Food Delivery Apps: Last Week Tonight with John Oliver (HBO)

LastWeekTonight
4 Apr 202426:11

Summary

TLDRThe rise of food delivery apps has revolutionized the way we dine, but at what cost? This script delves into the darker side of the convenience they provide, highlighting the financial struggles faced by restaurants due to high commission fees and the precarious working conditions of delivery drivers, who are often classified as independent contractors. It calls for awareness and action to ensure fair treatment and sustainable practices within the industry.

Takeaways

  • 🍽️ Food delivery apps have seen significant growth, particularly during the COVID-19 pandemic, as they provided an essential service for restaurant orders.
  • 📈 These apps market themselves as saviors of the restaurant industry, but they also take a substantial commission from the orders, sometimes up to 30% or more.
  • 💰 Restaurants may increase their prices on the apps to offset the high fees charged by delivery platforms, which can result in customers paying more than in-store.
  • 🍽️ Some restaurants have been listed on delivery apps without their consent, leading to unexpected orders and potential customer dissatisfaction.
  • 🚴‍♂️ Delivery workers face challenges such as having to cover their own expenses for equipment and dealing with the unpredictable nature of app algorithms that affect their earnings.
  • 🛑 Safety concerns are prevalent for delivery workers, who may engage in risky behaviors to meet delivery times and avoid penalties from the apps.
  • 💔 The gig economy classification of delivery workers means they often lack benefits and protections, including health insurance, which can lead to personal financial burdens in the event of injury.
  • 💸 Despite the billions of dollars in valuation, many food delivery platforms are not yet profitable and continue to operate at a loss.
  • 🌐 Consolidation within the industry has led to fewer competitors, with major players like Uber Eats, DoorDash, and GrubHub dominating the market.
  • 🏛️ Efforts to improve working conditions and wages for delivery workers have been met with resistance from the companies, as seen with the passing and campaigning against certain legislation.

Q & A

  • What is the main topic of the transcript?

    -The main topic of the transcript is the rise and impact of food delivery apps on restaurants, delivery workers, and customers.

  • How have food delivery apps changed the traditional food delivery model?

    -Food delivery apps have shifted the traditional model by introducing a platform where customers place orders through an app, and independent contractor drivers, not hired by the restaurant, deliver the food. This has led to increased convenience but also raised concerns about the profits of restaurants and the working conditions of delivery drivers.

  • What are some of the criticisms against food delivery apps' business models?

    -Critics argue that food delivery apps charge restaurants high commission fees, sometimes up to 30% of an order, and additional fees for promotions or app placement. This can significantly reduce the profit margins for restaurants. Additionally, the apps' treatment of delivery workers as independent contractors means they do not provide benefits or protections, leading to precarious working conditions.

  • How did the COVID-19 pandemic affect the growth of food delivery apps?

    -The COVID-19 pandemic led to a skyrocketing growth in food delivery apps as in-person dining was shut down, and people turned to delivery services for their food needs. This growth has not slowed down since the pandemic started.

  • What is the 'millennial lifestyle subsidy' mentioned in the transcript?

    -The 'millennial lifestyle subsidy' refers to the situation where customers, particularly millennials, are benefiting from the heavily subsidized prices offered by delivery apps. These apps are losing money to offer lower prices and convenience, which might not be sustainable in the long term.

  • What are some of the safety concerns for delivery workers?

    -Delivery workers face safety concerns such as speeding or breaking traffic rules to meet delivery times set by the apps, which can lead to accidents. They also face risks of robbery and attacks, and often work in extreme weather conditions without proper protection or compensation.

  • How do delivery apps classify their workers and what are the implications?

    -Delivery apps classify their workers as independent contractors, which means workers are responsible for their own expenses and do not receive benefits such as health insurance or paid leave. This classification also means workers lack labor protections and have limited legal recourse for issues like unfair wages or working conditions.

  • What is the role of tips in a delivery worker's income?

    -Tips can make up a significant portion of a delivery worker's income, ranging from a third to half of their total earnings. However, tips are not guaranteed and can be influenced by various factors, including the app's policies and customer preferences.

  • What is the situation with Prop 22 in California and how did delivery apps respond to it?

    -Prop 22 is a California ballot proposition that would exempt delivery apps and other gig economy companies from a law expanding protections to gig workers. The companies campaigned heavily for Prop 22, which passed, but it has faced criticism and potential legal challenges.

  • What can customers do to support restaurants and delivery workers?

    -Customers can support restaurants by ordering directly from them instead of through apps when possible, and by ensuring they tip delivery workers adequately. They can also rate and review services responsibly, understanding that a low rating can significantly impact a worker's livelihood.

