Uber business model spreads to food delivery
What’s Left contributors Ben Lewis and Amalia Savva have been travelling the United States in a minivan and often come across interesting happenings. Most recently, they passed through San Francisco, California, a place where Uber and Lift drivers abound, apartment prices are sky-rocketing, and blue collar workers are being pushed out of the city. The Bay area is an incubator for new money-making schemes, often to the detriment of workers and the general population.
Amalia and I are standing outside a Thai restaurant in downtown San Francisco. It’s been an hour and we’re getting hungry, but we’re not nearly as frustrated as a group of young men standing on the sidewalk beside us. They’ve been here just as long, and they won’t even get to eat the food when it’s finally ready, instead they’re going to bike over some bogglingly steep San Francisco hills (in the dark), deliver the food to someone else, and then hope that, even if the food is more than an hour late, they aren’t penalized – because at this point it’s very unlikely they’re getting a tip. It’s Uber for food delivery and it’s taking off.
Ninety minutes earlier, I had pulled up the restaurant’s website on my phone and ordered some food for pickup. We were short walk away and the friend we were staying with was busy packing for a move, so we decided to walk over.
The food was supposed to be ready in thirty minutes (at least that’s what the confirmation email said). So, half an hour after ordering, we walk into the restaurant and tell the host at the front we’ve come to pickup our dinner.
“Are you with Caviar or Postmates?” she asks with a worried look on her face.
I’m confused. I have no idea what those things are. I shake my head “no”.
She directs me to the back of the restaurant where a busy server informs me that no, our food isn’t ready yet, but I should check back in ten minutes.
It’s a nice night, so we wait outside and quickly notice that we aren’t the only ones waiting. There are three other men there, all focused on their phones. When we see their cooler bags, we become curious.
Time drags on. Every time I go back in, I’m told to return in another 10 minutes. The server is very nice and apologetic.
Amalia and I are fairly relaxed. San Francisco is awesome, we’ve been having a great time, and we don’t have pressing plans. We’re happy to just hangout in the mild evening air and watch people walk by, excited by the city’s Saturday night vibes.
Watching three other men waiting, we notice that they’re becoming increasingly agitated. Amalia engages one of them in conversation. As it turns out, the food isn’t for him but for a user of a service called Postmates. Their food is supposed to arrive to their apartment door in the next 5 minutes, but the restaurant has told him that they haven’t even started cooking it yet. He’s frantically trying to get in touch with someone at Postmates to find out whether he will be penalized if he’s late. It’s not his fault, he clarifies, the restaurant is running way behind.
Caviar and Postmates are two more examples of companies hoping to exploit the Uber economic model. Build a website or app that connects people who want something (let’s say Thai food) with companies that provide that something (a Thai restaurant), and then post that request so that another group of people (a group of glorified “private contractors”) can, with the click of a button, accept the contract to deliver that something to the person who ordered it. It’s similar to regular delivery, except that the person delivering the product doesn’t work for the restaurant. According to Caviar and Postmates, they are private contractors who work for themselves.
And the products available aren’t limited to food, they can be anything from toothpaste to t-shirts.
The problem is that, like Uber, these services are built on a hyper-capitalist business model that exploits people desperate for work by forcing them to take contracts with no benefits, protections, or guaranteed hours.
The Postmates courier gets off the phone. He’s been assured that, if it’s the restaurant’s fault that the food is delayed, he won’t be penalized. We’re joined in our conversation by another courier, this one contracts for Caviar. We’ve all been there for at least an hour. None of us have gotten our food. They’ve both been told that their orders haven’t been started. I’ve just been told the same (although the spring rolls have been ready for half an hour, basking under a set of warming lights), but the Pad Thai and Pad Kee Mao are still in the queue.
The Postmates courier talks about how he used to work in a kitchen at a restaurant. He says that services like Postmates and Caviar have probably doubled the number of orders this restaurant gets every night, but in his experience it’s likely the number of kitchen staff hasn’t changed – which is why he decided to quit kitchen work. He isn’t totally surprised they’re running behind, but it’s not helping him much; he only gets paid when the delivery is made.
The way these delivery services work varies. For those ordering, the cost of delivery might be a flat-rate or an amount that changes depending on the cost of the product.
For the couriers, there are also differences. Some get paid a flat rate for each delivery, some get paid based on the the cost of the product. Most make less than $10 per delivery. The two couriers agreed that $7 was average. However, there is no guarantee they will earn minimum wage on an hourly basis. Like many workers in the food service industry, these folks work for tips. Of course, those aren’t guaranteed either. Some get tipped automatically through the app, others in cash when the delivery is made – and when the food arrives an hour late because of the restaurant, it’s highly unlikely that the client will understand who’s at fault. Some get compensated at pennies per minute if they’re stuck sitting around waiting, but, for the most part, the money comes when the delivery is made. And when a courier is stuck waiting for an hour and a half outside of a restaurant, they aren’t making much of anything, just having their (apparently valueless) time wasted.
