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After Prop. 22, Albertsons turns home delivery to gig work

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Those who warned that California’s anti-labor Proposition 22 would hasten the destruction of good jobs and the rise of gig work have a new data point to cite, courtesy of the Albertsons grocery empire.

As of the end of February, hundreds of home delivery drivers for Vons, Pavilions and other stores owned by the Boise, Idaho, chain will no longer be employed by Albertsons.

Their work will be outsourced to the gig delivery company DoorDash, which has made a nationwide deal to take over the service.

This is what we predicted would happen with Proposition 22. We could see it coming 100 miles away.

Steve Smith, California Labor Federation

Albertsons says the transition is national in scope and has nothing to do with California’s Proposition 22.

But make no mistake. Proposition 22, which passed in November with a $206-million war chest from ride-hailing and delivery companies, made this change almost inevitable in California.

With contributions totaling $52.1 million, DoorDash was the second-largest backer of the Proposition 22 campaign, just behind Uber, which put up $59.2 million.

Proposition 22 makes it virtually impossible for regulators to scrutinize wages and hours and other working conditions at the gig companies. Without a change in federal law, their workers will be barred from organizing a union. They’re not entitled to unemployment insurance or workers’ compensation.

“This is what we predicted would happen with Proposition 22,” says Steve Smith, spokesman for the California Labor Federation. “We could see it coming 100 miles away.”

Proposition 22 was designed to exempt the ride-hailing and delivery companies from the state’s far-reaching labor law, AB 5, which made it harder for them to designate their workers as independent contractors rather than employees, who are entitled to significant workplace benefits.

“This is why we did AB 5 and what we warned people about with Prop. 22,” says Assemblywoman Lorena Gonzalez (D-San Diego), who sponsored the labor law. “Left to having no rules, corporations whose only concern is their bottom line will replace good middle-class jobs with independent contractors who don’t have benefits like a minimum wage and healthcare that we expect.”

The affected workers make deliveries from local stores to residential customers for a nominal fee, using company-owned refrigerated trucks about the dimensions of a small delivery van. They were informed during December that their jobs would be eliminated as of Feb. 27.

Albertsons says in an emailed statement that it “made the strategic decision to discontinue using our own home delivery fleet across a variety of market areas and states” in early December. It says its aim was to “compete in the growing home delivery market more effectively” by transitioning to “third-party logistics providers who specialize in that service.”

A couple of curious things about that.

Albertsons says that “since the COVID-19 outbreak, our eCommerce business has risen to new heights and has become more strategically important to Albertsons Companies. Our goal is to truly make eCommerce a competitive advantage.”

If that’s truly the case, why would the company give up control of its relationship with its delivery customers to a third party, rather than keeping this “strategically important” service in its own hands?

Delivery customers are likely to be among the best customers, spending the most money and translating their appreciation for Vons and Pavilions service into more patronage.

Instead, Albertsons will cede control of this service to an outside vendor. DoorDash, not Albertsons, will enjoy the cherished relationship with Albertsons customers. Customers will be able to place their orders through DoorDash’s app — they’ll no longer have to order through Albertsons’ website (though they can if they wish).

DoorDash, moreover, isn’t all that experienced in the sort of deliveries it’s assuming for Albertsons. The company says it started working with Albertsons in 2018 and now serves 230 of its supermarkets (out of 2,200 company stores nationwide).

According to the registration statement for its Dec. 9 initial public offering of stock, DoorDash has specialized in delivering restaurant meals, though its ambitions are to grow beyond the segment.

Grocery deliveries may well be different from restaurant orders — they’ll be larger on average, with more perishables. DoorDash drivers use their own cars, but Albertsons drivers use company vehicles, because food preservation standards are different. (DoorDash spokesman Taylor Bennett says the company won’t be acquiring the Albertsons fleet.)

The likeliest explanation is that Albertsons is looking to cut costs. And what better way to do that than by transferring a whole category of worker, along with their right to benefits such as health coverage and retirement, to an outside company.

In Los Angeles County, where about 60 drivers are employed at selected Vons and Pavilions stores — typically serving upscale neighborhoods — their pay ranges from $15 to $20.50 an hour, depending on their longevity with the company, according to Local 770 of the United Food and Commercial Workers.

The local had been trying to unionize those workers, but that effort has ceased, now that the jobs are being eliminated.

In Northern California, drivers for Albertsons-owned Safeway, the dominant supermarket in the region, are members of UFCW Local 5. The roughly 250 drivers had reached a contract agreement in November that is being voted on now, with ballots scheduled to be counted Friday. The union leadership expects ratification, union official Jim Araby told me.

The proposed contract allows Safeway to outsource deliveries to DoorDash under very narrow conditions, Araby says. Deliveries must be offered to employees first; customers can opt to use DoorDash, but the delivery fee is $9.95, compared with $3.95 for an employee service. Araby says he expects Safeway to fight hard to loosen the restrictions on DoorDash usage in future negotiations.

