| One month ago, The Gig Economy Project posed the question: 'Is the party over for food and grocery delivery platforms?' The inflation crisis combined with the easing of the pandemic has proven to be a toxic mix for these companies. Fuelled by venture capital funding, many investors are now taking their money out of tech in in general, and delivery apps in particular. The signs were not good, and one month later, at least for grocery delivery, the evidence of foundering is now all too clear. On Tuesday [24 May], Gorillas, the Berlin based super-fast grocery delivery platform which only launched in 2020 and already operates in nine countries, announced that it was axing half of its employees at its Berlin HQ, the loss of around 320 jobs, and would also be pulling out of Italy, Spain, Belgium and Denmark entirely, just a year after entering those markets (no figure has been given for these job losses). Martin Bechert, lawyer for the Gorillas Workers Collective, has said that workers at the Berlin 'dark stores' have also been fired, without consultation with the Works' Council. Gorillas broke a European record for the speed with which it reached 'Unicorn' status, but it is said to be burning through €60-90 million a month. “The investors had a conversation with Kagan [Sumer, the CEO] where they said, you need to get your stuff in order or we simply won’t invest anymore,” a former employee told 'Sifted'. On Wednesday, Getir, the Turkish grocery delivery platform which also expanded across Europe and North America over the past year, announced that it too would be sacking workers, with a 14% cut to its global workforce, equivalent of around 4,500 jobs, due to the "increase in inflation and the deterioration of the macroeconomic outlook". Getir has raised so much venture capital, including as late as March of this year, that it has been valued at over €10 billion, but already economic realities are starting to bite. Bloomberg has reported the company is on course to make a €1 billion loss this year. However, the firm said it would not be exiting any of the nine markets it currently operates in. To round it off, Zapp, another grocery delivery start-up based in London, also announced on Wednesday that it would be cutting 10% of its staff, around 200-300 employees. The company had already closed operations in Cambridge and Bristol, and now are also shutting down its Manchester 'dark stores', leaving London as the only city it operates in. "The current macroeconomic climate has become incredibly challenging, with very little visibility of when things will improve,” a spokesperson said.
That's at least 5,000 workers on the scrapheap, from three grocery delivery companies, and all just this week! It is of course easy to blame the "macroeconomic climate" when deciding to fire workers, but the CEOs of these firms new their growth before profits strategy was incredibly risky. And it's not just the start-up's which deserve the blame, it's the venture capitalists who recklessly plunged cash into these companies, putting local newsagents out of business on a gamble that home grocery delivery would outlast the pandemic crisis. Financialised capitalism is a reckless game with other people's livelihoods. Ben Wray, Gig Economy Project co-ordinator |
|
Gig Economy news round-up |
|
- UBER AGREES TAXI DEAL IN ITALY: The US ridehail giant Uber is continuing to roll-out its new approach to the taxi trade, by agreeing a deal with taxi operators to use the company's app in Italy. The agreement with Italy's largest taxi operator, IT Taxi, follows similar agreements in the US, Spain and Germany, and is an attempt to boost the number of available drivers for the company, as rising fuel prices deters workers from driving professionally. IT Taxi has 12,000 drivers, and the app will now be available in 80 new Italian cities. Prior to the deal, Uber only operated in eight Italian cities and just offered its Uber Black service, due to Italian regulations banning the use of cars for private hire without a commercial license. "This is a truly historic deal in one of our most strategically important markets globally," Uber CEO Dara Khosrowshahi said. Read more here.
- 1 YEAR AFTER HISTORIC DUTCH COURT WIN, DELIVEROO RIDERS ARE STILL SELF-EMPLOYED: Despite 285 Deliveroo riders winning a Supreme Court case for their employment status in the Netherlands last year, the majority of them are still not employed. The case was pursued by the FNV union, and the victory meant the riders would be covered by the collective bargaining agreement for professional goods transport, but the union admits that many of the 285 riders have dropped out of the group while other Deliveroo riders have not come forward to claim their rights. A variety of explanations have been offered for this by Dutch platform economy researcher Niels Van Doorn, who said that going to a court to enforce a permanent court could be daunting, especially when many riders are migrants for whom Dutch is a second language. Also, the turnover rate in the sector is very high. Others may not be aware of their rights, while others may prefer to remain self-employed. Read more here.
- LONDON PROTEST FOR END TO "HARASSMENT OF BAME COURIERS": Food delivery couriers were supported by the local community of Dalston, north London, as they protested outside the local council's offices to demand an end to the "harassment of BAME couriers". The IWGB-union organised protest on Wednesday [25 May] came just a week after an attempted immigration raid on food delivery couriers in Dalston, which the IWGB say is part of a state-led gentrification effort to force riders out of Ashwin street, where they congregate to wait for food deliveries. Riders were encouraged to "mask-up" ahead of the protest in case police officers once again attempted to detain, and possibly deport, riders without official papers. The protestors demanded that "police stop targeting them for immigration raids under the guise of routine vehicle checks, and that the council stop the excessive issuing of Anti-Social Behaviour notices to couriers". Read more here.
- 'FOREIGN LANGUAGE TEACHERS MOVEMENT' ESTABLISHED IN SPAIN: A movement for foreign language teachers has been set-up in Spain to improve workers' rights. Many foreign language teachers now work through online digital platforms, like EnglishFirst.com and VIPKid, as e-learning has boomed. These cloud workers operate on a gig economy basis, being paid per class. Other foreign language teachers operate through Spanish academies, usually specialised for teaching English. In explaining the new movement, one anonymous foreign language teacher who works in a Spanish academy said that they "have the same gig worker conditions as Glovo riders, meaning we use our own pedagogy, resources, laptops, etc", cannot take sick time off and have suffered non-payment for their services. Read more here.
- DELIVERY HERO CEO DEFENDS GIG ECONOMY AT DAVOS: Niklas Östberg, CEO of German multinational Delivery Hero, which hires a million-plus food delivery couriers worldwide on an independent contractor basis through its network of food delivery companies, has defended the gig work model at the World Economic Forum in Davos this week. Östberg said he backed legislation which provided social security and other benefits, but he told the business elites that employment would be a mistake as the majority of couriers do not want it. “If you have an employment relationship, you have to exactly know when they're working," he added. "The good part is that when they are going to make the most money is aligned with us, because that's when we need them the most.” Delivery Hero's food delivery platforms include Glovo, FoodPanda and Yemeksepeti. Sharan Burrow, general secretary of the International Trade Union Confederation, also spoke at the event, and said the gig model was "not humane". The event was also addressed by Karien van Gennip, Dutch minister of social affairs and employment, who said that "most of those jobs actually, when you add it all up, don't pay enough for people to make a decent life.” Read more here.
Have we missed important news on the gig economy in Europe this week? E-mail Ben at [email protected] to help us improve our news round-up. |
|
|
| |
|
|
