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In Wake Of Prop 22, Albertsons Shifting In-House Delivery Jobs To Gig Work

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One of the largest grocery chains in the U.S. has decided to end much of its in-house delivery service, outsourcing the work to third-party companies like DoorDash that rely on independent contractors to drop off food to customers on the cheap.

Unions representing workers at Albertsons say the chain’s decision will end up degrading good delivery jobs by putting the work on a “gig” model. Independent contractors tend to bear many of the costs of employment, providing their own vehicles and covering wear and tear, while forgoing traditional work benefits like health coverage and a retirement fund.

Albertsons told HuffPost that DoorDash was one of several third-party companies that the grocer would shift the work toward, “to compete in the growing home delivery market more effectively.” The company said it’s e-commerce business has exploded during the pandemic.

“While we know that this move will help us create a more efficient operation, it wasn’t a decision we made lightly or without a great deal of consideration,” an Albertsons spokesperson said in an email.

While Albertsons did not cite the new California law known as Proposition 22 for the decision, several major California markets will be impacted by the policy change. Prop 22 makes it easier for companies like DoorDash to classify their drivers as independent contractors.

The change is scheduled to take effect on Feb. 27.

The decision by Albertsons was first reported by KnockLA, which said that Albertsons chains Vons and Pavilions would be firing union workers. But Albertsons said it would be offering the affected drivers other positions within stores and warehouses, and both Albertsons and union representatives said jobs under union contracts would not be impacted by the change.

For all our nonunion drivers who can’t bargain, it’s really messed up.
Jim Araby, UFCW Western States Council

The United Food and Commercial Workers union condemned the move by Albertsons. Jim Araby, director of UFCW’s Western States Council, said his union represents around 250 drivers in California’s Bay Area who work for Albertsons subsidiary Safeway. Those drivers organized about two years ago and are in the process of securing their first contract; their jobs will not change as a result of the new arrangement at Albertsons.

Araby said third-party delivery services appeal to companies like Albertsons because another company has to worry about the fleet and the logistics of employment: “You don’t have to maintain the truck, you don’t have to worry about accidents and all that goes with that.” And the third-party companies ultimately don’t have to worry about much of that either, “because everyone is using their own cars.”

According to Araby, both UFCW and the Teamsters represent in-house drivers at Albertsons, but only a small share of the overall workforce. He said even though union drivers would not be impacted by the change, he believes grocers’ increasing reliance on companies like DoorDash will imperil more in-house jobs over time.

An Albertsons store in Buellton, California.



An Albertsons store in Buellton, California.

“And for all our nonunion drivers who can’t bargain, it’s really messed up,” Araby said. “I think it’s an example of corporate greed.”

He said his union is considering filing a grievance, believing the change may run afoul of provisions it has bargained related to subcontracting.

Albertsons declined to say how many positions would ultimately be eliminated, but that it “plan[s] to offer positions to each impacted associate.” Those who don’t accept the transfer “may be” eligible for severance pay: “We will work with them on their individual situation.”

The move comes against the backdrop of Prop 22. In 2019, California passed a law known as Assembly Bill 5 making it harder for gig companies to classify workers as independent contractors rather than employees. Prop 22, which voters passed in November, excluded app-based drivers from the earlier law, protecting the contractor system at companies like Uber, Lyft and DoorDash.

Those companies spent heavily to get the measure passed. Unions and their allies on the left viewed the success of Prop 22 as a major setback in their fight with Silicon Valley and the growth of the contract workforce.

Adan Alvarez, a spokesperson for Teamsters Local 396, called the decision by Albertsons a natural response to Prop 22, now that the gig model is secure in the state among food delivery drivers. His union represents employees working out of Albertsons warehouses in Southern California. Although no Teamsters will lose their jobs, he said he expects the new jobs to be less stable than the ones being eliminated.

“This is an example of what we predicted. It’s giving companies an open door to chip away at employee-based jobs,” Alvarez said. “These [Albertsons] employees, they weren’t unionized. But they were still employees with wages and benefits.”



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As Congress scrutinizes gig worker rules, small-business owners need to know the basics – The Philadelphia Inquirer

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Uber’s UK ruling could have implications for gig economy startups

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Former Uber drivers Yaseen Aslam and James Farrar first brought their case against Uber in 2016
(Carl Court/Getty Images)

The UK’s Supreme Court has rejected Uber‘s appeal against an earlier ruling that said its drivers must be classified as workers, a result that may have a significant impact on other gig economy companies.