The contract would give the workers healthcare coverage paid mostly by the company, as well as a 401(k) with a company match, vacations and sick leave. The wage range is $17 to $22.50 an hour.

The unionized drivers aren’t subject to the outsourcing. But that leaves as many as 600 at risk in Southern and Central California, Araby estimates.

Albertsons says it expects to offer other jobs within the company to the affected workers, and severance to those who leave.

Albertsons drivers plainly have had a better deal than DoorDash “dashers,” as the company terms its front-line workers. DoorDash says its drivers earn an average of more than $22 per hour “while on a delivery,” but that covers only time spent after a driver agrees to accept an order. Waiting time isn’t included. And the figure doesn’t include drivers’ expenses, such as fuel, maintenance and insurance.

Put it together, and we’re witnessing the continued deterioration of work in America. California tried to stem the decline with AB 5, the law that forbade companies such as Uber and DoorDash to designate the workers essential to their business model as “independent contractors” with almost no benefits or workplace rights.

The companies, fattened with billions of dollars in venture investors’ cash, fought back with Proposition 22. Given their success at persuading California voters that stiffing these workers was a good thing, you can expect similar efforts in states coast to coast. Albertsons drivers are cannon fodder in this battle, but many, many more will face the same fate.



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Egypt wants to register millions of gig workers for state insurance, aid

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CAIRO: Egypt will start registering millions of gig workers in order to offer them health insurance and emergency state aid during the coronavirus pandemic, which has taken a particularly heavy toll on the nation’s ad-hoc employees, officials said.

There are at least 14 million gig workers in Egypt, and while some workers and campaigners welcomed the government’s drive, others warned that many workers could be reluctant to sign up – fearing tax and social security payment demands.

The government said it plans to identify and support two million gig workers in the country of 100 million people by the end of this year, labour ministry spokesman Haitham Saad El-Din said on Saturday.

“It is part of a government plan to give assistance to this segment of the society which has been majorly affected by the pandemic,” he said, adding that officials were focusing first on identifying casual construction labourers.

Gig workers who have their employment status registered on their national identity cards under a new “irregular employment” category will be given free social security insurance and be eligible for state welfare programmes.

Egypt’s state-run insurance plan includes life insurance and disability cover, as well as covering healthcare costs.

The announcement is the latest in a series of government measures aimed at shielding vulnerable groups from the economic fallout of the pandemic.

Soon after the coronavirus outbreak began, it launched a programme that supports irregular workers with monthly aid, and Egyptian President Abdel Fattah el-Sisi called for financial support to be boosted when a second virus wave took hold.

State welfare spending surged 36% in the first half of the current fiscal year, Finance Minister Mohamed Maait said recently.

On the books

Some daily labourers hailed the registration drive as a positive step, saying it would help bring them into the formal economy and recognise their economic contribution.

“Millions of Egyptians have been affected by this pandemic but it’s really good that the government is not leaving us behind,” said Farouk Mahmoud, 35, a temporary worker from the city of Sohag.

Still, while the latest data puts the number of gig workers at 14 million, the real number may be much higher – making registering them a daunting administrative task, said Bassant Fahmi, a member of parliament’s economic affairs committee.

Some workers may also be wary about being on the books.

“Many of them may fear being asked afterwards to pay taxes or insurance. That could mean a lot of gig workers avoiding being identified by the government,” she told the Thomson Reuters Foundation.

But besides any misgivings about being under the government’s radar, many gig workers in Egypt are more concerned about the dearth of permanent job opportunities – especially for young people – and the health of the wider economy.

“It isn’t crucial for me to have a job on my ID,” said Abanoub Lotfi, a 26-year-old driver for ride-hailing service Uber, who has a degree in commerce.

“What really matters is that the government offers me a stable job that suits my academic background and helps me afford my needs and those of my family.” – Thomson Reuters Foundation



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Self-employed, gig workers still waiting on PPP rules for bigger loans

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Virojt Changyencham | Moment | Getty Images

The self-employed and gig workers are anxiously waiting for the Small Business Association to update guidelines to its Paycheck Protection Program, which could mean bigger loans for the group.

The Biden administration announced last week changes to how the SBA will calculate forgivable loans for sole proprietors and other small businesses without any employees. The updated formula — which will likely lead to larger loan amounts for non-employer firms, including sole proprietors and independent contractors — will be announced this week.

It’s still unclear when in the week the SBA will update its guidelines, meaning that those who would benefit from the change should still wait to submit their applications for the program.

More from Invest in You:
Smallest businesses getting extra PPP help. What to know before applying
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“Loans submitted prior to the official rule changes are subject to the rules in effect at the time of application,” said Carol Wilkerson, an SBA spokesperson.

That’s led to frustration for some who want to take advantage of the two-week priority application window for the smallest businesses that went into effect on Feb. 24 and ends the second week of March. Of course, sole proprietors will still be able to apply for PPP loans until the program deadline at the end of the month; they just won’t get priority treatment once the 14-day exclusivity window closes.