  • What is the future outlook for food delivery apps and their impact on the industry?

    -The future outlook suggests a potential consolidation of the industry with a few large companies dominating the market. This raises concerns about monopolistic practices and the potential for increased prices and reduced worker protections. However, it also opens discussions about implementing guardrails to ensure fair practices for all parties involved.

Outlines

00:00

🍔 The Evolution of Food Delivery Apps

This paragraph discusses the rise of food delivery apps and their impact on the traditional food delivery system. It highlights the shift from direct restaurant delivery to app-based services, the convenience they offer to customers, and the significant increase in their usage during the COVID-19 pandemic. The paragraph also touches on the marketing strategies of these apps, which position them as saviors of the restaurant industry during the crisis. However, it sets the stage for a critical examination of the business models of these apps, hinting at the potential costs for all parties involved, from restaurant owners to delivery workers.

05:01

💸 The Financial Impact on Restaurants and Workers

This paragraph delves into the financial aspects of food delivery apps, focusing on the high commission rates charged to restaurants and the additional fees that can significantly reduce a restaurant's profit margins. It discusses the benefits for restaurants, such as increased exposure and potential for more customers, but contrasts this with the downsides, including the pressure to raise prices to offset the costs of using the apps. The paragraph also highlights the challenges faced by restaurants that have been listed on these apps without their consent, leading to unexpected orders and potential customer dissatisfaction due to third-party handling of food.

10:02

🚴‍♂️ The Gig Economy and Its Drawbacks for Delivery Workers

This paragraph examines the gig work nature of delivering for food apps, emphasizing the flexibility they offer but also the lack of job security and benefits. It discusses the expenses incurred by workers, such as the costs of equipment and the impact of opaque app algorithms on their wages and working conditions. The paragraph also touches on the safety risks delivery workers face, including traffic accidents and the lack of health insurance coverage. It highlights the precarious nature of their work, with income heavily reliant on tips and subject to the whims of app ratings and reviews.

15:03

💰 The Struggle for Profitability and Market Consolidation

This paragraph explores the financial struggles of food delivery platforms, noting that despite their high valuations, companies like Uber Eats are not yet profitable. It discusses the tech industry's disrupt-a-model approach, where companies grow rapidly at all costs, with the aim of cornering the market and eventually raising prices. The paragraph also mentions consolidation in the industry, with major players acquiring smaller companies, and the potential for future profitability. However, it questions the sustainability of the current business model, which relies on keeping prices low for consumers while squeezing restaurants and workers.

20:04

🌍 The Broader Implications and Potential Reforms

This paragraph discusses the broader implications of the food delivery app industry, including the impact on local economies and the need for reform. It highlights efforts in New York and California to improve working conditions and pay for delivery workers, and the resistance from delivery apps to these changes. The paragraph suggests that while customers benefit from the current system, it may not be sustainable in the long term and calls for increased awareness and action to support restaurants and workers. It encourages users to tip generously, to check if there are alternative ways to order directly from restaurants, and to rate their experiences fairly.

25:04

🥡 Taking Action: Supporting Restaurants and Delivery Workers

The final paragraph emphasizes the importance of taking action to support local restaurants and delivery workers. It suggests ways for customers to help, such as asking restaurants if there are preferred methods of ordering outside of the apps and tipping generously. The paragraph also stresses the significance of fair ratings and the potential impact of negative reviews on delivery workers' livelihoods. By following these suggestions, customers can contribute to a more equitable and sustainable food delivery ecosystem.

Mindmap

Keywords

💡Food Delivery Apps

Food delivery apps are digital platforms that facilitate the ordering and delivery of food from restaurants to customers' homes or offices. These apps have become increasingly popular, especially during the COVID-19 pandemic, as they provide convenience and reduce the need for physical interaction. In the video, the impact of these apps on restaurants, delivery workers, and consumers is discussed, highlighting both the benefits and criticisms associated with their business models.

💡Gig Economy

The gig economy refers to a labor market characterized by short-term contracts or freelance work, as opposed to permanent jobs. In the context of the video, delivery workers for food apps are often classified as independent contractors, which means they face precarity and lack certain employee benefits and protections. The gig economy is highlighted as a significant aspect of the food delivery industry, with its flexibility contrasted against the potential exploitation of workers.

💡Algorithms

Algorithms in the context of the video refer to the computer programs used by food delivery apps to manage and dictate various aspects of the service, such as order routing, delivery timings, and wage calculations. These algorithms are designed to optimize efficiency but can also exert control over delivery workers, potentially leading to high-pressure situations and safety risks.

