Food Delivery Apps: Last Week Tonight with John Oliver (HBO)
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
- π½οΈ Food delivery apps have seen significant growth, particularly during the COVID-19 pandemic, as they provided an essential service for restaurant orders.
- π 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.
- π° 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.
- π½οΈ Some restaurants have been listed on delivery apps without their consent, leading to unexpected orders and potential customer dissatisfaction.
- π΄ββοΈ 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.
- π Safety concerns are prevalent for delivery workers, who may engage in risky behaviors to meet delivery times and avoid penalties from the apps.
- π 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.
- πΈ Despite the billions of dollars in valuation, many food delivery platforms are not yet profitable and continue to operate at a loss.
- π Consolidation within the industry has led to fewer competitors, with major players like Uber Eats, DoorDash, and GrubHub dominating the market.
- ποΈ 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
π 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.
πΈ 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.
π΄ββοΈ 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.
π° 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.
π 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.
π₯‘ 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
π‘Food Delivery Apps
π‘Gig Economy
π‘Algorithms
π‘Margins
π‘Worker Exploitation
π‘Monopolization
π‘Pandemic Era
π‘Worker Safety
π‘Independent Contractors
π‘Consumer Convenience
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
our main story tonight concerns food
delivery the thing that can turn a
lethally depressing Saturday night into
a lethally depressing Saturday night
with pad
tie specifically we're going to talk
about food delivery apps you are
probably familiar with them whether
you're a user or a viewer of their
constant ads featuring everyone from
Jennifer Aniston to Big Bird to this
Uber Superbowl one starring none other
than Diddy and I'm guessing Uber Eats
might be regretting that last one right
now now they've even released ads for
special occasions like this what are you
eating this
Pride well if you're a top it seems like
you can eat whatever you
want but if you're a bottom you're
expected to
Star not this Pride introducing the
bottom friendly menu from
Postmates that is a real act for a
bottom friendly menu from Postmates
featuring an eggplant in leather fetish
gear looking like a character from tals
who escaped their Evangelical upbringing
and found happiness and by the way it is
good to see the Peach from call me by
your name staying booked and busy gay
Parts should go to gay actors but even
Beyond unlisted sex diet tips people use
delivery apps for all sorts of reasons
and some very good as this Driver F door
Dash explains it's all it's all sort
it's the average customer it's like it's
not like a bunch of lazy people it's a
lot of people need this because they're
too busy with kids or or they don't have
a license for whatever reason people
also that are just drunk or stoned and
they don't want to drunk they're
actually being responsible and they
don't want to drive and get the food
themselves so I'll deliver to them you
know there's plenty of times I'll come
to a door and the door will open and so
much pot SM com from and the person's
eyes are like super red and I love that
I think that's so funny it's like some
guy he's like college age and he's just
like oh thank God the food's here yeah I
love that too I I know that might be
hard to believe from me someone who
looks like he's only ever confiscated
weed but I'm all about the sticky icky
I'm like Miss Piggy the way I'm hitting
that green even now I'm as high as a
giraffe's and as faced out as a
ninth grader's essay trying to meet the
page limits I get it okay but even if
you are not stoned these apps are
incredibly convenient and the truth is
if you weren't using them before 20120
you almost definitely have since because
early on in covid after inperson dining
shutdown their growth
skyrocketed sales for delivery apps
nearly doubled and haven't gone down
since these apps basically have the kind
of meteoric pandemic eriz that Skype
absolutely thought they were in for and
what happened Skype you had it and you
lost it we used to use Skype as a verb
to mean to video call someone rather
than what it means now to completely
up the easiest opportunity
imaginable the pandemic truly was a
watershed moment for delivery apps and
they marketed themselves heavily as the
saviors of the restaurant industry
restaurants are our family the
Cornerstone of our communities and our
family needs
help right now they're facing a crisis
and they're counting on your takeout and
delivery orders to help them
through because if we don't treat
restaurants like family today they might
not be around to treat us like family
tomorrow GrubHub together we can help
save the restaurants love wow that hits
all the check marks of every pandemic
era ad soft twinkly piano music check
and E cleed cross-section of races ages
ethnicities and genders check a vague
threat that if we don't participate in
capitalism the things we hold near and
dear will be destroyed checky check but
even as our usage of these apps has
increased there's been a rising chorus
of criticism regarding their business
models perhaps summed up best by this
New York City council member when you
see something
uh it sucks the blood out of anything
