The past couple of months have been very hard on many Canadians as we try to stop the spread of Covid-19. It’s been hard on those who have fallen ill and the families who have lost loved ones, which has been the main focus of most people. But that has been far from the only pain that many people have felt, as many people have lost their jobs or seen their hours reduced, putting huge financial strains on so many households.
We’ve seen certain sectors hit very hard by the closures and physical distancing measures while some others have been able to adapt to some degree to try to keep going. We’ve seen some stores move to online delivery or curbside pick-up. We’ve seen grocery stores set aside hours specifically for seniors and put up plexiglass screens to protect cashiers. And we’ve seen some restaurants close their dinning rooms and start to exclusively do take out or delivery.
While that has been hard for many who work in the restaurants, it’s meant busy times for those who do the delivery piece. That’s especially the case for those who work for digital delivery services, jobs in the gig economy that’s not very well paid & without the best conditions. But with things as they are and more people stuck at home ordering food for their favourite local spot, you’d think that this would be a good time economically for some of these web-based giants of the delivery world. It was with that in mind that a piece of news came out today that stood out:
It turns out that delivery service company foodora announced today that they will be shutting down their Canadian branch as of May 11th. In their press release where they announced this move, foodora stated that they are closing up shop because they were “not been able to reach a level of profitability in Canada that’s sustainable enough to continue operations, competing against strong local players and a highly saturated market for online food delivery.”
While I understand that the market for this service is tight, you’d think that in this period that would be a boom one for them wouldn’t be a problem. To say that the timing of this decision seems strange is an understatement in the extreme, as it’s not pointing to all the reasons why other businesses are struggling or failing right now; Covid-19. So what’s up here? What’s the deal? Could there be another factor at play here? What else could push a company that’s in one of the few industries that’s getting a boost in the Covid-19 environment to pull up stakes and give up? How about this piece of news from last month:
Ahhh, union busting, that old chestnut, now in app form. Yep it was just a short couple of months ago that the Ontario Labour Relations Board ruled that couriers working for foodora had the right to join a union and have collective bargaining. Many foodora couriers have been working with that Canadian Union of Postal Workers in an effort to form a union, citing financial and safety concerns for those couriers. This was a big moment for this industry as a whole because the digital players in this space have claimed that their couriers are independent contractors, not employees. Labour organizers disagreed, pointing out that the current set up allows the company to control workers’ pay and schedule and mete out disciplinary action, all while dodging other employer responsibilities, such as paying for lost wages following injury, offering paid sick days and supplying gear. For foodora, it was a win-win situation, which made it much less so for the couriers themselves.
And now we see this decision come today, in a time where delivery businesses are busier than normal by far. A time when there should be more than enough business to go around, now is the time that foodora decides to pull the plug. Smells kinda stinky, doesn’t it? Yeah, it does and is in keeping with some of the longest union busting traditions out there. Have to admit it’s disappointing to see this new aged company, a tech success, apparently leaning on some of the oldest tricks used by some companies since the industrial revolution. And this is in a time when these couriers and the work that they provide is increasingly being viewed as essential, a time when people are realizing that they should be better paid and better treated. Now, yeah now is the moment foodora decides that the market is “highly saturated.” I call shenanigans on that load of foul-smelling stuff. This smells a lot like what Walmart did back in 2005 when they closed down one of their stores in Jonquière, Quebec when staff there had the nerve to unionize. For the record, the Supreme Court found in 2014 that closure was actually illegal, something to bare in mind in this case.
We’ll see if foodora actually follows through on this announcement but in the meantime, this is a bad decision with extremely bad form. In a time when online food delivery services and their workers are providing an essential service & are putting ads all over the place talking about their commitments to the communities they serve, this announcement from foodora is not only bad communications, but just plain old bad business. While they might be allergic to having their couriers unionized, you know that some other online delivery service provider will embrace unionization and look better for it. People are seeing the value and importance of people who work in these jobs and one thing that seems to be clear in this time is that people want to see them treated and paid better. The companies that fight that reality are the ones that will eventually be left out in the cold. With their decision today, it looks like foodora is one such company, apparently packing up to avoid unionization of their staff and in the process cutting off their noses to spite their face.