💡Margins

Margins in a business context refer to the difference between the cost of goods sold and the revenue generated from their sale, indicating profitability. In the video, margins are discussed in relation to the high commission fees that food delivery apps charge restaurants, which can significantly reduce the latter's profits and financial viability.

💡Worker Exploitation

Worker exploitation occurs when employees are unfairly treated or not given fair compensation for their labor. In the video, this concept is applied to the conditions faced by delivery workers for food apps, who are often classified as independent contractors and thus lack certain legal protections, benefits, and are subject to the whims of app algorithms that can negatively impact their earnings and safety.

💡Monopolization

Monopolization refers to the process by which a company gains sufficient control of a market to dictate terms, prices, and competition. In the context of the video, it discusses the consolidation of power within the food delivery industry, with major players like Uber Eats, DoorDash, and GrubHub acquiring or merging with smaller competitors to increase their market share and influence.

💡Pandemic Era

The pandemic era refers to the period during and following the COVID-19 pandemic, characterized by significant societal and economic changes. In the video, this term is used to describe the period when food delivery apps saw a surge in usage as traditional dining options were limited, and it also discusses the challenges faced by the restaurant industry during this time.

💡Worker Safety

Worker safety refers to the protection of employees from harm or danger in the workplace. In the context of the video, it highlights the risks faced by delivery workers, who often navigate busy traffic and adverse weather conditions, and may lack adequate health insurance or protections as independent contractors.

💡Independent Contractors

Independent contractors are self-employed individuals who work for multiple clients or companies on a contractual basis, rather than as full-time employees. In the video, the classification of delivery workers as independent contractors is discussed, which impacts their rights, benefits, and financial stability, as they are not entitled to the same protections and support as traditional employees.

💡Consumer Convenience

Consumer convenience refers to the ease and accessibility of products or services for consumers. In the video, this concept is central to the discussion of food delivery apps, which offer a service that brings meals directly to customers' doors, often with a few clicks on a smartphone. However, the video also questions the long-term sustainability of this convenience, given the potential negative impacts on restaurants and workers.

Highlights

Food delivery apps have transformed the way we order and receive food, impacting both restaurant profits and delivery workers' conditions.

The rise of food delivery apps coincides with a significant increase in demand during the COVID-19 pandemic, leading to a near-doubling of sales for these services.

Restaurants are often charged high commission fees by delivery apps, sometimes up to 30% of an order's value, leaving them with reduced profits.

Some restaurants have been listed on delivery apps without their consent, leading to unwanted orders and potential customer dissatisfaction.

Delivery workers face challenges such as having to cover their own expenses for equipment and dealing with the unpredictable nature of app algorithms that dictate their wages.

The gig economy model used by delivery apps classifies workers as independent contractors, meaning they lack labor protections and benefits such as health insurance.

Despite the challenges and criticisms, delivery apps have not yet found a profitable business model, with companies like Uber Eats publicly admitting they are not yet profitable.

The current business model of delivery apps is likened to a subsidy for consumers, who benefit from low prices and convenience at the expense of restaurants and delivery workers.

There are ongoing legal and political battles over the rights of gig workers, with some regions implementing laws to guarantee minimum pay rates for delivery workers.

Large delivery app companies have spent significant amounts on lobbying and campaigning to exempt themselves from labor protections.

The future of food delivery apps may involve consolidating power and increasing prices once market dominance is achieved, similar to what happened with ride-sharing apps like Uber and Lyft.

Consumers have the power to support restaurants and delivery workers by choosing to order directly from restaurants and by tipping generously.

The narrative of delivery workers as independent contractors who enjoy flexibility and autonomy is contrasted with the reality of financial insecurity and lack of benefits.

The reliance on tips as a significant portion of earnings for delivery workers introduces instability and uncertainty into their income.

The risks associated with delivery jobs, including accidents and attacks, are exacerbated by the lack of health insurance and other worker protections.

The convenience and popularity of food delivery apps have raised questions about the sustainability of the business model and its impact on all stakeholders involved.

Efforts to improve conditions for delivery workers and restaurants include collective bargaining and legislative action to ensure fair wages and protections.

