The depressing "shut-in economy" that's fueled a boom in app-based delivery services for everything from your laundry to bottles of booze has put a noticeable squeeze on SF's already squeezed restaurants. Mission Pie co-owner Karen Heisler has decided she's mad as hell about it and not going to take it anymore, and she's hoping to get the Board of Supervisors to take some action.
Heisler tells Mission Local that she's refused to do business with the likes of DoorDash, Caviar, UberEats et al because the 20- to 30-percent commissions they want on sales of her pies would mean that she'd have to raise prices for everyone — including non-delivery customers — in order to make the delivery end profitable.
And while the delivery apps are driving this over-charging by restaurants — Heisler says she's seen contracts that disallow her from only up-charging delivery customers — they're also benefiting from the fact that they don't have to give their workers, the delivery people, any benefits or comply by any other city mandates that restaurants have to.
Heisler, who used to work at the Environmental Protection Agency, took her argument to Supervisor Aaron Peskin, and Peskin tells Mission Local that he'd be more than eager to pursue a broad legal complaint against the gig economy in the city pending the outcome of several cases that are already working their way through the Office of Labor Standards and Enforcement (OLSE).
Though there have been multiple cases in recent years focused on the legality of classifying drivers and delivery people as independent contractors — particularly at Uber where drivers are essential to the core business and are arguably directed by the company in how to do their work — the apps and their expensive lawyers have so far stayed ahead of the game and kept from having to make all their workers salaried employees.
Postmates settled a class-action case last year that meant $6 million in payouts to its delivery people, and resulted in some higher pay rates in certain states — but the company won insofar as they didn't have to change their business model. Uber and Lyft each settled similar cases in 2016, for $100 million and $27 million respectively, and both walked away still able to call their California drivers contractors.
But things may be shifting, at least in California, following the April 2018 Dynamex ruling. That ruling laid out a three-part test for whether a worker could be called a contractor, based on whether that worker typically performs work similar to what a given company's business is outside of their role at that business.
While its true that many gig economy workers prefer the freedom that's afforded by being a contractor — as the Pew Charitable Trusts discussed in a piece following the Dynamex ruling — there are plenty would probably prefer having job security and benefits.
And this brings us back to the ways in which these businesses have negatively impacted traditional industries, largely because they don't play by the same rules. You may have seen stories last year from the New York Times about taxi drivers committing suicide because ride-hailing apps have rendered their once valuable taxi medallions worthless. Uber and Lyft managed to siphon plenty of business away from traditional taxis — especially in a city like San Francisco where there were never enough cabs and the system was largely broken and waiting to be disrupted. But the way they did that, through cheaper rides, looks likely to be going away soon. Following both companies IPOs, analysts have widely surmised that Uber and Lyft are going to begin raising prices now that they have to answer to investors every three months and race toward profitability. And surely you've noticed that an UberX ride isn't, on average, nearly as cheap as it was three or four years ago.
Long story short: We haven't heard the end of these arguments about the fairness and legality of gig economy and app-based labor. And San Francisco just may end up being at the forefront of locally based fights against the business models of these companies.