"Gig economy" is a polite term for "worker misclassification" - a way to violate labor law by pretending that your employees are actually independent contractors.
Unsurprisingly, the companies that cheat their employees also cheat their other suppliers. Doordash spent the entirety of the crisis preying on beloved, endangered local restaurants with a string of outright frauds:
By colluding with Google, Doordash was able to interopose itself between restaurants and diners, making it nearly impossible for us to transact together without giving Doordash a cut that exceeded the restaurant's margin, making every order a money-loser.
The grimly hilarious part is that Doordash ALSO lost money - billions! - during the crisis. They lost money while driving restaurants to bankruptcy.
Small wonder we cheered whenever a viral story of a restaurateur turning the tables went viral.
Why do investors pump billions into a money-losing enterprise? They're betting that a pile of shit this big *must* have a pony under it somewhere. Specifically, they're betting that Doordash can squeeze its workers and other suppliers so hard that they begin to turn a profit.
Doordash isn't exactly subtle about its plan to attain profitability by destroying its suppliers. When all the restaurants have been driven to extinction, it plans to replace them with "ghost kitchens."
These are airless shipping containers filled with people who used to own restaurants who have to *pay* Doordash for the privilege of turning out meals for delivery:
Ghost kitchens are the terminus of all gig economy delivery plays, not just Doordash. If anything, the Ubereats version is even more sinister, as you'd expect from disgraced former Uber CEO Travis Kalanick, who's heading it up:
The other cost-center for Doordash is its workforce, the misclassified employees that it pretends are contractors. Again, the writing was on the wall here from the beginning.
From day one, Doordash engaged in utterly shameless wage-theft:
Doordash, like Uber, lures workers in with high initial rates, subsidized by its investors' cash. This is Doordash's version of the Amazon flywheel: more drivers mean faster delivery means more orders means more restaurants dependent on Doordash means more drivers.
Then, as its suppliers become dependent on the company, it tightens the screws. Hundreds of thousands of Uber drivers discovered this the hard way when their wages were suddenly, unaccountably slashed, as Uber slashed the investor subsidy that lured them behind the wheel.
Two of those drivers were Dave Levy and Nikos Kanelopoulos, who met when they were both Uber drivers and made the jump to Doordash together.
Now that Doordash is slashing their wages, they're determined to fight back, using the lessons they learned in the Uberpocalypse.
As Brody Ford writes for Bloomberg, the two have founded a driver solidarity movement called #DeclineNow, which calls on drivers to reject jobs that offer rates so low that drivers could actually lose money on them.
The pair have observed that the Doordash system functions as a labor auction: if a job doesn't attract a driver, the job is republished with a higher rate, and a higher one, and a higher one, until a driver bites.
There are few enough drivers in their home area of Lehigh Valley, PA that they say they've been able to effectively raise wages for *all* drivers, and the #DeclineNow forum they run has 40,000 members.
The company has to walk a fine line: bursting the illusion that its employees are really contractors - say, by firing them for refusing jobs - would waste the millions they spent passing California's Prop 22, a worker misclassification initiative that cost $200m all in.
But they have other tricks up their sleeves: for example, the company withholds the amount tips you offer when you order your food.
That means that a $3 job might be worth $3, or it might be worth $13 with tip. Drivers call Doordash "Tony's Casino" in homage to CEO Tony Xu.
Every gig economy company is a mirage in search of a monopoly. Any concessions the workforce wins are an existential crisis for these money losers, which is why Uber is once again planning to hide job payouts from drivers until they accept the work:
One dirty trick Doordash hasn't tried (yet): antitrust. You see, once workers are misclassified as "small businesses," any effort to raise their wages is legally indistinguishable from forming a cartel to raise prices, one of the few antitrust areas the DoJ still punishes.
If you're a driver, customer or citizen, you can sign onto this change.org petition in support of a (laughably, sadly) minimum standard of decency in the company's dealings with its drivers:
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