Five ways the food industry should protect the people behind our food as technology evolves.
Five ways the food industry should protect the people behind our food as technology evolves.
July 24, 2017
The way we engage with food is changing fast. Apps like UberEats, Instacart, and DoorDash enable consumers to order grocery items or take-out meals delivered directly to their doorsteps. Meal kit delivery services like Blue Apron, Hello Fresh, and Home Chef send subscribers a box of prep-ready ingredients each week, along with the recipes to prepare them. And automated purchasing processes enable eaters to order fast food by touch screen and shop for groceries by filling their bags and leaving the store without waiting in line or checking out.
As automation, peer-to-peer transactions, and online delivery services re-shape food-system business models, the relationship between employers and workers has also begun to shift—and not always in ways that benefit workers. While many companies—and some workers—benefit from the “gig economy,” this revolution in how people work has outpaced efforts to maintain safe working conditions, fair labor practices, and job security.
The ongoing, rapid expansion of the tech economy may only intensify the challenges facing the food system workforce. But despite the speed, size, and scope of these, there are a number of real-world solutions on the horizon that can make food work fair for all.
Workers are Getting the Short End of the Stick
Some of the most popular software apps, including Uber (transportation), Airbnb (hospitality), and TaskRabbit (general labor), bring workers providing goods and services together with customers and depend on a sharing, or peer, economy business model. Food-delivery companies working in this sector—like UberEats, Grubhub, DoorDash, and Seamless—have attracted millions of customers, thousands of contractors, and billions of dollars in investment over the last 10 years. But the changes these companies have brought to the industry, and particularly to those tasked with preparing or delivering the food, offer a glimpse at potential troubles ahead.
The gig economy is less likely to provide workers with salaries, benefits, or a consistent schedule. And it also often frees employers from any obligation to provide year-round income for their employees, and leaves workers’ livelihood in the hands of the customer.
In 2016, for example, the grocery delivery service Instacart removed the tipping feature from its app and replaced it with a flat “service fee”—a change that meant lower overall income for many contractors. In the face of pushback from independent contractors, Instacart relented and replaced the original tip feature—but buried the new feature so deep within the app’s user interface that workers began distributing flyers to customers to explain how to tip.
In another example, in April 2017, employees at the California-based restaurant delivery service DoorDash successfully sued the company for illegally classifying its delivery staff as independent contractors. The court found that the contractor designation used by the company didn’t suitably capture the role its delivery workers play. By classifying workers as independent contractors, DoorDash circumvented laws that cover federally mandated overtime and minimum wage rates, which in some instances led to lower pay for more work.
As part of the $5 million settlement, DoorDash has agreed to make changes to how the contractors are classified and treated, while still retaining the right to use the contractor designation. As part of the settlement, delivery staff are still classified the same with a few more benefits and protections.
Sometimes, the risks to workers extend beyond unfair pay to a lack of workplace safety, as in the case of meal-kit maker Blue Apron. Since its founding in 2012, Blue Apron has proven wildly popular across the United States—but the demands of producing high-quality meal packages at a profit has led to some safety concerns for Blue Apron’s staff.
A 2016 inspection of the company’s California food packaging facility turned up five worker safety violations. One of those violations—a failure to offer emergency showers near the forklift battery charging station—could have potentially resulted in “death or serious physical harm,” according to the state inspector.
Moreover, during the approximately three-year period after its Richmond, California warehouse opened, Blue Apron received nine violations and proposed penalties totaling $11,695 for unsafe conditions, and four arrests for violence, or threats of it, on the premises. Unfortunately, conditions at Blue Apron’s facilities resonate all too well with the challenges food workers face when working with tech companies.
These sorts of workplace issues are mirrored in other parts of the tech sector as well. A recent article detailing dangerous workplace conditions at Tesla’s car manufacturing plant in Fremont, California, found that ambulances have been called to the plant more than 100 times since 2014 due to workers experiencing fainting spells, dizziness, seizures, abnormal breathing, and chest pains. A Tesla factory worker was quoted saying, “everything feels like the future but us,” a sentiment that reflects the experience of so many of the workers doing manual labor and service tasks for tech companies.
Arbitrary and unfair practices like these have led some workers to demand fairer practices. In 2016, delivery staff for UberEats and the restaurant delivery service Foodora in Italy and the U.K. took to the streets to protest both their treatment and working conditions as contractors. Fair wages—an issue across the industry—were a particular point of contention in these two actions.