you call them leeches and that is
exactly what GrubHub is it's true when
you see something that sucks the blood
out of anything you do call them leeches
also if you see something that has 10
stomachs 32 brains nine pairs of
testicles and several hundred teeth
that's a leech too but admittedly
doesn't apply quite as neatly here and
while that might sound harsh to you it's
not totally unfair because for all the
convenience these apps provide us the
customers they come with a huge cost for
everyone else involved from restaurant
owners to those delivering our food so
tonight let's talk about delivery apps
and first let's talk about what food
delivery used to look like picture it
it's it's 2003 and you're at home hungry
after a long day of work at Blockbuster
Video so you check out the giant stack
of takeout menus you keep in a drawer
then trigger warning for anyone under 30
you'd make a phone call to a restaurant
say you're order out loud to a person
who worked there and then a delivery
worker also hired by the restaurant came
to drop it off then you tipped in cash
and chewed back into American Idol to
watch the most famous person in the
world Ruben
studded the system was by no means
perfect but restaurants made a profit on
your order and delivery drivers were at
least theoretically paid as employees
but over the past decade apps have
fundamentally shifted that model now the
ordering part tends to take place via an
app which then contacts a delivery
driver who typically does doesn't work
for the restaurant who transports the
food to you and to be fair there have
been some upsides in this model for
restaurants there's definitely a lot of
positives and one of them is like
knowing that there's a delivery guy
nearby to pick up their food and we
don't have to have someone on staff we
would need about 15 guys here at all
times right before delivery apps that
owner would have needed 15 guys just
standing around at all times which
honestly sounds less like a restaurant
or more like someone describing an orgy
that didn't quite take off off and abs
will point out that they also put
restaurants menus in front of hungry
people which can help them with reaching
more customers and growing Revenue but
Revenue isn't the same as profit and
let's talk about how exactly these
companies make money because they make
some off the various fees that you might
see when you order but they also charge
restaurant's 15 to 30% of an order in
commissions and that number can get even
higher when apps charge restaurants
additional fees for everything from
boosting their placement in the app to
making them part of special promotions
and especially during the pandemic when
online orders were basically the only
ones coming in restaurants who'd signed
up for an app could be unpleasantly
surprised when they saw just how little
was left after the apps had taken their
cut we signed up with during this
pandemic is just any way to get any
income to have cash on hand to be able
to keep our staff this was grubhub's
Bill to the Warren out of total orders
of more than
$16,000 GrubHub gave the restaurant only
about 7,000 back it was equal to 42% of
our sales we got so they took 58% of it
it's true they took 58% of their sales I
I know that just saying percentages at
you might not be that helpful even
though you know you are watching an
episode of numbers being yelled at you
with human
Squidward but 58% is a lot now GrubHub
insists that that restaurant agreed to
those fees upfront and that 58% is an
outlier but it's worth noting the
Washington Post recently ran an
experiment where they ordered the same
meal for from this restaurant in San
Francisco on three different apps the
meal itself cost
$2.69 before fees taxes and tip and when
they contacted the restaurant they found
that for Uber Eats the restaurant got
1448 back for GrubHub it got 1247 and
for door Dash it only got
$10.59 those are Mafia margins also as a
quick side note what a fun assignment
for a journalist that was sometimes
journalists track down sources or pour
through thousands of pages of documents
other times you get to order chicken
Palm a bunch of times in a row it's
really the luck of the draw but it's
gotone to the point where many
restaurants have taken to increasing
their prices on the apps to at least
partially offset those fees that is why
you may have noticed food often costs
more on an app than it does at the
restaurants and you might think well
restaurants should just refuse to be
listed on these sites then but resisting
them hasn't always worked apps of
repeatedly added restaurants against
their will in DC alone GrubHub was
accused of listing more than a thousand
restaurants available for delivery that
they didn't have contracts with and if
you're thinking well I still don't see a
problem they get to be on the app
without paying for it there are actually
multiple issues there not every Rost
restaurant wants to do delivery or is
even set up for it and Grub hubs been
accused of not warning restaurants
before listing them leading to them
being suddenly inundated with orders
they never expected one in California
even complained about grubhub's venu
listing food that it does not actually
make and has never made
basically GrubHub would list a
restaurant without its permission or
knowledge and then make money by
charging you a high delivery fee to
bring the food to your door but that
might put the restaurant itself in a
tough spot because they might be
disappointing customers in ways they
don't even realize M Street Baking
Company in Howell is open for takeout
during the pandemic like many
restaurants they were approached to join