Transcripts

play00:04

our main story tonight concerns food

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delivery the thing that can turn a

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lethally depressing Saturday night into

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a lethally depressing Saturday night

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with pad

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tie specifically we're going to talk

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about food delivery apps you are

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probably familiar with them whether

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you're a user or a viewer of their

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constant ads featuring everyone from

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Jennifer Aniston to Big Bird to this

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Uber Superbowl one starring none other

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than Diddy and I'm guessing Uber Eats

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might be regretting that last one right

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now now they've even released ads for

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special occasions like this what are you

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eating this

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Pride well if you're a top it seems like

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you can eat whatever you

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want but if you're a bottom you're

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expected to

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Star not this Pride introducing the

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bottom friendly menu from

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Postmates that is a real act for a

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bottom friendly menu from Postmates

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featuring an eggplant in leather fetish

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gear looking like a character from tals

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who escaped their Evangelical upbringing

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and found happiness and by the way it is

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good to see the Peach from call me by

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your name staying booked and busy gay

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Parts should go to gay actors but even

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Beyond unlisted sex diet tips people use

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delivery apps for all sorts of reasons

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and some very good as this Driver F door

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Dash explains it's all it's all sort

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it's the average customer it's like it's

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not like a bunch of lazy people it's a

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lot of people need this because they're

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too busy with kids or or they don't have

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a license for whatever reason people

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also that are just drunk or stoned and

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they don't want to drunk they're

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actually being responsible and they

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don't want to drive and get the food

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themselves so I'll deliver to them you

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know there's plenty of times I'll come

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to a door and the door will open and so

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much pot SM com from and the person's

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eyes are like super red and I love that

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I think that's so funny it's like some

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guy he's like college age and he's just

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like oh thank God the food's here yeah I

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love that too I I know that might be

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hard to believe from me someone who

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looks like he's only ever confiscated

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weed but I'm all about the sticky icky

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I'm like Miss Piggy the way I'm hitting

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that green even now I'm as high as a

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giraffe's and as faced out as a

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ninth grader's essay trying to meet the

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page limits I get it okay but even if

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you are not stoned these apps are

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incredibly convenient and the truth is

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if you weren't using them before 20120

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you almost definitely have since because

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early on in covid after inperson dining

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shutdown their growth

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skyrocketed sales for delivery apps

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nearly doubled and haven't gone down

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since these apps basically have the kind

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of meteoric pandemic eriz that Skype

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absolutely thought they were in for and

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what happened Skype you had it and you

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lost it we used to use Skype as a verb

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to mean to video call someone rather

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than what it means now to completely

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up the easiest opportunity

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imaginable the pandemic truly was a

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watershed moment for delivery apps and

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they marketed themselves heavily as the

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saviors of the restaurant industry

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restaurants are our family the

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Cornerstone of our communities and our

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family needs

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help right now they're facing a crisis

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and they're counting on your takeout and

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delivery orders to help them

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through because if we don't treat

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restaurants like family today they might

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not be around to treat us like family

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tomorrow GrubHub together we can help

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save the restaurants love wow that hits

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all the check marks of every pandemic

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era ad soft twinkly piano music check

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and E cleed cross-section of races ages

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ethnicities and genders check a vague

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threat that if we don't participate in

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capitalism the things we hold near and

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dear will be destroyed checky check but

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even as our usage of these apps has

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increased there's been a rising chorus

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of criticism regarding their business

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models perhaps summed up best by this

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New York City council member when you

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see something

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uh it sucks the blood out of anything

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you call them leeches and that is

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exactly what GrubHub is it's true when

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you see something that sucks the blood

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out of anything you do call them leeches

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also if you see something that has 10

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stomachs 32 brains nine pairs of

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testicles and several hundred teeth

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that's a leech too but admittedly

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doesn't apply quite as neatly here and

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while that might sound harsh to you it's

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not totally unfair because for all the

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convenience these apps provide us the

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customers they come with a huge cost for

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everyone else involved from restaurant

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owners to those delivering our food so

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tonight let's talk about delivery apps

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and first let's talk about what food

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delivery used to look like picture it

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it's it's 2003 and you're at home hungry

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after a long day of work at Blockbuster

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Video so you check out the giant stack

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of takeout menus you keep in a drawer

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then trigger warning for anyone under 30

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you'd make a phone call to a restaurant

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say you're order out loud to a person

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who worked there and then a delivery

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worker also hired by the restaurant came

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to drop it off then you tipped in cash

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and chewed back into American Idol to

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watch the most famous person in the

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world Ruben

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studded the system was by no means

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perfect but restaurants made a profit on

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your order and delivery drivers were at

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least theoretically paid as employees

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but over the past decade apps have

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fundamentally shifted that model now the

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ordering part tends to take place via an

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app which then contacts a delivery

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driver who typically does doesn't work

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for the restaurant who transports the

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food to you and to be fair there have

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been some upsides in this model for

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restaurants there's definitely a lot of

