The Gig Economy, a child of neo-liberalism
Thomas Klikauer teaches at the Sydney Graduate School of Management at Western Sydney University, Australia. He has over 600 publications including a book on the AfD.
Meg Young is a Sydney Financial Accountant and HR Manager who enjoys the outdoors, good literature, foreign music and in her spare time – works on her MBA at WSU, Australia.
Cross-posted from Counterpunch
One of Germany’s most popular bike rider fast food delivery companies is actually a Dutch-owned company, called Lieferando.de. Apart from operating in Germany, Lieferando.de also operates in thirteen other European countries, in which 18% of the company is owned by Morgan Stanley, 5% by BlackRock, etc. In 2020, it increased its turnover by a whopping 50% to €2.4bn.
Companies like Lieferando.de make good profits – for those who already have a lot of money, i.e. Morgan Stanley, BlackRock, etc. Greed continues to be good! Simultaneously, those underpaid workers making such stratospheric profits possible are exposed to managerially-orchestrated dehumanization and workplace despotism. Not just because of this, most if not all, delivery services have been criticized because of the minuscule amount of commissions that workers get paid and the abhorrent working conditions they face.
Because of the camouflaging effect of neoliberalism’s preferred ideologies of free market and competition, semi-monopolists like Lieferando.de like to exploit their market power. It is just another example of what the former Harvard Business Review editor Magretta once said,
business executives are society’s leading champions of free markets and competition, words that, for them, evoke a worldview and value system that rewards good ideas and hard work, and that fosters innovation and meritocracy. Truth be told, the competition every manager longs for is a lot closer to Microsoft’s end of the spectrum than it is to the dairy farmers. All the talks about the virtues of competition notwithstanding, the aim of business strategy is to move an enterprise away from perfect competition and in the direction of monopoly.
The food delivery “market” (!) is no different – monopolies are still created. Yet, the monopolistic asymmetry of market power also operates in a very different market where (in most cases) nothing is actually sold. This is the labor market. In order to avoid sliding into abject poverty and being turbo-charged by the successive elimination of the welfare state, workers in companies such as Lieferando.de, face minimum wage and precarious working conditions.
For some time now, trade unions in the area of food and restaurants described working conditions at Lieferando.de, and others as truly precarious. Tormenting the Poor German style, leaves many of Germany’s workers exposed to work in the so-called mini-jobs.The term mini-job smokescreens Germany’s substantial low-wage sector.
In total, the forces of capital working against workers in the labor market is masked by neoliberalism’s free choice ideology allowing workers to decide when, where, and how much they work. In reality, all this is defined by algorithmic management.
For Lieferando.de riders, this means bad working conditions and being paid just slightly above the minimum wage of €10 per hour – soon to increase to €12. Beyond wages at the poverty line, employees are forced to use their own mobile phones. Aided by management’s hallucination of being “self-employed contractors”, they are not even reimbursed for the costs of their devices and mobile phone contracts.
Exploiting its monopoly position has even registered with German authorities. Germany’s competition watchdog – the Bundeskartellamt – said recently, we are currently not conducting any proceedings against Lieferando.de. However, we continue to monitor the market development very closely. A classical statement to maintain the appearance of competition while monopoly capitalism reigns.
Despite all this, even the German Hotel and Restaurant Association sees Lieferando.de as having monopolistic structures. According to DEHOGA, this has led to a brutal dependence of restaurateurs on the monopolist Lieferando.de. DEHOGA suggests that customers should do their orders directly with restaurants. This is a mildly useful suggestion for customers and does not help the underpaid workers stuck with bad working conditions.
Meanwhile, Lieferando’s riders are more likely to be young people who are physically fit. Of course, some people who simply like to ride a bicycle might like to be working for Lieferando.de. Yet, increasingly, Lieferando’s bicycle riders are from outside of Germany. Today, many riders are from South Asia and even from South America.
Because of language barriers, many migrant workers cannot find any other job unless they can do illegal jobs, or face even more precarious work. One Lieferando.de rider said, I’ve been doing the job for three years now. Before, I had the job as a student, but I was no longer employed after the end of my fixed-term contract, and since then I have been sitting on the bike.
