Seattle ordinance intended to help app delivery workers is 'hurting' them
king5.com
king5.com
But I guess policy needs to be studied--really studied--examined from all fronts, tested with the full weight of reality.
If you ban X, what replaces it? Y? Is Y really better? If you add a charge of Z to support certain industries, how does that shift the economics? You can't just assume that a $5 charge means $5 more in the pocket of everyone in that industry.
Isn't every referendum system plagued with that problem. Want a second opinion? Ask any Oregonian!
The alternative is to have elected officials write and pass laws. But they're elected because of popularity, not legal prowess. "I could drink a beer with them" is almost never "they are clearly best qualified to write the rules by which we all live."
As Churchill never said (but not originally), "the worst form of government except for all those others that have been tried."
Which is what all of the gig economy services are - you have always been able to get driven around - they were called limos and chauffeurs. Likewise the wealthy have been having servants fetch their dinner for decades, if not centuries.
With a container ship full of VC money our industry was able to sustain an illusion for some years that servants can be had for cheap. Turns out the basic economics of having servant(s) hasn't been disrupted by technology.
... or taxis, but that's not quite so consistent with the class-war narrative.
Try standing at an intersection in SF for 5 min with kids without them getting scared. I had to do it unfortunately in SOMA (long story why) and a sketchy guy mostly on drugs scared the hell out of my kids. That is not normal and is what I personally consider "falling apart" - kids should be able to roam around freely in a healthy city.
If you took a straw poll, I think you'd find a lot of drivers in favor of higher pay and not so many in favor of higher pay but zero hours.
> I'm not sure the point is to actually help people for whom something is better than nothing, it's to demonstrate resentment and frustration and a worldview that sees all wage labor as exploitative.
The "gig" companies are the ones taking the bulk of the money, and then disbursing pittances and stealing tips. They can definitely pay better.
So, how many hours do I need to work before this logic kicks in? Presumably not just one per week, right? Does my employer get the right to pay me less because my needs are met in part by an inheritance or because I share the rent with someone else who works? At what level of granularity does the basic cost of living get decided? i.e. if I flip burgers at the McDonald's at the corner of Chambers and Greenwich (in the middle of TriBeCa) does that mean I should be paid enough to live there too?
The basic ideal of dignity of work is fine, you just can't get there from here.
Alternatively it's simply time for people to learn to cook simple foods again, a pasta with alfredo sauce, fried potatoes with eggs and a salad, or a spinach quiche (with a 1€ supermarket crust) are all quicker to make myself than I get through any app's ordering process (ignoring here the waiting time for both processes to finish).
And Im sure this ordinance is "hurting gig workers". Well, so is working the fucking gig jobs, but that hurt comes 'down the road' with much more wear and tear on the vehicle, higher incidence of wrecks, no workers compensation, pay double tax for "self employed".
But those billionaire gig companies are doing the rake JUST FINE.
Why do you assume that those workers are so stupid, as to not be able to calculate whether the job in question is worth their while? Perhaps they, with better insight into their own financials, have decided that you may be incorrect?
Other times, its cause the costs are well hidden UNTIL its time to pay them. And the "gig" seems to pay quite well, until it doesn't. The company side has actuaries to assess risk and understand accurate costs, all the way down to the make/model/year/mileage of your car. You, well, dont. Its all about information asymmetry.
Many times, its simple desperation. When there isn't anything else, you do what you can, even though you're being taken advantage of.
Some might call this just getting by, some might say this is what climbing the ladder looks like, and some might call this a poverty trap -- the longer you just scrape by, the harder it is to escape.
The debate is about do you call these opportunities or exploitations. It's realistically both, and so you gotta ask yourself how much exploitation are you willing to tolerate before the pizza starts to taste a bit icky? And when it does, how much are you willing to pay to make that pizza conflict-free?
Are you kidding? All the investors in this space are taking an absolute bath. You can look this up if you want, but I don't think GrubHub, PostMates, DoorDash or Uber Eats have ever made any money.
At this point in time, the only people getting any value out of these services are the drivers, the consumers and the employees (who are, by and large, doing middle class sales, marketing and software jobs).
They never made any money, the same way Titanic, Avengers, Lord of the Rings never made a cent. Those poor studio execs.....