GrubHub for food delivery but declined
we found out that they were sending
people in pretending to just be regular
customers but actually working for
GrubHub and delivering our stuff without
our knowledge they were offering
milkshakes we don't put Lids on our
milkshakes because they go directly to
you so now it's going into somebody
else's car that they could cough on
sneeze on as a business if I knew that a
second party was handling your food I
would package your products probably
differently than if I knew it was going
right to you yeah of course you would
and I am glad about that because I for
one do not want to drink a milkshake
that's been raw dogging the air in
Kyle's VAP Smoke Filled Honda Civic and
the thing is this practice has been
standard in the industry right from the
start just listen to the founder of
Postmates talk about the company's early
days when we launched Postmates 3 years
ago we did deliveries from Chipotle's
restaurant and we got a seasoned assist
from them and they said we got a
seasoned assist from them and they said
like guys we don't really we're a little
bit concerned about the food quality
right but you know what do we had to
lose so we decided to ignore it oh you
did did you that's fun and imagine
getting lectured on food safety by
Chipotle the biggest red flag imaginable
and blowing that off also I just want to
go back so you can see Jim Kramer's
expression there because this is the
happiest I've ever seen anyone look he
is positively giddy at this story of
corporate recklessness he looks like a
kid meeting a dog for the first time no
one has ever been happier than this and
in the case of of GrubHub it's
occasionally engaged in tactics that
seem more like a protection racket for
instance in 2020 it allegedly listed
restaurants that didn't partner with
them as closed or not accepting online
orders even when they were which feels
especially shitty coming from the same
company that made that ad saying that
together we can help save the
restaurants we love I guess GrubHub just
forgot to add and burn the ones that
don't make us money to the
ground it is no wonder restaurant owners
have increasingly turned on these apps
liking them to a hostage situation and
selling your soul to the devil which is
if anything too kind at least when you
make a deal with the devil he offers you
something cool like a sick Golden Fiddle
in return and he surrenders even when I
think there's a pretty good case that
he's the better Fiddler sure Johnny does
rosin up his bow and play that fiddle
heart but he's sampling old folk songs
there's nothing original there the devil
however is playing an original dissonant
composition backed up by a band of
demons he's bringing way more to the
musical table now we don't have time for
me to play both sides and fully convince
you but go listen to that song again and
tell me you're not having way more fun
listening to the
devil happy Easter by the way but it's
but it's not just the restaurants that
these apps can harm it's also the
delivery workers in most places
delivering for these companies is gig
work you set your own hours and drive as
much or as little as you choose and
companies have sold this as a great
thing GrubHub runs recruiting spot
showing Happy People balancing child
care careers as artists with working
part-time doing deliveries and other
companies make similar claims sometimes
in wildly over-the-top ways like the
head of door Dash here I think in many
ways Dashers on door Dash look very
similar to consumers in the sense that
um they value their time um as much or
sometimes more um than money and and and
they in effect are choosing um you know
some of these part-time gig
opportunities so that um they can you
know save for a project whatever that
may be whether that's you know buying a
gift for someone or starting an
orphanage what did you just say starting
an orphanage the are you talking
about orphanages aren't generally side
hustles you don't tend to see Rachel
shelter for loose babies but I guess if
you're a Tech Pro you've got it all
planned out first you get a bunch of
venture capital to disrupt the orphanage
space then you Corner the orphanage
Market automate it with robot workers to
take care of the kids create a rating
system for potential adoptive parents to
rate the baby's Vibe fire babies who
fail said Vibe check zero Severance
obviously make wild claims about future
profitability and before you know it
boom it's IPO time Innovative profitable
orphanages but the truth is for many of
those engaged in Gig workor it's not a
side job it's their main source of
income and that can be a real problem
when you consider that delivery apps
classify their workers as independent
contractors meaning they have to pay for
all of their own expenses and as this
guy in New York explains that can be a
lot the bike itself cost between $1,800
and $1,900 new I upgraded it in many
ways for example the seat the phone
holder so I can have it over here this
battery cost me almost $450 so the total
would be up to $2,500 because of only
the bike cost $1,800 plus the battery
that's $2,200 and I had to buy the
backpack because the companies don't
give you one and a helmet because they
don't give you one either look that is
all ridiculous but the backpack might be
the most egregious part there this is a
backpack you can't use for anything else
imagine using it for school unless
you're a second grader who shows up
every day with a social studies book a
PBJ and 13 orders of pad key ma it
doesn't really work but the expenses are
just the beginning here workers are also
