Those who warned that Proposition 22 against California against labor would accelerate the destruction of good work and the rise of action have a new data point to name, thanks to the Albertsons grocery empire.
By the end of February, hundreds of drivers at 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 entered into a nationwide agreement to take over the service.
This is what we predicted with Proposition 22. would happen. We can see it coming 100 miles from there.
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 shipping and delivery companies, made this change in California almost inevitable.
With contributions totaling $ 52.1 million, DoorDash was the second largest supporter of the Proposition 22 campaign, just behind Uber, which raised $ 59.2 million.
Proposal 22 makes it virtually impossible for regulators to investigate wages and hours and other working conditions at the gig establishments. Without a change in federal law, their workers would be banned from organizing a union. They are not entitled to unemployment insurance or workers’ compensation.
“This is what we predicted would happen with Proposition 22,” said Steve Smith, a spokesman for the California Labor Federation. “We can see it going 100 miles.”
Proposal 22 is designed to exempt business and delivery companies from the state’s far – reaching labor legislation, AB5, which has made it more difficult for them to hire their workers as independent contractors rather than employees, who are entitled to substantial job benefits.
“That’s why we did AB5 and what we warned people about with Prop 22,” said Assemblywoman Lorena Gonzalez (D-San Diego), who sponsored labor laws. “If there are no rules, companies that are their only concern will replace their middle-class work with independent contractors who do not have benefits such as a minimum wage and healthcare that we expect.
The workers affected by this deliver deliveries at local cost from local shops to residential customers using company-owned refrigerated trucks, which means the dimensions of a small delivery van. They were notified during December that their jobs would be eliminated from 27 February.
Albertsons said in an email that it had made the strategic decision “in early December” to discontinue our own delivery fleet in a variety of market areas and states. The company says its goal was to ‘compete more effectively in the growing home delivery market’ by switching to ‘third-party logistics providers specializing in the service.’
A few curious things about it.
Albertsons says that ‘since the outbreak of COVID-19, our e-commerce business has risen to new heights and become more important to Albertsons companies. Our goal is to make e-commerce truly a competitive advantage. ”
If this is indeed the case, why would the company relinquish control of its relationship with its delivery customers to a third party, rather than holding this ‘strategically important’ service in its own hands?
Delivery customers are probably one of the best customers, spending the most money and translating their appreciation for Vons and Pavilions service into more protection.
Instead, Albertsons will relinquish control of this service to an external reseller. DoorDash, not Albertsons, will enjoy the beloved relationship with Albertsons customers. Customers can place their orders through the app through DoorDash – they no longer have to order via the Albertsons website (although they can if they want to).
On top of that, DoorDash is not all that is experienced in the kind of deliveries it accepts 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 the initial public offering of December 9, DoorDash has specialized in delivering restaurant meals, although its ambition is to grow beyond the segment.
Deliveries of groceries can be very different from restaurant orders – they will be larger on average, with more perishable products. DoorDash drivers use their own cars, but Albertsons drivers use commercial vehicles because food storage standards differ. (DoorDash spokeswoman Taylor Bennett says the company will not acquire the Albertsons fleet.)
The most likely explanation is that Albertsons wants to save on costs. And what better way to do that than to transfer an entire category of workers along with their right to benefits such as health coverage and retirement to an outside company.
In Los Angeles County, where about 60 executives work at select Vons and Pavilions stores – which typically serve upscale neighborhoods – their salaries range from $ 15 to $ 20.50 an hour, depending on their business life, according to Local 770 of the United Food and Commercial Workers.
The locals tried to unite the workers, but the effort stopped, now that the posts have been eliminated.
In Northern California, executives from Albertsons, the dominant supermarket in the region, are members of UFCW Local 5. The approximately 250 executives reached a contract agreement in November that is now being voted on. Friday. The union leadership is expecting ratification, union official Jim Araby told me.
The proposed contract enables Safeway to outsource deliveries to DoorDash under very tight conditions, Araby said. Deliveries must first be offered to employees; customers can choose to use DoorDash, but the delivery fee is $ 9.95, compared to $ 3.95 for an employee service. Araby says he expects Safeway to fight hard to weaken the restrictions on the use of DoorDash in future negotiations.
The contract provides the health care coverage for the workers who are mostly paid by the company, as well as a 401,000 with a match, holidays and sick leave. The wage range is $ 17 – $ 22.50 per hour.
Union leaders are not subject to outsourcing. But that puts as many as 600 at risk in Southern and Central California, Araby estimates.
Albertsons says he expects to offer other jobs within the company to the workers involved, and to separate those who leave.
The Albertsons executives apparently had a better deal than DoorDash ‘dashers’, as the company calls its top workers. According to DoorDash, its drivers earn on average more than $ 22 per hour ‘during a delivery’, but this only covers the time spent after a driver has agreed to accept an order. Waiting time is not included. And the figure does not include the driver’s expenses, such as fuel, maintenance and insurance.
Put it together, and we see the continuing decline of work in America. California has tried to stem the decline with AB5, the law that bans companies like Uber and DoorDash from designating the workers essential to their business model as ‘independent contractors’ with almost no benefits or workplace rights.
The companies, filled with billions of dollars in cash from venture capitalists, fought back against Proposition 22. Because of their success in convincing California voters that it’s a good thing to stiffen these workers, you can expect similar efforts in the coast-to-coast states. Albertsons executives are cannon fodder in this battle, but many, many more will face the same fate.