Another worker (38 years old) has been riding through Germany’s capital city of Berlin for Lieferando.de for the last three years to deliver food to local apartment doors. For a meager salary of just above the minimum wage, workers are exposed to the dangers of urban road traffic every day – Germany had 2,700 deaths on roads in 2020. In order to get a safer and better working conditions, workers are committed to trade unions. Yet, some Lieferando.de workers have started to think about applying solidarity among riders inside Lieferando.de with workers employed by other delivery services.
Years ago, when the first food delivery services began to conquer Germany’s fast growing delivery market, it was presented as a student job. This was capital’s preferred narrative so that corporations could engage in wage dumping while the public was kept at bay.
Yet, many workers do the delivery job for only several years. Some even change countries to get a job while others migrate to and from Germany. In some cases, workers only stay in one company for half a year. This is because their short-term contracts are often very limited. And, in some other cases, workers are simply terminated by the company even during their trial period.
Worse, there are workers who have moved to the Netherlands because they had gone through a handful of delivery services operating in Germany. These riders are forced to do the same job not only at different companies, and now in a different country. Frequent changing of jobs occur because almost all delivery companies operate a strict hire and fire policy.
As a matter of fact, most riders can’t do this work for more than five years. The stress, danger, and backbreaking work will simply break you, says a rider. It is not uncommon for workers who have to wear a heavy backpack for more than half a year to develop permanent damage. With some riders starting to realize that if you need three days to recover before you start a new shift, something is going wrong.
As one might expect, there are many examples of complaints that arise from inhumane delivery work. Most of the damages in the delivery work is sustained not only by the human back but also the knees. Climbing up and down several flight of stairs in city high-rises with a heavy backpack is a daily occurrence.
Worse, there are also psychological disorders that are often forgotten when people talk about delivery riders. Although riders see a lot of people – workers are actually alone. Alone on their bikes, they ride through dense traffic. Every day, delivery riders are completely on their own riding through crowds of strangers.
There are delivery riders who, when they rest after their shift, close their eyes and all they see are buses and trucks approaching them. The threat of a traffic accident is a constant given. In worse cases, riders have been followed by car drivers – road rage is not uncommon in Germany.
There have been situations where road rage led to the beating up of delivery riders. Some workers have experienced this several times. One rider addressed a car driver in an unsafe situation that was a danger for the rider. The car driver reacted with violence.
Because of forcing workers to ride without breaks, another German delivery company called Gorillas was fined €15,800 for violating German working hour and occupational safety regulations. Germany’s prime business daily – the Handelsblatt – has estimated Gorilla’s annual turnover to be somewhere in the vicinity of €260 million. The €15,800 fine issued by the German authorities amounts to 0.0006% of Gorilla’ annual turnover. That will hit the company hard!
With laughable fines like these, no wonder, workers continue to suffer while sitting alone on their bikes. Unsurprisingly, delivery ridersfeel isolated. Yet, when they speak a few words with other people, talking is limited to the simplistic and repetitive “money-to-food-exchange” with customers. These short spouts of communication do not create real human-to-human interactions. After a few words, the loneliness continues.
Instead, this sort of communication is a pre-determined business interaction carried by humans. No wonder that workers feel bothered by apathy. Stuck between two opposing forces, they are made to feel insignificant by customers and their companies. Worse, workers do virtually the same processes over and over again like a machine – it is utterly dehumanizing.
Yet, from time to time there are still positive moments – as in any job. Some customers and traffic participants have time for a short Guten Tag or hello! or even a smile. But then, there are also the negative aspects of riding for an online delivery company. At times, customers are in their own world and no longer notice how they treat delivery workers.
Even during a freezing and stormy weather outside – as it is often the case in East-Germany’s city of Berlin, during those long winter months – many customers just do their online order and then, when a delivery rider arrives at their door, they do not even pay a tip. In some cases, people don’t even bother coming to the door yet complain when a rider rings twice while standing in Berlin’s cold rain.
Maybe online customers should feel a little guilty or perhaps should no longer order online. On their lonesome rides, some workers think a lot about what can be done to support the other riders. Actually, working conditions are really bad in the entire catering industry. As a remedy, some people suggest, it is preferable to order directly from the restaurant.