These aren’t the only challenges for the couriers. Since they are “self-employed” some don’t get sick days, benefits, guaranteed hours, or any kind of insurance. Many are rushing around busy cities on bikes under a lot of pressure to make deliveries as quickly as possible. It means the courier might get a bigger tip and can move onto another delivery. But, if they get into an accident and something happens to their bike, or worse, to them, there is no guarantee they will be taken care of. They may not get any money to fix the bike. They may not by covered for the hospital bills if they sprain an ankle. While they’re supposed to have medical insurance, they have to pay for it out of pocket, and many won’t because they just can’t afford it.
The Caviar courier gives up. It’s just not worth his time to wait any longer. He’s not earning anything, so he drops the order and takes off. Another courier will pick it up.
The Postmates courier decides to do the same. He’d rather earn nothing watching TV at home than waiting outside a restaurant for food that is already an hour late. He logs into the app and drops the order. After all his waiting, he’s earned nothing.
As he’s unlocking his bike, the server comes running out. His order is ready.
“Fuck me,” he exclaims.
He tries logging back into the app to find the order, but someone has already taken it. There’s nothing he can do. After all that time waiting, someone else will make the delivery and get the money.
He sighs. “You win some, you lose some.”
If that’s the vision for the new Uber economy, it’s not one worth getting excited about. Caviar and Postmates (and Uber) have no accountability. All they have to worry about is building an app and making money. They’re not in a position to lose much of anything. It kind of explains why they throw such temper tantrums when municipalities try to hold them to account. They’d rather just pickup and leave with all their toys than have to share their profits with workers. After all, regulation, accountability, and paying workers fair wages completely undermines their business model.
For these new shiny companies, the worker is the only entity that should have to suffer. Any and all potential losses are on their shoulders. These workers may have found a little bit of extra cash, but they’re at the bottom of the food chain. Some nights they get quick and easy orders, others are more of a struggle. Time is precious and in order to make a decent living they’re constantly rushing around the city putting themselves in danger.
Eventually, our order is ready. The server is very apologetic and says we won’t be charged. While that’s nice, we can’t help but feel terrible for the couriers who gave up outside. Neither the restaurant or their hyper-capitalist dispatchers seem interested in compensating them for their lost time.
NASA is becoming a victim of US-style capitalism
NASA used to be an example of US science at its best, but the US political and economic system is breaking it. NASA struggles due to constant interference from US law makers and continued privatization. Long-term monopoly contracts are regularly given to for-profit companies, substantially driving up costs over long periods of time.
Law makers consistently make strategic decisions about the future of NASA’s programs, reallocating funding from projects that don’t benefit them to ones that see more money being spent in their district or state. NASA has become incredibly adverse to failure and basic scientific research, because failure is an excuse for politicians to meddle further, and basic research isn’t sexy enough to get funding. In addition, the ongoing privatization means that companies are able to secure public subsidies to support their own capital investments and undermine the base operations of the public space program.
Science and invention involves far more failure than success, especially for projects like space exploration. While it seems there is a willingness to fail on the part of new entrant SpaceX – as it’s inflated stock provides it with money to burn – there are negative long-term implications for a reliance on this kind of financing. There is a fear within NASA, that failures and the mythology of innovation within the private sector will result in further cutbacks and legislative interference in the public space program. In essence, it is a downward spiral of privatization similar to what has occurred in other industries. A functional space program, as with all science-based programs, must have predicable, stable long-term funding allocated by the scientists doing the work.
For another perspective on these problems, one can look to Russia’s space program. Political pressure and interference has become so unmanageable it is undermining innovation. Following a recent one-day launch delay at a new facility (so short it barely qualifies as a delay when it comes to space exploration), Russia bureaucrats fired one of the workers involved, not because they had actually done anything wrong, but instead to set an example of what would happen if things didn’t go according to plan in the future.
This is not the way one engages in scientific innovation. As any scientist will tell you, often just as much is learned when an experiment fails as when it succeeds.
Proposed U.S. anti-encryption “laughable”
The U.S. Senate is posed to introduce new laws that would require tech companies to ensure they have the ability to access any information recorded or communicated using any of their products or services. The proposed language completely misunderstands how encryption and the legal system work.
In a pair of blog posts, Julian Sanchez tears into the legislation’s underlying assumptions. He rejects the argument that companies like Apple think they are “above the law” when they refuse to take orders from the FBI. On the contrary, as he points out, their objections have been made through legal appeals – they are actually working entirely within the law.
He then elaborates on how laughable it is that the government would even consider requiring companies to build “backdoors” into their encryption systems. Sometimes a criminal will shred all the evidence, sometimes they’ll flush it down the toilet, sometimes they’ll encrypt it. In all cases, it’s possible to effectively destroy evidence. Legislators may try to argue that encryption undermines the rule of law, but in the same way “claiming that toilets therefore undermine the Rule of Law would be laughed out of the room”.
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