Supply+Demand, it's the law.
Browsing reddit.com/r/ubereatsdrivers and /r/ubereats has led me to believe that the majority of these workers spend their time waiting between orders and that they will not receive an order waiting in a stationary location for too long (i.e. they could be ready+willing to accept an order for hours and would be penalized if they did not actively drive or if camped out in a parking lot/home).
If it is the latter case, then these workers can still receive a sub federal minimum wage if there aren't many orders placed or if the algorithm decides to prioritize one worker over another.
With the new able bodied working requirements for SNAP and other benefits, I wonder if it is possible that gig workers can be engaged in work activity for 80+ hours per month while not technically meeting that requirement. That would mean they would make less than minimum wage and be cut off from healthcare and food assistance.
1. Delivery fees will go up.
2. Delivery companies will put strict limits on how many drivers can be online at once, crippling the narrative in their marketing that drivers can choose their own hours.
The latter is especially likely if companies are required to pay drivers when they're just sitting around and waiting for an order.
They already do this, if there are too many people online in an area the app will tell you to move to a different region before it will let you go online.
A driver recently shared with me that he made $5 on a $23 ride I booked recently. Uber's margins are absolutely mad.
Pre-Uber/Lyft, either the driver rented the car from a middleman who rented the medallion from a rich owner, or said owner was selling and financing (most banks won't touch these medallions!) a medallion at a ridiculous interest rate to a driver that planned to use it as his retirement savings (an extremely volatile asset and not very liquid). Sure back then the dispatch only took a 15-20% cut, but medallion payments took at least a 50% cut on every ride. That money didn't get re-invested or re-distributed as incentives to drivers, no. It went straight to the pockets of the local rent-seeker.
The more I spoke to cab drivers the more it seemed their industry was a pyramid scheme aimed at helping established rent-seeker take advantage of often poor new immigrants. Uber/Lyft brought a breeze of fresh air: Someone could simply buy a car, calculate the depreciation and it's value on the market (since unlike medallions cars are relatively liquid assets!) do rideshare and calculate their profits or loss. They can get out of the game at anytime, and they know exactly how much they are going to get for the car they have should they sell it.
And I'm not even touching the usual pain points and often discriminatory practices of medallion drivers (refusing card payments, refusing rides to non-white passengers and to non-white neighborhoods...).
Food delivery is way more lucrative than taxi business
Unless the driver went over a toll bridge, that payout rate should be downright criminal.
If labor conditions are not as good as they're advertised, then isn't the expected outcome here that more people will try to find delivery jobs, resulting in more workers chasing fewer deliveries (assuming prices go up)?
"no business which depends for existence on paying less than living wages to its workers has any right to continue in this country"
FDR's statement was also clearly implied a constant wealth level of the country overall. But you could imagine lots of runaway economic situations were pulling people out of the workforce causes the "living wage" to rise which would require pulling people out of the workforce until you just do not have enough economic productivity to support your population (which is kind of a version of what Venezuela went through).
A student living at home is explicitly not supporting themselves. Their parents shouldn't be subsidizing your food deliveries.
How many workers would work for less than a living wage and are prevented from doing so by minimum wage laws and instead denied jobs?
There's no way to paint this as anything other than blatant extortion - just like prison labor. But at the same time it's a bit weird to me that we kind of set societal speed limits "unless you are providing at least $15/hr in value to society you are a ward of the state".
But I think an important caveat to Sowell's argument is that is he is kind of describing the intent of minimum wage. It's a tool aimed at labor monopsony and one of the purposes of minimum wage is to intentionally thin out the supply of low wage labor from the bottom. It was never about benefiting people making $0. It was about removing competition amongst the people making $15.
The argument could be made around required PPE as well. There are people willing to work without it, why aren't we jumping on that opportunity? Could probably employe another person or three if we didn't pay for PPE for the worksite.
The reality is that minimum wage jobs will sink to whatever level they can get away with, forcing everyone who works at that minimum wage level to put up with the new decreased wage.
I hear a lot of complaints about food delivery prices. And I can't help but fight back a little because:
1. Food costs more. If you go to fast food or local restaurants you will see prices have risen. The cause of this is debated but it doesn't change the fact that food costs more.
2. Delivery workers work pretty hard to do what they do. Due to a lack of good American public transportation (especially outside of NYC) most delivery workers have to drive their own cars which is a cost that gets more expensive with time as cars have a limited amount of miles and tend to break down somewhat randomly with age.