at the mercy of the app's opaque
algorithms which are used to dictate
speed behavior and ultimately the wages
of the workers many apps set up a
game-like system of rewards and
penalties offering high scores for being
on time and low scores and fewer orders
for tardiness and of course a
significant part of that system is
negative reviews you might think a bad
review is going to a restaurant or the
app itself but all workers know getting
one can severely restrict your options
going forward in fact just a few
negative responses have the power to dry
up worker income or even get them booted
off the platform alt together and those
who've studied this will tell you that
Dynamic is a significant problem much of
reputation systems were put in place to
be able to give consumers reviews of
products that doesn't transfer well to
workers effort turning it into the
equivalent of
evaluating whether we got a good coffee
that place where there's slippage
between a product and a
person's um labor is is dangerous will
replace the tyranny of the boss with
tyranny of an
algorithm and that is much worse I will
tell you as a computer scientist I will
tell you that that's much worse right
that is a terrible system workers have
even called the algorithm the patron
fantasma or Phantom Boss which sounds
like a reality show on Max that somehow
already has 12
seasons and this downward pressure is a
big part of why you might see delivery
workers speeding or going the wrong way
down the street on their bike the clear
incentive is to make as many orders as
you can as quickly as you can even if
that means compromising safety and
speaking of safety these jobs can be
risky in cities like New York delivery
workers are constantly dodging traffic
and have been robbed and attacked and
that's even before people ask to bring
them food through extreme weather like
blizzards and even floods and by the way
don't do that if you see a flash flood
warning pop up on your phone and
immediately opened GrubHub sorry you
don't get to go to heaven that was the
test and you failed it it is frankly no
wonder that delivery driving is among
the deadliest occupations in the country
and because these workers are
independent contractors apps don't have
to pay for their health insurance in
fact one survey found that of those
who'd experienced a work rated injury
three out of four delivery workers said
they paid for medical care out of their
own pocket all of which can lead to
things like this supposedly heartwarming
human interest story from January about
a video that had gone viral bro what are
you doing are you serious I got bills I
respect that dude that's crazy this is
how Kevin Ross has been making a living
delivering food on a bike with a broken
foot watch as he straps a walker onto
the bike so he has support when he goes
inside restaurants back in September
Kevin says he was making a delivery for
GrubHub when he was hit by a car I got
hit I I blacked out next thing I know
I'm in the hospital he needed surgery
and doctors told him recovery would take
months but with hardly any savings he
had no choice but to get back to work
well hold on no choice what do you mean
GrubHub says they're all about giving
their delivery workers choice they get
to choose their own hours choose to run
a red light rather than be punished by
the algorithm and they get to choose to
get back to work while severely injured
instead of facing crushing medical bills
they've got more choices than S haven't
seen the
movie so workers are vulnerable because
they lack labor protections and health
insurance and all of this risk is in
service of a job where like
unfortunately most service jobs most of
their income comes in the form of tips
which can make up a third to half of
their total earnings but the thing is
those tips obviously aren't guaranteed
The Verge interviewed a delivery worker
who reported biking from 77th Street on
the Upper East Side 18 blocks south and
over the Queensboro Bridge then up
through Long Island City and over
another bridge to Rosevelt island or to
deliver a single slice of cake for no
tip at all and look I get that if you
ordering delivery on a single slice of
cake you are clearly going through
something because that is the single
saddest order any human being could make
but you got a tip and and this
what you're probably thinking wow these
companies are driving restaurants and
delivery workers to ruin just to make
massive profits so you might be
surprised to hear this we should start
by acknowledging that today Uber Eats
does not make money Janelle salenave is
head of Uber Eats we've been very uh
public about the fact that it's not yet
profitable and neither are her
competitors the platforms themselves
lose a ton of money in the hundreds of
millions of dollars billions
collectively why does this business even
make sense I'm not sure it does and I
think they're still trying to figure out
how to make money of this even today wow
they're still trying to figure out how
to make money at this these are
companies valued up billions of dollars
and yet they'd be talked about the same
way you talk about your cousin who sells
jewelry on
Etsy and while that might sound
counterintuitive it actually makes
perfect sense because the old menus in a
drawer form of delivery set certain firm
limits it involved One Restaurant
directly hiring a delivery worker who
then delivered food to a limited area
but these apps introduce whole new
categories of cost of the equation from
marketing to lobbying to building and
maintaining a whole website and they're
basically following the classic Tech
disrupt a model of using Wall Street