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positives and one of them is like

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knowing that there's a delivery guy

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nearby to pick up their food and we

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don't have to have someone on staff we

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would need about 15 guys here at all

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times right before delivery apps that

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owner would have needed 15 guys just

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standing around at all times which

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honestly sounds less like a restaurant

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or more like someone describing an orgy

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that didn't quite take off off and abs

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will point out that they also put

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restaurants menus in front of hungry

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people which can help them with reaching

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more customers and growing Revenue but

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Revenue isn't the same as profit and

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let's talk about how exactly these

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companies make money because they make

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some off the various fees that you might

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see when you order but they also charge

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restaurant's 15 to 30% of an order in

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commissions and that number can get even

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higher when apps charge restaurants

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additional fees for everything from

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boosting their placement in the app to

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making them part of special promotions

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and especially during the pandemic when

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online orders were basically the only

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ones coming in restaurants who'd signed

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up for an app could be unpleasantly

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surprised when they saw just how little

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was left after the apps had taken their

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cut we signed up with during this

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pandemic is just any way to get any

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income to have cash on hand to be able

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to keep our staff this was grubhub's

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Bill to the Warren out of total orders

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of more than

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$16,000 GrubHub gave the restaurant only

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about 7,000 back it was equal to 42% of

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our sales we got so they took 58% of it

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it's true they took 58% of their sales I

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I know that just saying percentages at

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you might not be that helpful even

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though you know you are watching an

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episode of numbers being yelled at you

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with human

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Squidward but 58% is a lot now GrubHub

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insists that that restaurant agreed to

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those fees upfront and that 58% is an

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outlier but it's worth noting the

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Washington Post recently ran an

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experiment where they ordered the same

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meal for from this restaurant in San

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Francisco on three different apps the

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meal itself cost

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$2.69 before fees taxes and tip and when

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they contacted the restaurant they found

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that for Uber Eats the restaurant got

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1448 back for GrubHub it got 1247 and

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for door Dash it only got

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$10.59 those are Mafia margins also as a

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quick side note what a fun assignment

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for a journalist that was sometimes

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journalists track down sources or pour

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through thousands of pages of documents

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other times you get to order chicken

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Palm a bunch of times in a row it's

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really the luck of the draw but it's

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gotone to the point where many

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restaurants have taken to increasing

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their prices on the apps to at least

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partially offset those fees that is why

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you may have noticed food often costs

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more on an app than it does at the

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restaurants and you might think well

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restaurants should just refuse to be

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listed on these sites then but resisting

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them hasn't always worked apps of

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repeatedly added restaurants against

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their will in DC alone GrubHub was

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accused of listing more than a thousand

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restaurants available for delivery that

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they didn't have contracts with and if

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you're thinking well I still don't see a

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problem they get to be on the app

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without paying for it there are actually

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multiple issues there not every Rost

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restaurant wants to do delivery or is

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even set up for it and Grub hubs been

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accused of not warning restaurants

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before listing them leading to them

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being suddenly inundated with orders

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they never expected one in California

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even complained about grubhub's venu

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listing food that it does not actually

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make and has never made

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basically GrubHub would list a

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restaurant without its permission or

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knowledge and then make money by

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charging you a high delivery fee to

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bring the food to your door but that

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might put the restaurant itself in a

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tough spot because they might be

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disappointing customers in ways they

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don't even realize M Street Baking

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Company in Howell is open for takeout

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during the pandemic like many

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restaurants they were approached to join

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GrubHub for food delivery but declined

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we found out that they were sending

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people in pretending to just be regular

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customers but actually working for

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GrubHub and delivering our stuff without

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our knowledge they were offering

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milkshakes we don't put Lids on our

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milkshakes because they go directly to

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you so now it's going into somebody

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else's car that they could cough on

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sneeze on as a business if I knew that a

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second party was handling your food I

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would package your products probably

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differently than if I knew it was going

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right to you yeah of course you would

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and I am glad about that because I for

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one do not want to drink a milkshake

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that's been raw dogging the air in

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Kyle's VAP Smoke Filled Honda Civic and

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the thing is this practice has been

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standard in the industry right from the

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start just listen to the founder of

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Postmates talk about the company's early

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days when we launched Postmates 3 years

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ago we did deliveries from Chipotle's

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restaurant and we got a seasoned assist

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from them and they said we got a

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seasoned assist from them and they said

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like guys we don't really we're a little

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bit concerned about the food quality

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right but you know what do we had to

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lose so we decided to ignore it oh you

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did did you that's fun and imagine

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getting lectured on food safety by

