Uber is going through its second wave of layoffs, shedding another 3000 workers after it cut 3700 employees earlier in May Photo / AP
Uber is going through its second wave of layoffs, shedding another 3000 workers after it cut 3700 employees earlier in May Photo / AP
COMMENT The coronavirus pandemic has turned online delivery companies from convenience to essential services, enabling retailers, food outlets and other businesses to continue to serve customers who can't visit physical stores to pick up purchases.
Getting food especially but also other goods delivered enables "shopping distancing", that is, fewer people having to crowd together and risk getting infected that way.
Those are real and important benefits, so clearly the job is important. Would you want to work as a courier or delivery person though, if you had the choice?
There are always exceptions to the rule, but being a lowly paid delivery person working stupid hours while becoming stressed to bits isn't a life most of us would want, even if it helps the economy tick over.
By the way, that's if you're lucky enough to be an employee rather than a gig economy contractor who has to foot capital and operational expenditure without receiving basic benefits like sick pay and holiday leave.
The Covid-19 pandemic has shown with all clarity just how bad that is for society, to have vulnerable workers being screwed over by tech bro computer algorithms running in foreign data centres.
It is a pretty amazing achievement really, that the gig economy companies managed to bend government regulations and opted out of societal responsibility. They did it and now the chickens are coming home to roost as workers are being left without support during pandemic lockdowns.
Not that things are going swimmingly in the pandemic for the tech driven gig economy companies. As of writing, Uber is going through its second wave of layoffs, shedding another 3000 workers after it cut 3700 employees earlier in May as it lost US$2.8 billion the first quarter of the year.
Uber Eats is where growth is at for Uber, despite losing colossal amounts of money
Offices overseas will be closed, and Uber Eats will stop operating in seven countries.
Nevertheless, Uber Eats is where growth is at for Uber, which despite losing colossal amounts of money has managed to find enough wherewithal to put in a bid for Grubhub, another food delivery platform that's been around since 2004.
Grubhub was in the news in the US recently. Customers who tried to bypass online delivery platforms by calling restaurants and cafes directly to order still ended up generating Grubhub fees.
Order a coffee, and the outlet is stung by a US$6.42 charge because Grubhub generates a unique phone number for each food place on its platform, one that redirects to the restaurants and the cafes.
Food outlets can't list their own numbers on Grubhub and the redirect number shows up in Google search results, and on Yelp. Customers calling the number aren't told it goes via Grubhub which earns a commission for each order.
Neat little earner but to the surprise of nobody, Grubhub is now under fire for that tactic.
Elsewhere, restaurant owners have complained for a while now that online delivery company Doordash that's bigger than Uber Eats in the US had hijacked their Google business pages, adding fee earning "Order" links to these.
Get this: Doordash did it despite the restaurants not delivering food or asking to be listed.
Then there's the whole running at giant losses business model. Burn through millions of dollars of investor capital in a death race against competitors that are also losing money, with the winner supposedly taking it all, a dominant market position.
Uber Eats for example saw a massive revenue hike in the last quarter of 2019, hitting US$734 million. That's great, except it still meant a US$461 million loss in the same quarter.
Despite the enormous losses, investor money keeps on flowing in.
I will leave it to the reader to think about which other activity is based on the notion that it's fine to "invest" a dollar even if it only brings in a return of merely 50-62 cents.
It is almost as if the enormous amounts of money going into those companies is deemed worthless and getting half or a third of its nominal value is better than nothing.
Overseas third party delivery giants however bring with them dangerous fish hooks as part of their exploitative business model. We need to think long and hard if we want to allow them here.
Because if we do, they have the enormous capital and sleek, scalable Silicon Valley tech coupled with zero ethics and morals to take out local competitors and establish themselves as monopolist rentiers bleeding local businesses weakened by the pandemic dry.