Its a mixture of Hollywood accounting, and an intentional plan to dump all profits back into growing the business all the while undercharging to gain monopoly status. Then, of course once the "gig" is up, they're the only players and can charge high rates and pay pennies cause they're the only mega-delivery place around.
And it doesnt hurt when all the locals fired their drivers and rely on said gig companies.
No, they never made any money in the old-fashioned sense that their revenues were less than their costs. This is not hard to look up. GrubHub was doing so well last year that it canned 15% of its workforce.
Full disclosure: I worked at Domino's many decades ago and I ordered pizza in Seattle for over 20 years.
That being said— nothing seems to have changed with regard to pizza places offering direct delivery. The changes on “the apps” are very noticeable but direct ordering seems normal.
I should note this is based on almost completing the order flow, I’m not so dedicated to data gathering that I ordered a bunch of food to test this.
It is possible that this was feasible for the owners only because it hadn't occurred to pizza shops en masse that it was possible to get the drivers to provide their own cars. But this was before I ever saw thermal sleeves for pizza boxes. The food was kept warm by a sheet metal contraption in the back seat, with sterno as the heat source, something it would have been awkward to be putting into and pulling out of civilian cars.
It worked well as a part-time job for me at the time because I had no rent to pay and very few other regular expenses.
I don't think the same would be true today.
I will absolutely call a place and order on the phone if it avoids grubhub extracting an extra $10 in fees from both sides of the transaction... and give the delivery driver the difference in tips. But yeah, less frequently than I did when VCs were subsidizing the cost.
Either bundle in the driver's payment into the fees entirely, or don't at all. Let's drop this game of having to guess how much to tip to make up for what the company is not paying the drivers.
Take the humans out of the delivery business and you get more flexibility on pricing. Self driving cars could do it if you are willing to meet the outside. Drones also, although I think the power costs will never work for air delivery, so it will need to be grounded somehow.
Usage of "ends meet" dates back to at least the 17th century with uncertain origin, but possibly to do with ropes or accounting. "ends meat" seems to be a more modern derivation, sometimes given as a folk etymology for the former.
https://english.stackexchange.com/questions/66831/origin-of-...
https://en.m.wiktionary.org/wiki/make_ends_meet
https://www.oed.com/search/advanced/Quotations?textTermText0...
Reducing the number of drivers may increase the time it takes to deliver food, making it colder.
I don't fundamentally think "get delivery from anywhere" can exist at this price point without somebody getting screwed.
I can't speak to how any of these companies think about this ordinance, but I do think they have an incentive to ensure that this ordinance fails, and a great deal of influence on its success.
I think you missed the reasoning though - they don't want customers to feel obliged to tip 20% on top of the increased prices, which they'll do less often or stop doing entirely. It's more like "you don't need to tip because a living wage is baked into the price now".
That sounds like a really good change! Tipping is such an archaic mess.
It took a hundred years, but all those people in America who griped about tipping when it spread here from Europe turned out to be right.
The elephant in the room is that the reason we still have tipping for servers in restaurants and bar staff is that it's actually overwhelmingly their preference. There's a lot of complaining about bad pay and the tipped-wage discount on the minimum wage etc. but not actually a lot of support for doing away with tipping.
Part of that is the opportunities that tips give for tax evasion. The IRS reckons that something like 10% of all individual income tax underreporting is due to incorrect reporting of tips: employees are supposed to tell their employers how much they got tipped, and there's really no effective enforcement.
The employer doesn't really have any incentive, as it's the employee's responsibility to report their tips.
There are lots of places that will tip out servers in cash for card receipts and rely on reporting - of course, yes, the servers have to report it but all the incentives to do the right thing are missing on both sides.
I think it is even more obvious for gig workers whose income are reported via 1099s and their tips are collected by a third party. I'm pretty sure Uber must report tips as general income. Now, it is possible for the rider to give a tip to their Uber driver directly as cash, and that wouldn't be necessarily reported (or to tip their delivery person directly rather than via app).
It's looking like a gig economy that provides guaranteed solid minimum wages is a lot smaller than what we've had so far. It might be a good thing, though it does feel weird to forcibly be telling people "no, you're not allowed to work like that" when the work is so low commitment.
1. With RTO, folks are more likely to eat out during the week (especially for places in SLU), so weekend demand is probably lower
2. With commutes, folks are more likely to pick up on their way home, so demand for delivery is probably lower
3. With the poor level of service, folks are more likely to pick up in order to ensure that their food is actually edible
King5's post itself notes another potential confounding variable: more drivers.