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Chipotle the biggest red flag imaginable

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and blowing that off also I just want to

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go back so you can see Jim Kramer's

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expression there because this is the

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happiest I've ever seen anyone look he

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is positively giddy at this story of

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corporate recklessness he looks like a

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kid meeting a dog for the first time no

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one has ever been happier than this and

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in the case of of GrubHub it's

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occasionally engaged in tactics that

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seem more like a protection racket for

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instance in 2020 it allegedly listed

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restaurants that didn't partner with

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them as closed or not accepting online

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orders even when they were which feels

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especially shitty coming from the same

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company that made that ad saying that

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together we can help save the

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restaurants we love I guess GrubHub just

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forgot to add and burn the ones that

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don't make us money to the

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ground it is no wonder restaurant owners

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have increasingly turned on these apps

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liking them to a hostage situation and

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selling your soul to the devil which is

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if anything too kind at least when you

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make a deal with the devil he offers you

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something cool like a sick Golden Fiddle

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in return and he surrenders even when I

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think there's a pretty good case that

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he's the better Fiddler sure Johnny does

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rosin up his bow and play that fiddle

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heart but he's sampling old folk songs

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there's nothing original there the devil

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however is playing an original dissonant

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composition backed up by a band of

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demons he's bringing way more to the

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musical table now we don't have time for

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me to play both sides and fully convince

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you but go listen to that song again and

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tell me you're not having way more fun

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listening to the

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devil happy Easter by the way but it's

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but it's not just the restaurants that

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these apps can harm it's also the

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delivery workers in most places

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delivering for these companies is gig

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work you set your own hours and drive as

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much or as little as you choose and

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companies have sold this as a great

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thing GrubHub runs recruiting spot

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showing Happy People balancing child

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care careers as artists with working

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part-time doing deliveries and other

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companies make similar claims sometimes

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in wildly over-the-top ways like the

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head of door Dash here I think in many

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ways Dashers on door Dash look very

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similar to consumers in the sense that

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um they value their time um as much or

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sometimes more um than money and and and

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they in effect are choosing um you know

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some of these part-time gig

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opportunities so that um they can you

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know save for a project whatever that

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may be whether that's you know buying a

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gift for someone or starting an

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orphanage what did you just say starting

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an orphanage the are you talking

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about orphanages aren't generally side

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hustles you don't tend to see Rachel

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shelter for loose babies but I guess if

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you're a Tech Pro you've got it all

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planned out first you get a bunch of

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venture capital to disrupt the orphanage

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space then you Corner the orphanage

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Market automate it with robot workers to

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take care of the kids create a rating

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system for potential adoptive parents to

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rate the baby's Vibe fire babies who

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fail said Vibe check zero Severance

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obviously make wild claims about future

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profitability and before you know it

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boom it's IPO time Innovative profitable

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orphanages but the truth is for many of

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those engaged in Gig workor it's not a

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side job it's their main source of

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income and that can be a real problem

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when you consider that delivery apps

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classify their workers as independent

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contractors meaning they have to pay for

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all of their own expenses and as this

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guy in New York explains that can be a

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lot the bike itself cost between $1,800

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and $1,900 new I upgraded it in many

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ways for example the seat the phone

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holder so I can have it over here this

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battery cost me almost $450 so the total

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would be up to $2,500 because of only

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the bike cost $1,800 plus the battery

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that's $2,200 and I had to buy the

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backpack because the companies don't

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give you one and a helmet because they

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don't give you one either look that is

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all ridiculous but the backpack might be

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the most egregious part there this is a

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backpack you can't use for anything else

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imagine using it for school unless

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you're a second grader who shows up

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every day with a social studies book a

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PBJ and 13 orders of pad key ma it

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doesn't really work but the expenses are

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just the beginning here workers are also

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at the mercy of the app's opaque

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algorithms which are used to dictate

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speed behavior and ultimately the wages

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of the workers many apps set up a

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game-like system of rewards and

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penalties offering high scores for being

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on time and low scores and fewer orders

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for tardiness and of course a

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significant part of that system is

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negative reviews you might think a bad

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review is going to a restaurant or the

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app itself but all workers know getting

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one can severely restrict your options

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going forward in fact just a few

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negative responses have the power to dry

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up worker income or even get them booted

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off the platform alt together and those

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who've studied this will tell you that

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Dynamic is a significant problem much of

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reputation systems were put in place to

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be able to give consumers reviews of

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products that doesn't transfer well to

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workers effort turning it into the

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equivalent of

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evaluating whether we got a good coffee

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that place where there's slippage