money to grow at all costs Corner a
market undercut their competitors and
then buy them up or with the ultimate
goal of monopolizing the sector and then
massively raising prices think about how
Uber and Lyft used to be much cheaper
than traditional taxes and then once
they dismantled that model they jacked
their prices way up we're just at the
point in the cycle where companies can
lose a ton of money keep prices low for
consumers even as they try and offset
that by squeezing restaurants and
delivery workers at the bottom but the
consolid solidation era has very much
begun uberit bought Postmates door Dash
bought caviar and GrubHub merged with
seamless in fact GrubHub and door Dash
alone comprise more than 20 companies
that once competed with one another and
some of these companies will tell you
that that they're now either breaking
even or turning a slight profit though
some of those claims have significant
caats to them but in general we're
currently in a weird situation where the
restaurants are losing out the delivery
workers are losing out and even the
companies are struggling the main winner
so far has actually been us the
customers because as this business
journalist points out we're getting an
incredibly convenient service and paying
less than it's technically worth I call
this the millennial lifestyle subsidy
right every single time that you're
using door Dash or using Uber you're
getting a little bit of money back from
these companies they're saying we're
never going to charge you as much as the
service actually costs so I think it's
ironic I think it's interesting and I
also think it just can't last and he's
probably right though personally I find
it a little hard to get mad at the idea
of Millennials getting some sort of
subsidy in life after all this is a
group who will never be able to afford a
house is drowning in student debt and
can't even enjoy Harry Potter anymore
you can't spell millennial without three
massive
L's but if it truly is the case that
we're headed to a point where a few
massive companies dominate this industry
now might be the time to talk about
putting some real guard rails up and I
will say some places are trying here in
New York thanks to the hard work of
among others a collective of delivery
workers called Lost delivery stas unidos
the city passed a law that guarantees a
minimum pay rate for delivery workers
but the apps haven't made it easy once
that rule rolled out they increased
their fees to users and restaurants and
tried to reduce the end price to the
consumer by making it harder to find the
Tipping option if you live in New York
check to make sure you're still tipping
people cuz it's possible that you're not
and in California the state passed a law
in 2019 expanding protections to Gig
workers but some of the big delivery
apps along with r chair companies and
others pushed a ballot proposition
called prop 22 that would carve
themselves out of that law and they went
all out to get it ped the latest data
from the Secretary of State's office
show Uber Lyft door Dash Postmates and
instacart have spent more than $184
million combined campaigning for prop 22
it is very um David and Goliath if you
will um these billionaire corporations
spending so much money to exempt
themselves from basic labor protections
it tells you what it's worth to them
right it does tell you what it's worth
to them at least $184 million and that's
a ton of money that's as much as
and this is true this racehorse think
about that they're denying workers basic
labor rights when instead they could be
getting in on the ground floor of this
horse and I get it I I get where that
valuation is
coming and the sad thing is that ballot
initiative passed and it could be very
hard to undo given it requires a 7/8
vote in both the State Assembly and
Senate to amend it in any way which is
unprecedented although that part at
least May hopefully get overturned by
California Supreme Court later this year
and there are fights brewing in other
places including Seattle which is
considering rolling back worker
protections and Massachusetts where
several apps are pushing for a prop 22
style ballot initiative this November
but while these issues get addressed at
the federal state and city level it
might also be worth talking about what
you yourself can do in the meantime
because I am not saying you shouldn't
use delivery apps a lot of people rely
on them from working parents to disabled
people to people who are like me right
now baked out of their minds but
the fact is it is just too easy to use
these apps while completely forgetting
the actual human beings behind them who
Fates you control by just pressing a
button so so when it comes to
restaurants if there is one that you
like to order from ask if there is a way
that they would rather you do that than
through an app and if there is do it and
when it comes to delivery workers
remember bad reviews can directly impact
their livelihood so I would go with five
stars across the board basically if
you're rating anything less than five
stars there has to be visible semen in
your food and you have to be absolutely
sure that it's not just a glaze and and
even then I'd still go with four stars
and while they should go without saying
you have to tip and if you are making
someone cross multiple Bridges with a
single piece of cake first I'm so sorry
about whatever is going on in your
hectic life but you need to tip even
more and if if we all do this then and
only then we will be able to say with a
clear conscience oh thank God the food's
here
for
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