The workers are the value. If the "app developers" cannot/will not pay them a competitive wage, then the "business" dies. The ordinance did not backfire on the workers, it backfired on the middleman-based startups. Ultimately their "business" will fail. What did it cost to write an app and to take money from investors. What was risked. Maybe not much. That would explain the proliferation of these bogus middleman "businesses".
What's worse is that at some point a lot of the restaurants that have made the current iteration of those cities what they are will not be able to weather the economic storm their own cities are putting upon them. Their voters will vote to increase wages arbitrarily, add on fees, regulations, taxes, etc. And then when their pad thai or poke bowl costs $27 for pickup or $38 delivered, they'll just stop patronizing that restaurant - whether out of financial necessity or some misplaced feeling that they are now getting ripped off from the price hike - until it goes out of business. I can't count the times I've heard "<insert restaurant/brewery/coffee shop> is just not worth it anymore." The bigger chains will be able to take the losses until they can absorb the entire market.
There will always be 3 Starbucks and a McDonalds in Times Square.
It's any-party-in-power's job to make sure that doesn't happen, by any means necessary.
I don't mind fees going up some, and in contrast GrubHub isn't playing games - the fees are just higher now. That's fine if it means the drivers are getting paid more. I noticed that they adjusted the default tip percentages to be lower, so it seems like the actual cost of an order by default probably isn't higher. If the driver earns the same amount in the end (or more) that just means I'm spending less money on the "tip".
EDIT: Thinking about it more, the "their wages have been slashed" phrasing in this article is also deeply dishonest. They weren't wage workers before, and still aren't! They're freelancers who rely on a steady flow of gigs and tips to earn enough every hour. If the flow has slowed then of course they're going to earn less. We can argue that the ordinance caused the flow to slow down but other factors could be at work too, like the apps adjusting recommended tip percentages.
How is that dishonest? DoorDash's costs have risen because of the new law. The first three seconds of the news this discussion is about explicitly mentions the "$5 fee".
>I don't mind fees going up some, and in contrast GrubHub isn't playing games - the fees are just higher now
You no doubt supported the law, just like all other good bien-pensants. You just don't like seeing the consequences clearly spelled out.
GH just actually adjusted prices so that they are not (presumably) losing money. I'm fine with that, and they show me the new fees.
Again, open the article! As I said, in the first three second of the video that starts playing, the reporter says "$5 fee".
>GH just actually adjusted prices so that they are not (presumably) losing money. I'm fine with that, and they show me the new fees.
If you don't understand that GrubHub is doing the exact same thing as DoorDash but just not being up front about it, I don't know what more to say.
DD chose to just add $5 to all orders; that is not what the law requires based on any sources I have found. Here's a quote from one:
> Under this PayUp policy, a pay floor must be met based on “engaged” time and miles spent on the job — from when it’s accepted/started to when it’s completed.
> Minimum compensation: Network companies must pay the greater of
> Minimum per-minute amount of $0.44 and a per-mile amount
> OR
> Minimum per-offer amount of $5
You may see a $5 there - that's the MINIMUM pay for the entire order, and it is an or, not an and. There is no obligation for them to charge an extra $5/order and pass it on to the driver.
In my experience using GrubHub after these changes, they did not raise the cost of all my orders by $5.
Oh, good grief. Think, before you mindlessly quote. A $0.44 per-minute amount means that every 10 minutes = $4.44. (And that's not including whatever is the per-mile amount!) When was the last time a DoorDash order took less than 10 minutes for delivery?
>You may see a $5 there - that's the MINIMUM pay for the entire order, and it is an or, not an and. There is no obligation for them to charge an extra $5/order and pass it on to the driver.
There is also no obligation for DoorDash to not pass the cost on to the customer (not "driver"). To put another way, you are saying that the only correct outcome here is for DoorDash to absorb 100% of the $5 fee, no ifs, ands, or buts.
But this is beside the point because, as I said, you are mindlessly quoting without thinking:
>> Minimum compensation: Network companies must pay the greater of
In other words, the floor for the additional fee is $5, no matter what. If anything, it sounds like DoorDash is doing customers a favor by capping the Seattle-mandated fee addition they pay at $5, with it absorbing any excess amount. Conversely, I bet some GrubHub orders' prices went up by more than $5.
