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Foodora couriers win right to join a union in an ‘historic precedent’ for gig economy workers

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In a forceful decision challenging the underpinnings of the gig economy, couriers for the app-based food delivery company Foodora have won the right to join a union.

The Ontario Labour Relations Board decision issued Tuesday opens the door for couriers, who mobilized around low wages and safety issues on the job, to become the first app-based workforce in Canada to unionize.

Courier Ivan Ostos, who helped lead the union drive, said he was “jubilant.”

“This is going to be used as a precedent for every other case in Ontario and for that matter elsewhere in Canada, so it’s a big deal.”

Foodora couriers participated in a vote to join the Canadian Union of Postal Workers in August. The results of the vote are still sealed and will not be revealed until further legal issues between the company and union are resolved.

But Tuesday’s decision clears one of the biggest hurdles to app-based couriers unionizing: it recognizes their legal right to actually do so.

Foodora had challenged the union vote by arguing that the couriers were independent contractors who cannot unionize and are not protected by provincial labour laws.

In Ontario, independent contractors are defined as self-employed entrepreneurs who are not disciplined or controlled by a boss. Most app-based companies across North America, including Foodora, classify workers this way.

But in a 44-page decision, labour board vice-chair Matthew Wilson ruled that couriers were “a mere cog in the wheel that is powered by Foodora.”

“In a very real sense, the couriers work for Foodora, and not themselves,” Tuesday’s decision said.

The decision accepts CUPW’s position that couriers are dependent contractors — a middle ground between traditional employees and independent contractors that gives workers the right to join a union.

The board pointed to a long list of contributing factors, including the fact that Foodora maintains a “Strike Log” that monitors couriers’ behaviour and job performance. Couriers were sometimes disciplined by Foodora or even “de-activated” from the app for poor performance.

The board also found that couriers have little opportunity to act as true entrepreneurs. Their pay rates are set by Foodora and they are not given the opportunity to negotiate their contract with the company. Their access to shifts is also controlled by Foodora. Couriers also cannot develop their own relationships with restaurants or customers, or sub-contract work to other couriers.

Foodora argued that its couriers were independent entrepreneurs in part because they could freely work for competitors like Uber Eats. The board rejected the argument.

“This is not entrepreneurial activity,” the board ruled. “It is hard work.”

“The fact that couriers had other sources of income is not necessarily indicative of economic independence,” the decision added. “It is not uncommon for individuals to have multiple part-time jobs.”

Foodora, a multinational company headquartered in Berlin, said it inherited the independent contractor model from the Toronto-based food delivery startup it bought and took over in 2015.

The company’s managing director David Albert said Foodora was now reviewing the decision and “assessing how we’ll move forward with the couriers in Toronto and Mississauga.”

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“We respect the board’s process under the Labour Relations Act,” he added. “We’re continuing to focus on Foodora’s growth, and to operate in the best interest of our three key stakeholders: customers, vendor partners and couriers. Until the voter list is confirmed, and the unionization application votes are counted, we cannot speculate at this time as to whether the vote will sway in favour of CUPW and what this might mean for our business moving forward. Right now, it’s business as usual.”

The labour board’s decision said that the use of new app-based technology did not change the level of control Foodora wields over couriers — in fact, the decision found that the app was a key part of that control.

“The software developed and owned by Foodora in the form of an App is the lynchpin in the process to deliver food,” the decision says “It is the single most important part of the delivery process and is a tool owned and controlled by Foodora.”

The board acknowledged that despite some documented instances of couriers being disciplined or terminated, Foodora rarely interacted with its couriers’ daily work. But the decision ruled this was ultimately irrelevant because the company had the power to exercise control if it chose to.

“The focus is not on the frequency of exercising control. Rather, it is about the right and ability of the company to control how the work is performed.”

So far, just one other app-based workforce in North America has successfully unionized. In January, workers at a grocery store in a Chicago suburb for the online delivery platform Instacart voted to join the United Food and Commercial Workers (UFCW) union.

The Foodora proceedings have thrown a spotlight on the app-based economy more broadly in Canada; earlier this year, drivers for Uber Black followed in couriers’ footsteps and filed an application to join the UFCW in Toronto.

“This decision shows that the tide is turning towards justice for thousands of gig workers in Ontario and soon these workers will have the right to their union,” said CUPW president Jan Simpson.

“CUPW is proud to be part of challenging the big app-based employers, and reshaping the future of work in favour of workers’ rights, safety and respect.”

But the labour board’s decision made clear that while app-based technology is novel, the nature of the work is not.

“This is the board’s first decision with respect to workers in what has been described by the parties and the media as ‘the gig economy,’” the decision reads. “However the services performed by Foodora couriers are nothing new.”

Ryan White, the lawyer with Toronto-based firm Cavalluzzo who argued on behalf of Foodora couriers said the board’s decision “vindicates the union, which has known all along that Foodora controls the way that couriers work too much for them to be classified independent contractors.”

“This decision sets a historic precedent for precarious workers,” he said.

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Denver’s Gig Economy Workers Share Their Stories

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Photo by Victor Xok on Unsplash

Caught between the new coronavirus and earning a living, the Mile High City’s independent workforce opens up about how Lyft, Amazon, Instacart, and others are supporting them (or not) during the COVID-19 pandemic.

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In many ways, gig economy workers have become the unsung heroes of the COVID-19 crisis, often facing frontline exposure to the virus without the protections—including health and unemployment benefits—provided to traditional employees. Some companies have made efforts to support workers during this time, such as offering two weeks of sick pay for those diagnosed with the novel coronavirus. But even workers ordered to stay at home by local governments have experienced challenges getting the companies approve their claims.