Effect of Automation on Food Industry Jobs
Large-scale automation efforts are already underway across the country as McDonald’s and Wendy’s plan to install self-serve kiosks at more than 5,000 locations around the country. While McDonald’s has said that it has no current plans to fully replace workers, Wendy’s has made no such pledge. And it’s hard to imagine that the lure of higher profits won’t eventually become a factor for both companies as they determine how much to expand the use of automated systems.
So far, the fast food industry has said very little about what all these changes mean for front line workers. Similarly, labor groups have continued to focus their energy on “Fight for $15,” while largely setting aside concerns about automation. Both sides are likely considering the best way forward—but the pace of technology may force the issue sooner rather than later.
Amazon’s recent purchase of Whole Foods Market is likely to make automation a more pressing issue on the grocery retail front as well. The new store model called Amazon Go has billed itself as the first grocery store completely without cashiers, and Amazon is already experimenting with new ways to remove workers from the equation. It’s also hard to imagine that Amazon won’t use Whole Foods as a laboratory for testing out similar ways to reduce labor costs.
Five Recommendations to Protect Workers
Based on the impact technology has already had on food workers, forward-thinking governments and corporations should get ahead of the curve to offset the harmful impacts that technology could have on the people behind our food.
1. Corporate Profit-Sharing
One ongoing complaint from workers in the gig economy is the way that platform companies change pay and performance expectations to maximize the companies’ profits—and which often minimize workers’ income. A food-delivery service, for instance, will use multiple pay incentives (such as surge pricing in combination with guaranteed hourly rates, something that Uber has implemented among some of its drivers) to encourage workers to be available during times of heavy demand. This move flies in the face of the promise of flexible work hours if workers want to make anything close to a reasonable wage.
Similarly, platform companies have been accused of arbitrarily changing performance expectations for workers, and using those shifting definitions as a way to deactivate a user’s account. In the case of Instacart, the company used this tactic to retaliate against its shopper-contractors who were protesting changes to their pay structure and to discourage other shoppers from joining the effort.
Shifting to a profit-sharing model between these companies and the workers they depend on would provide contractors with more income, more incentive to offer high-quality performance, encourage building relationships with customers and platform companies alike, and offer a way to address these types of predatory practices.
2. Shorter Work Weeks
If companies are adequately taxed on the productivity gains made possible by automation, there may be significant opportunities to reduce the number of hours employees give over to work each week. A portion of the additional revenue that comes with lower labor costs and greater work efficiencies could also be used to benefit current workers by maintaining, and in some cases increasing, their income over time.
3. Protect Workers with Policy
The question of who benefits from developments in technology is ultimately a political one. Restoring basic worker protections; enforcing worker safety, wage regulation, and anti-trust laws; and leveling the political playing field to limit the influence of corporations and the wealthy won’t be easy, but it’s necessary. An example of this kind of policy action is New York City’s recent “Fair Workweek” legislation, which set rules to ensure predictable schedules and paychecks for retail and fast-food workers, including regulating the practice of “clopenings,” or scheduling workers on consecutive closing, then opening, shifts—a practice that has increased as companies adopt automated scheduling systems. In 2016, San Francisco enacted similar rules under the name “Retail Workers Bill of Rights.”
4. Conditional Cash Transfers (CCT)
These programs provide financial support to jobless workers under the condition that they participate in community activities, volunteerism, or engage in trainings for higher-skill, technical jobs where possible. This approach has been put to work in New York City and Memphis, where the Family Rewards 2.0 program has used a CCT model to provide incentives (“rewards”) to families for completing activities related to children’s education, family preventive healthcare, and adults’ work or training.
5. Universal Basic Income (UBI)
UBI programs provide unconditional monthly cash payments from the state budget to all of its citizens, helping buffer workers from the loss of jobs that might result from automation. The concept has garnered support from across the political spectrum and is seen as one of the most direct ways to address the unemployment crisis that could arise from high levels automation. UBI pilots have been implemented around the world, for instance tech startup-funder Y Combinator’s 2016 launch of a five-year UBI pilot in Oakland, California.
None of these options is perfect, and most come with downsides. But considering the major disruptions that technology has brought to the labor market already, it’s important to consider similarly disruptive solutions to help protect workers from the widespread disruption these changes will likely bring as they spread across the economy.
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