For now, lenders are working to help borrowers prepare what they can to be ready for the updated guidelines.

“We’ve always taken the approach of, ‘Hey, we don’t have all the answers, but let’s proceed as far as we can without the answers,'” said Ed Barry, CEO of Capital Bank, based in Rockville, Maryland.

Barry added that the bank is also working to build awareness among small businesses that may not realize that they’re now eligible for a PPP loan.

What is known about the formula change so far

For firms with employees, maximum PPP loans are 2.5 times average monthly payroll costs, per the SBA. As a stand-in for payroll costs for solo workers, the SBA used net profit information from tax returns, even though payroll and profit are different measures.

In addition, the net profit line includes deductions, which reduced or eliminated profit numbers for some, yielding small loans or making them ineligible for the program.

The updated formula will instead use gross income as a stand-in for payroll costs, a larger number than net income, meaning many firms will get more money in forgivable loans.

Loans submitted prior to the official rule changes are subject to the rules in effect at the time of application.

Carol Wilkerson

SBA spokesperson

“It’s a tremendous change,” said Keith Hall, president and CEO of the National Association for the Self-Employed.

The change is important, as sole proprietorships are the most common business structure in the U.S. The IRS says there are some 41 million self-employed people in the country and, in 2018, more than 27 million had filed a return with an IRS 1040 Schedule C form for sole proprietors, according the agency.

Many of these businesses have been particularly hard hit by the coronavirus pandemic. About 70% of such firms with no employees are owned by women and people of color, and 95% of Black-owned and 91% of Latino-owned firms are sole proprietorships, according to SBA data.

But so far, very little forgivable funding from the SBA has gone to sole proprietorships — according to a recent survey from NASE, nearly two-thirds of its members said they didn’t get any money from the program.

Much of that was due to confusion in the early days of the program around eligibility and forgiveness, which are hopefully clearer today, Hall said.

“Many of the reasons that those small-business owners did not either apply or get approved for a PPP loan — I think many of those barriers have been removed,” he said.

Questions remain

To be sure, other changes to the PPP program that the Biden administration announced last week do go into effect today, March 1 — some student loan borrowers, legal non-residents and those with certain criminal records are now eligible to apply for forgivable loans.

Still, there are further questions for sole proprietors around the timing of applications, especially for those who already got a loan approved but would get more under the new formula. So far, there isn’t a process for amending a dispersed loan, or holding back an application that’s currently pending.

“All unknowns right now,” said Alex Cohen, CEO of Liberty SBF.

If you’re a small business with a story to share about PPP, email Carmen Reinicke at carmen.reinicke@nbcuni.com

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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.

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Dream realised in compelling live gig

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MATT KEEGAN
Mary’s Underground, February 28

★★★★

In another bid to reach beyond the musical horizon, Matt Keegan composed Vienna Dreaming as a tribute to his great grandfather, Heini Portnoj, an Austrian Jew forced to abandon his musical career in Vienna to escape the rising tide of Nazism. Three years after releasing a recording of the suite, Keegan finally presented this ambitious music in concert.

Matt Keegan and Veronique Serret. Shane Rozario

Matt Keegan and Veronique Serret. Shane RozarioCredit:Shane Rozario

Its strength lies not only in the imagination brought to bear, but in Keegan’s empathy for his subject, his intent being to slide inside the mind of his great grandfather, both as events unfolded in 1930s and in the aftermath, with Portnoj looking back after settling in Australia.

The concert’s instrumentation and personnel differed from the album, with only Keegan (clarinet, saxophone) and drummer Miles Thomas being shared. The album’s cello now became Veronique Serret’s violin and the double bass became Brendan Clark’s electric bass, with Ben Hauptmann (electric guitar) and Freyja Garbett (keyboards) completing the cast. These changes were much more than cosmetic, with the improvisational aspect of the work expanded, allowing for some startling individual contributions, most notably from Serret.

As consistently strong as the suite was, the opening Vienna Overture was especially compelling, with the main waltz-time theme materialising from skimming fragments of sound, dissolving back into those fragments and reassembling itself yet again – an evocation of an elderly Portnoj musing on an impossibly different time and place, long, long ago.

As with the album, the sound was carefully calibrated to shift between the familiar – the bruising intensity of Keegan’s baritone saxophone, for instance – and an extreme use of electronic treatments, including occasionally radical reverb and delay on the drums, amplifying the work’s prevailing oneiric quality and intentionally blurring clarity of outline. Ghosts of Johann Strauss, Frank Zappa and Miles Davis all seemed to materialise and dematerialise at various points, but without any sense of appropriation.

Providing an instantly engaging opening set was Yulugi, with Gumaroy Newman’s arresting voice and yidaki leading us deep into his ancestral culture, in dialogue with Keyna Wilkins’ piano and luminous flutes.

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