3. Maybe most importantly, you don't need food delivered. Unless you're disabled, it's inherently an out-of-touch argument because there's nothing stopping you from making your own food or going to pick up food. It's a luxury, so I believe the prices aren't really that crazy if it means the workers can make livable wages. And if you're disabled, we should have better systems in place for you than saying "use doordash".
- edited to account for disabled people.
Food delivery always was a luxury especially when it's just for one or two people. Unfortunately, you can't generate exponential growth on wealthy families ordering Friday evening takeout.
People with disabilities would beg to differ. There's a reason Meals on Wheels exists.
In the United States, there are in-home healthcare workers and adjacent support workers that can perform tasks such as grocery shopping and meal preparation, no?
What would the workers do without those jobs?
Sadly, there are people that will never criticize a company for having shitty working conditions. Instead, they'll just say "If they don't like it, get a job somewhere else!", and it doesn't matter what extreme you take it to. They will never question the shitty conditions.
slavery, you say?
All they think of is the fact that eliminating minimum wage would create jobs, which is technically true, but imagine being one of those poor workers that cleans houses for $1/hr because they can't find anything else.
Paying someone minimum wage is sending the signal of "I would pay you less if I was allowed to". No minimum wage would create a race to the bottom on wages as employers are able to find more and more desperate people who just want to be able to eat.
It’s also better to have jobs that pay living wages than jobs that don’t.
That said, it sucks the government had to get involved at all.
> A driver recently shared with me that he made $5 on a $23 ride I booked recently.
If I order Doordash, the food is already way more expensive than in the restaurant. The driver gets a delivery fee. The driver gets a tip. Somehow, a $10 meal turns into $25. And there's still not enough money to pay the driver to bring me food from 5 minutes away? (I'm blind and don't have a car.) Of course there is. It's just all going to corporate.
You thought Hollywood accounting was bad, wait until you learn about delivery business accounting.
Look at Purism attempting to make a phone in the US: It costs 2000$...How many people would be willing to pay 2000$ for an iPhone? Lets say Apple can be more efficient than a startup like Purism, maybe they can get to 1500$?
The recent labor shortages in Florida were caused by undocumented migrants being scared by Desantis's stupid immigrant law.
Lets not forget the COVID supply shortages which in hindsight were not a complete collapse thanks to a lot of sacrifice by people who we never see and never think about.
China is going offline either now with greater tensions or later due to their demographic bomb and so far Apple and others are making progress transitioning to Vietnam, thailand etc to stave off the eventual truth that the west is structurally bankrupt. Maybe robots will save us? Thats what all the elites are banking on.
It seems like these delivery platforms have positioned themselves in such a way that they are extracting a pound of flesh from restaurants, customers, and underpaying their workers.
It was always performed by under-the-table workers and somehow VCs thought there's money to be made there.
Most people have a threshold for costs. And the head count in tech and marketing doesn't help at all with keeping it under that cost.
With the possible exception of the people that ride the new gray Citibike e-bikes, delivery riders are almost unquestionably the worst behaved "cyclists" in NYC. I put "cyclists" in quotes because half of them are just riding mopeds now.
- They ride in whatever direction is most optimal, one-way streets be damned. This is called "salmoning" and it is universally loathed.
- They don't even slow down for red lights half of the time. Look, I know, it's NYC, almost everyone Idaho stops or Idaho slow-rolls, there's even a proposed law to officially legalize it now, but they really take it to another level.
- They have no awareness when starting, they will just fly into a bike lane without checking over their shoulder. Also includes right/lefts on red (also not legal, but everyone does it, and it's pretty much fine if you at least check), they do not check for something riding down the bike lane with the light.
- Less relevant since it's summer currently, but usage of lights at night by these riders is maybe 50% at best. They also wear black a lot... so black bike, no lights, riding the wrong way in a bike lane. Fun!
- The mopeds. Mopeds are unambiguously banned on bike lanes and especially on the bridge bike lanes, but it's impossible to ride over one of the East River bridges these days without being passed aggressively by a gas moped, not even an electric one (which are still banned!).
I don't know if this will make them behave better. I don't see why it would, if they can still maximize profit by putting everyone else in danger.
I was in China recently and it struck me how wide the bike lanes were and mopeds were allowed but everyone generally followed traffic signals.
As someone living next to a Salmon spawning creek, this put a huge grin on my face, I love that term.