The transition is predictably painful. A foreseeable effect of raising labour costs in one part of the market, and an elastic one at that, is lower employment there. Passing a law like this without any support for the workers whose income you're destroying is hard to position as reducing exploitation. If anything, it's exploiting them as symbols, a modern White Man's Burden by Seattle's electeds.
* Changes in demand unrelated to the fee
* (as noted in the article) A flood of labor supply since people may have thought Doordashing was a good job due tothe bill
* A change in price making people realize they don't need to waste money on delivery
* People dumping Doordash because they're assholes for passing costs onto the customer
As we've seen from megacorps in the past, they will 100% sabotage local markets in order to make workers' rights or attempts at taxation fail.
(edit to reorder)
Sometimes that may be true. Other times, you're just getting rid of a certain class of jobs.
Not sure I think we should create that here, though.
Edit: Wow, judging from downvotes it seems there are some folks here on HN that would like that underclass! Interesting!
What would the global economy look like without cheap labor? One can only guess.
A decision was made that a slave-wage is undesirable/illegal, so the wage-slave job goes away.
The argument is about do you believe people should decide for themselves that the wage-slave job is better than nothing, or should the government dictate that we don't tolerate wage-slaves by slave-wages here.
It gets messy because the "people should decide" message shares the same outcome as "corporates get richer", so strong incentive for the latter to amplify the former.
This whole story echos those union fights in our history textbooks.
Well, OK, I guess they could not do that then? McDonalds is hiring in NYC and paying a minimum of $16 an hour.
I do feel for people in that situation, but they're just getting greased in the collision between, on the one side, techno-utopian companies that want to bring in automation ASAP to eliminate their jobs and, on the other, big labor that is threatened by the gig-economy model and believes the better outcome is just for the jobs not to exist.
I'm pretty sure that the participants in the gig economy just wanted it to pay a bit better, rather than for it to get annihilated. I guess you find out who your friends really are.
If the only reason that a job could exist was that people had another job and/or got government subsidy this means the job shouldn't exist - it's not societies' job to support bad companies.
So, if they "just go away" that's okay. Give the people who don't have a job now government support and training to get a better job. At least the companies who tried to get rich by exploiting people stop existing then.
Do you not see the contradictions? Who is paying for that "government" support and training? Taxpayers have money for taxes because they work for a profit - else they cease to exist, or to appease the economically illiterate the politicians run societies into such debt that everyone (including those dastardly "exploitive companies") ceases to exist.
Everyone got drunk off VC backed loss taking to corner and monopolize the market but once they gotta turn a profit AND pay a living wage we quickly realize its never been a sustainable system.
Even without the additional city-based fee, these food delivery services companies are far too expensive.
<Law implemented and jobs disappear>
“Well those jobs were bad anyway, we are all better off without them”
There are no “bad” jobs - just labor that needs to be done, with a commiserate price. If the labor is too difficult to find at a price, the price goes up. You can’t artificially increase the price without losing jobs.
What about fentanyl dealer? Hitman? Psychologist for a social media or tobacco company? Telemarketer?
People in the 1930s came right out of the Great Depression with 25% unemployment rate. Stuff had to change, and radically at that, which is why FDR got elected.
Today's techies, meanwhile, are largely decoupled from the actual realities of the people. We live in decent homes with fat paychecks, and despite us working for the same company as the barely-surviving delivery driver, our lives rarely intersect other than at the next food delivery.
Because the "highly-educated techies" think of themselves as the next potential big founder over a tech company taking lumps of money from each transaction and making it big.
Closing that form of exploitation closes down all of those techies' wet dream of exploiting millions to be the next (pee-bottle) Bezos.
The problem comes that switching requires those jobs to go away. Even in the best case that's going to be very painful for the workers that lose their poverty-level job and have nothing. But what this article is highlighting is even worse - because of the way gig job works there isn't even a switch to fewer jobs livable-wage jobs, just less work spread between the same people. Hopefully that's temporary but it's not clear cut.
I think this is an example of a very painful policy choice. It might be the right decision long term but still can be a damaging transition.
Don’t get me wrong - nothing would make me happier than abundant living wage jobs, but if the demand isn’t there to support them, isn’t poverty level more poverty level jobs in the aggregate a better outcome than a binary outcome?