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between a product and a

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person's um labor is is dangerous will

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replace the tyranny of the boss with

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tyranny of an

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algorithm and that is much worse I will

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tell you as a computer scientist I will

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tell you that that's much worse right

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that is a terrible system workers have

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even called the algorithm the patron

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fantasma or Phantom Boss which sounds

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like a reality show on Max that somehow

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already has 12

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seasons and this downward pressure is a

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big part of why you might see delivery

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workers speeding or going the wrong way

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down the street on their bike the clear

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incentive is to make as many orders as

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you can as quickly as you can even if

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that means compromising safety and

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speaking of safety these jobs can be

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risky in cities like New York delivery

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workers are constantly dodging traffic

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and have been robbed and attacked and

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that's even before people ask to bring

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them food through extreme weather like

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blizzards and even floods and by the way

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don't do that if you see a flash flood

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warning pop up on your phone and

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immediately opened GrubHub sorry you

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don't get to go to heaven that was the

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test and you failed it it is frankly no

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wonder that delivery driving is among

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the deadliest occupations in the country

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and because these workers are

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independent contractors apps don't have

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to pay for their health insurance in

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fact one survey found that of those

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who'd experienced a work rated injury

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three out of four delivery workers said

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they paid for medical care out of their

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own pocket all of which can lead to

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things like this supposedly heartwarming

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human interest story from January about

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a video that had gone viral bro what are

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you doing are you serious I got bills I

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respect that dude that's crazy this is

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how Kevin Ross has been making a living

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delivering food on a bike with a broken

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foot watch as he straps a walker onto

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the bike so he has support when he goes

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inside restaurants back in September

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Kevin says he was making a delivery for

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GrubHub when he was hit by a car I got

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hit I I blacked out next thing I know

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I'm in the hospital he needed surgery

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and doctors told him recovery would take

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months but with hardly any savings he

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had no choice but to get back to work

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well hold on no choice what do you mean

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GrubHub says they're all about giving

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their delivery workers choice they get

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to choose their own hours choose to run

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a red light rather than be punished by

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the algorithm and they get to choose to

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get back to work while severely injured

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instead of facing crushing medical bills

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they've got more choices than S haven't

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seen the

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movie so workers are vulnerable because

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they lack labor protections and health

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insurance and all of this risk is in

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service of a job where like

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unfortunately most service jobs most of

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their income comes in the form of tips

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which can make up a third to half of

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their total earnings but the thing is

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those tips obviously aren't guaranteed

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The Verge interviewed a delivery worker

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who reported biking from 77th Street on

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the Upper East Side 18 blocks south and

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over the Queensboro Bridge then up

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through Long Island City and over

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another bridge to Rosevelt island or to

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deliver a single slice of cake for no

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tip at all and look I get that if you

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ordering delivery on a single slice of

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cake you are clearly going through

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something because that is the single

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saddest order any human being could make

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but you got a tip and and this

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what you're probably thinking wow these

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companies are driving restaurants and

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delivery workers to ruin just to make

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massive profits so you might be

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surprised to hear this we should start

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by acknowledging that today Uber Eats

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does not make money Janelle salenave is

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head of Uber Eats we've been very uh

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public about the fact that it's not yet

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profitable and neither are her

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competitors the platforms themselves

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lose a ton of money in the hundreds of

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millions of dollars billions

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collectively why does this business even

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make sense I'm not sure it does and I

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think they're still trying to figure out

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how to make money of this even today wow

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they're still trying to figure out how

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to make money at this these are

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companies valued up billions of dollars

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and yet they'd be talked about the same

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way you talk about your cousin who sells

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jewelry on

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Etsy and while that might sound

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counterintuitive it actually makes

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perfect sense because the old menus in a

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drawer form of delivery set certain firm

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limits it involved One Restaurant

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directly hiring a delivery worker who

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then delivered food to a limited area

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but these apps introduce whole new

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categories of cost of the equation from

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marketing to lobbying to building and

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maintaining a whole website and they're

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basically following the classic Tech

play20:28

disrupt a model of using Wall Street

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money to grow at all costs Corner a

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market undercut their competitors and

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then buy them up or with the ultimate

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goal of monopolizing the sector and then

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massively raising prices think about how

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Uber and Lyft used to be much cheaper

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than traditional taxes and then once

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they dismantled that model they jacked

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their prices way up we're just at the

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point in the cycle where companies can

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lose a ton of money keep prices low for

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consumers even as they try and offset

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that by squeezing restaurants and

play20:55

delivery workers at the bottom but the

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consolid solidation era has very much

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begun uberit bought Postmates door Dash