Yet, many workers disagree. They think it is better to order directly from the delivery service. This is mostly because working conditions of delivery riders who ride for some of the small fast food restaurants are even worse. Therefore, delivery riders think that it is way better to pick it up yourself.
Despite all this, working conditions have not improved during the last two years of the Coronavirus pandemic. In fact, with tight Covid-19 restrictions, it became increasingly harder for the delivery riders. As most food handovers take place at the window today, the delivery riders do not even get the chance to use the restroom. Worse, with the introduction of online tipping, workers say that, it is the company that benefits the most from this change.
Accordingly, riders’ wages have been falling. It is exactly what happened in the USA. As a result of recent changes in Germany, riders receive what their companies call a mixed wage. This means that the tip is included into their wage, i.e. workers now receive even less. Unsurprisingly, this is why delivery riders prefer to receive cash in hand from customers.
Because of all this, online delivery companies are definitely making huge profits. This can be seen at Amazon. It generate rather obscene profits while management is able to offset their so-called losses, in order to disguise their true profitability. To them, Joe Biden’s idea of a 15% global corporate tax on their secret off-shore bank accounts is not even a joke.
Back at Lieferando.de, workers believe that they should not just get paid for delivering food. One worker said, I am not paid to ride around the city even though I function as a living advertisement. Workers get paid per delivery. Worse, the business data workers’ generate is meticulously collected, re-used, analyzed, fed into algorithms, and then sold.
Beyond all that, workers are paid while working conditions worsen. Here is how it works. The more delivery riders there are, the more these companies establish a new form of working reality. Over time, this becomes socially acceptable and even legitimate. It establishes a downward spiral and this may well be part of a corporate investment. Its goal it to establish bad work. This is somewhat of a counter-model to Germany’s much trumped social-welfare capitalism and highly regulated work regimes with strong trade unions.
Because of all this, there have been protests by riders for several years, including in Berlin. One of the reasons is the dehumanization that workers experience when being sent out in bad weather conditions knowing that workers are risking their lives. On a recent question in Berlin’s Senate about accidents in the transport industry, it emerged that there is one accident involving a delivery rider per day in Berlin.
Many workers know that there is a higher number, as there are many unreported cases. There are also terrible weeks where every day one delivery rider experiences an accident, and ends up in one of Berlin’s hospital. Yet, it has never been just about wages.
One of the key demands of local riders is not about achieving a higher wage, but more about the fact that wages are being paid at all. Late payment of wages is common and with most workers can’t afford to wait for their wage to arrive.
If wages come too late – which they often do – workers struggle to their pay bills. Workers are convinced that if they would receive everything they are entitled to, then their wage would increase by roughly 30%.
Delivery workers should be provided with a bicycle, a mobile phone, Internet access, and appropriate and protective work clothes. If Lieferando.de really pays for the wear and tear, workers would no longer feel they are ripped off. Many workers also feel shortchanged on vacation and on agreed working hours.
It all amounts to the fact that workers would have 30% more income once these corporate costs are no longer offloaded onto workers. Lieferando.de should also provide a fast and stable connection to the Internet. If a worker has no Internet link on his mobile phone for just five minutes, money will be deducted by the company immediately.
Yet, there is resistance and delivery riders have won numerous improvements. Surprisingly, trade unions have hardly played a role in this struggle. This raises the question, what would you like from the unions? Trade unions will have to develop methods that are specific for precarious working conditions. Many German unions still believe, if you are deprived of your wage, we lodge a legal complaint for you.
That often means, in half a year’s time, that lawsuit will be decided by one of Germany’s labor courts. Yet, workers say, my rent will have to be paid tomorrow. Instead of that, German unions should compensate workers for lost wages when these losses are caused by a strike.
We have seen how this works in the UK. It was an historic strike of the riders who work for Stuart Delivery. Stuart Delivery is a sub-contractor of Just Eat Takeaway, which, in turn, belongs to Lieferando.de. The strike went on for over 30 days and the local union has supported riders financially for lost wages.
The last problem is that Germany’s established trade unions are still trying to do everything inside Germany. Yet, many delivery workers think that it is important that riders talk to each other as delivery riders, and not just through unions and lawyers.