Last week, which began with Instacart and Amazon employees and contractors striking for higher pay and better safety measures, several Denver gig workers talked with 5280 about their experiences during the novel coronavirus pandemic.

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*Full names withheld at the request of the subjects. 

Nate*: Instacart

People are desperate, but that’s good though. Customers, they feel so bad for us, so a lot of the time they’re tipping us like crazy high. I could work seven days a week nonstop and make a ton of money, but I don’t want to do that because there’s a chance that I could be infected at anytime. Amazon and Whole Foods, their workers are going on strike because they don’t feel safe in these conditions.

The thing is, the last time people tried to strike against Instacart, it backfired on us. We used to have this quality bonus—every time a customer gave you five stars you got an extra $3 on your order. So it was a big incentive for us to give really good service. But when that strike happened, they completely removed it. They said they were going to implement new ways for incentivizing us with promotions, but that didn’t happen until—honestly until the coronavirus started to come into effect. Promotions are like, if you work from noon to 5 p.m., every delivery you do in that span you get an extra $3 per delivery. They don’t care. It’s that simple. They know they can exploit us and there’s nothing we can do about it.

Sherrie Salazar: Lyft, Instacart, Postmates

I have always done the express rental program through Lyft and Hertz, but the rental is $250 a week, and I haven’t been making that the last two weeks. Ridership is down. Grocery shopping and food deliveries are through the roof, which is what’s saving us gig workers right now. I just started with Instacart and Postmates during the pandemic. Postmates isn’t a big tipper. Instacart is. My Postmates stuff has all been food delivery; I think maybe customers think they’re paying too much for their food so they’re not going to tip the driver. It’s like, we’re out here making sure you get it. And it’s still warm—or cold, or whatever it’s supposed to be.

I’m a high-risk [patient] if I were to get COVID-19. My heart functions at 74 percent. I have asthma. I have kidney disease. I’m pre-diabetic. I’m still doing my job. I’m being safe about it.

JL*: Lyft

I’m pretty sure I had or still have COVID-19, and I self-isolated the moment I started having symptoms. My children have had it as well. I immediately contacted Lyft to let them know that I would be returning my rental and isolating. I then contacted them to see what relief would be available to me. They indicated that without a positive test result, I get no help. But no one can get tested in Colorado unless they are admitted to the hospital or meet the criteria for high risk. I contacted my primary care physician, and they indicated they would not issue a request for a test because I do not meet the criteria.

I’m convinced Lyft knows that not many people can get tested so they made that a requirement for helping drivers, thus limiting their need to help drivers. This is a crock of shit. I have been driving full-time for Lyft for a year with over 3,900 rides. I would estimate Lyft has made in excess of $40,000 from me. Still, they can’t help me even though I did the right thing and stopped driving. 

Steve*: Amazon Flex

Amazon has said it’s hiring 100,000 workers both in warehouses and as flex drivers. I guess my perception is that they’re trying to bring in a lot of new drivers to increase the pool of people who are picking from available slots so Amazon can avoid surge pricing. My personal opinion is everything Amazon is going to do is going to be in its favor—which is going to decrease the amount it has to pay to do deliveries.

I can certainly understand why people are [striking]: It’s the low pay. It’s all these packages that are coming in from all different locations and you just don’t know if the virus is on any of them. How long can it survive on cardboard packages? With this coronavirus, I’m hoping it does compel some of these companies that are providing gig work to provide better [personal protective equipment]—not only for the drivers’ protection but also for the customers’ protection as well

Stephanie Ramsey: Uber, Lyft, Instacart

I’m not someone who has a savings account that I can fall back on. I’m grateful that I at least have something, because if I didn’t have [Instacart] I would be in a bad position. But yeah, I certainly feel forced into it. There’s not another option, really.

I don’t want this to wreck years of my life financially. I don’t want to get buried. I could stay at home and probably call all of the billing companies, and they would put it off for a little while but—yeah, I’d rather risk going out and getting sick than have to worry about my finances. Definitely.

At this point in time, my tips have been 50 percent and more of my overall earnings. If I was strictly relying on what Instacart is willing to pay me, this would not be worth it. It’s only worth it because there have been a lot of generous people.

Interviews have been edited for length and clarity.

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WEBINAR: Demystifying Unemployment for 1099 and Gig Workers

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I’m a single owner of an LLC – should I apply for the Paycheck Protection Program, unemployment benefits, or both? I haven’t been eligible for unemployment in the past, but I think I might be now – how does that work?

The Colorado Small Business Development Center is pleased to announce a webinar tomorrow, Friday April 10, aimed at independent contractors, online platform workers, contract firm workers, on-call workers and temporary workers.

Get your questions answered about who should apply for unemployment, how to do it, when to expect funds, and more during this webinar hosted by the Colorado Department of Labor and Employment.

When: Friday April 10, at 10am

Register for this Online Zoom Meeting at https://zoom.us/webinar/register/WN_osmdiJb4SeSqh6S8rKCs0A

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Ask SAM: What the heck are “gig workers”? | Ask SAM

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Q: What the heck are “gig workers”? I keep seeing that phrase turn up.

J.W.

Answer: That is a phrase for freelance and contract workers who work short gigs, such as Uber and Lyft drivers, temporary workers especially ones hired for a specific task. According to Investopedia, a business news website, “the gig economy is based on flexible, temporary or freelance jobs, often involving connecting with clients or customers through an online platform.”

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