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bought caviar and GrubHub merged with

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seamless in fact GrubHub and door Dash

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alone comprise more than 20 companies

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that once competed with one another and

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some of these companies will tell you

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that that they're now either breaking

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even or turning a slight profit though

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some of those claims have significant

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caats to them but in general we're

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currently in a weird situation where the

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restaurants are losing out the delivery

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workers are losing out and even the

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companies are struggling the main winner

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so far has actually been us the

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customers because as this business

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journalist points out we're getting an

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incredibly convenient service and paying

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less than it's technically worth I call

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this the millennial lifestyle subsidy

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right every single time that you're

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using door Dash or using Uber you're

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getting a little bit of money back from

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these companies they're saying we're

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never going to charge you as much as the

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service actually costs so I think it's

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ironic I think it's interesting and I

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also think it just can't last and he's

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probably right though personally I find

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it a little hard to get mad at the idea

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of Millennials getting some sort of

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subsidy in life after all this is a

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group who will never be able to afford a

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house is drowning in student debt and

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can't even enjoy Harry Potter anymore

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you can't spell millennial without three

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massive

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L's but if it truly is the case that

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we're headed to a point where a few

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massive companies dominate this industry

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now might be the time to talk about

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putting some real guard rails up and I

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will say some places are trying here in

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New York thanks to the hard work of

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among others a collective of delivery

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workers called Lost delivery stas unidos

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the city passed a law that guarantees a

play22:38

minimum pay rate for delivery workers

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but the apps haven't made it easy once

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that rule rolled out they increased

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their fees to users and restaurants and

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tried to reduce the end price to the

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consumer by making it harder to find the

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Tipping option if you live in New York

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check to make sure you're still tipping

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people cuz it's possible that you're not

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and in California the state passed a law

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in 2019 expanding protections to Gig

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workers but some of the big delivery

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apps along with r chair companies and

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others pushed a ballot proposition

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called prop 22 that would carve

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themselves out of that law and they went

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all out to get it ped the latest data

play23:17

from the Secretary of State's office

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show Uber Lyft door Dash Postmates and

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instacart have spent more than $184

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million combined campaigning for prop 22

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it is very um David and Goliath if you

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will um these billionaire corporations

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spending so much money to exempt

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themselves from basic labor protections

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it tells you what it's worth to them

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right it does tell you what it's worth

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to them at least $184 million and that's

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a ton of money that's as much as

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and this is true this racehorse think

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about that they're denying workers basic

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labor rights when instead they could be

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getting in on the ground floor of this

play23:55

horse and I get it I I get where that

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valuation is

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coming and the sad thing is that ballot

play24:03

initiative passed and it could be very

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hard to undo given it requires a 7/8

play24:07

vote in both the State Assembly and

play24:09

Senate to amend it in any way which is

play24:11

unprecedented although that part at

play24:13

least May hopefully get overturned by

play24:15

California Supreme Court later this year

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and there are fights brewing in other

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places including Seattle which is

play24:21

considering rolling back worker

play24:22

protections and Massachusetts where

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several apps are pushing for a prop 22

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style ballot initiative this November

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but while these issues get addressed at

play24:31

the federal state and city level it

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might also be worth talking about what

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you yourself can do in the meantime

play24:37

because I am not saying you shouldn't

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use delivery apps a lot of people rely

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on them from working parents to disabled

play24:44

people to people who are like me right

play24:46

now baked out of their minds but

play24:50

the fact is it is just too easy to use

play24:53

these apps while completely forgetting

play24:56

the actual human beings behind them who

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Fates you control by just pressing a

play25:00

button so so when it comes to

play25:02

restaurants if there is one that you

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like to order from ask if there is a way

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that they would rather you do that than

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through an app and if there is do it and

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when it comes to delivery workers

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remember bad reviews can directly impact

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their livelihood so I would go with five

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stars across the board basically if

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you're rating anything less than five

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stars there has to be visible semen in

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your food and you have to be absolutely

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sure that it's not just a glaze and and

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even then I'd still go with four stars

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and while they should go without saying

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you have to tip and if you are making

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someone cross multiple Bridges with a

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single piece of cake first I'm so sorry

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about whatever is going on in your

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hectic life but you need to tip even

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more and if if we all do this then and

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only then we will be able to say with a

play25:53

clear conscience oh thank God the food's

play25:57

here

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for

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Related Tags
Food DeliveryGig EconomyWorker RightsRestaurant StrugglesConsumer ConvenienceIndustry ProfitsApp AlgorithmsMillennial SubsidyLabour ProtectionTech Disruption