The decision—which cannot be appealed—means thousands of UK Uber drivers cannot qualify as being self-employed, entitling them to both minimum wage and holiday pay. The ridehailing company could now face paying substantial compensation to its drivers.

The ruling, which criticized Uber for sidestepping UK labor laws to withhold benefits, could influence other battles between gig workers and the companies that hire them. Earlier this month, the Independent Workers’ Union of Great Britain appealed against a court decision preventing riders for food delivery startup Deliveroo from engaging in collective bargaining due to their self-employed status. Deliveroo, which is backed by investors including Durable Capital Partners and Amazon, is looking to go public this year.

“Employees should benefit from improved rights; however, employers are likely to face increased costs of labor and disruption to their business models, which have proven to achieve rapid scale with gig workers,” said PitchBook analyst Nalin Patel. “The ruling may also now set a precedent in the UK and force other gig economy startups that utilize the self-employed contractor model to rethink how they operate in the region moving forward.”

Former Uber drivers James Farrar and Yaseen Aslam originally won their tribunal against Uber in 2016. Uber appealed the decision, but it was upheld in 2017, and again in 2018 by the High Court.

“This ruling will fundamentally re-order the gig economy and bring an end to rife exploitation of workers by means of algorithmic and contract trickery,” said Farrar, who is also a general secretary with the App Drivers and Couriers Union. “Uber drivers are cruelly sold a false dream of endless flexibility and entrepreneurial freedom.”

In a statement, Uber’s regional general manager for Northern and Eastern Europe, Jamie Heywood,  said the court decision was focused on a “small number of drivers” who used the app in 2016. Since then, he said the company had made changes to its business,  providing free insurance in case of sickness or injury. He added: “We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see.”

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The future is now for gig-based entrepreneurship – San Gabriel Valley Tribune

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With Californian Kamala Harris as vice president, it’s clear the new Biden administration is taking its cues from the once-Golden State on labor policy.

In one of its first acts in office, the Biden Administration placed a regulatory freeze on a Department of Labor regulation enacted in the waning days of the prior administration relating to independent contractors.  The rule, according to labor and employment law firm Fisher Phillips, “aims to make it easier for businesses to classify workers as independent contractors.”

It’s unlikely this rule to give more workers freedom to be their own boss and set their own schedules will survive in a Biden administration that was heavily reliant upon labor unions for money and manpower to win the 2020 campaign.

Meanwhile, House Democrats recently re-introduced the controversial PRO Act in Congress, which “seeks to reduce the use of the independent contractor classification by companies such as Uber,” according to CNBC.

Both of these efforts followed the lead of California’s liberal legislative majority, which two years ago enacted the controversial Assembly Bill 5 to severely restrict the ability of Californians to work as independent contractors.  Their goal is to increase union membership and dues and force people to work in traditional, 9-to-5, union jobs that are relics of the past.

Doubling down on AB 5-type restrictions at the national level – which may be the Biden administration’s goal with the nomination of Julie Su, California’s chief AB 5 enforcer, as deputy Secretary of Labor – would be a tremendous mistake.  It would threaten innovation and hurt the ability of Americans who have lost their jobs to put food on the table during a global pandemic.

As documented in the new Pacific Research Institute study, “The Small Business Gig,” Americans are increasingly working in the gig economy.  They don’t want government – whether in Sacramento or Washington, DC – dictating how they can earn a living.

A 2018 Gallup survey found that 36 percent of U.S. workers have some sort of a gig worker arrangement.  Whether renting out an extra room to earn cash to pay the mortgage or using an app to earn a living on an alternate schedule, the gig economy is increasing opportunities for Americans to become entrepreneurs, while providing customers with lower cost services.

Many in California state government see the gig economy as exploitative and disruptive.  But data from the ADP Research Institute shows that 70 percent of gig workers are independent workers by choice.  Gig Economy Data Hub research found that more than two-thirds of gig economy workers are satisfied with their current work arrangement.

Government shouldn’t pick winners and losers in the economy.  New restrictions on the gig economy, like those proposed in Congress, will limit people’s freedom to become entrepreneurs while institutionalizing the old way of doing work.

Instead of adopting regulations at the federal level that 58 percent of Californians – Democrats, Republicans, and independents alike – rejected when they passed Proposition 22 in November, the Biden administration and Congress should take the opposite approach and enact market-based policies to encourage entrepreneurship and innovation.

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