Those who warned that California’s anti-Labor Proposition 22 would hasten the destruction of good jobs and the increase in jobs at shows, have a new data point to quote, courtesy of the Albertsons grocery empire.
As of the end of February, hundreds of home delivery drivers for Vons, Pavilions and other stores owned by the Boise, Idaho chain will no longer be employed by Albertsons.
Their work will be outsourced to concert delivery company DoorDash, which has made a national deal to take over the service.
This is what we predicted would happen with Proposition 22. We could see it reaching 160 kilometers away.
Steve Smith, California Labor Federation
Albertsons says the transition is nationwide and has nothing to do with California’s Proposition 22.
But make no mistake. Proposition 22, approved in November with a $ 206 million war chest from shipping and delivery companies, made this change almost inevitable in California.
With contributions totaling $ 52.1 million, DoorDash was the second largest supporter of the Proposal 22 campaign, behind Uber, which raised $ 59.2 million.
Proposition 22 makes it virtually impossible for regulators to examine salaries, hours and other working conditions at concert companies. Without a change in federal law, your workers will be prevented from organizing a union. They are not entitled to unemployment insurance or workers’ compensation.
“This is what we anticipated would happen with Proposition 22,” said Steve Smith, a spokesman for the California Labor Federation. “We could see that coming up to 160 kilometers away.”
Proposition 22 was designed to exempt transportation and delivery companies from the state’s long-range labor legislation, AB5, which made it more difficult for them to designate their workers as independent contractors rather than employees, who are entitled to significant benefits at the place of employment. job.
“That’s why we did AB5 and what we warned people about with Prop 22,” says Congresswoman Lorena Gonzalez (D-San Diego), who sponsored the labor law. “Left without rules, corporations whose only concern is their bottom line will replace good middle-class jobs with independent contractors who don’t have benefits like the minimum wage and health we expect.”
Affected workers deliver from local stores to residential customers for a nominal fee, using company-owned refrigerated trucks the size of a small delivery van. They were told in December that their jobs would be phased out as of February 27.
Albertsons said in an e-mailed statement that “it made the strategic decision to discontinue the use of our own home delivery fleet in a variety of market areas and states” in early December. She says her goal was “to compete in the growing home delivery market more effectively”, making the transition to “third-party logistics providers specializing in that service”.
Some curious things about it.
Albertsons says that “since the outbreak of COVID-19, our e-commerce business has reached new heights and has become more strategically important for Albertsons companies. Our goal is to really make e-commerce a competitive advantage. ”
If this is indeed the case, why would the company give up control of its relationship with its third-party delivery customers, instead of keeping this “strategically important” service in its own hands?
Delivery customers are probably among the best customers, spending more money and translating their appreciation for Vons and Pavilions services into more sponsorship.
Instead, Albertsons will assign control of this service to an outside supplier. DoorDash, not Albertsons, will appreciate the warm relationship with Albertsons customers. Customers will be able to place their orders through the DoorDash app – they will no longer need to place orders via the Albertsons website (although they can, if they wish).
In addition, DoorDash does not have as much experience in the type of deliveries it is taking on for Albertsons. The company says it started working with Albertsons in 2018 and now serves 230 of its supermarkets (out of 2,200 owned stores across the country).
According to the registration statement for its initial public offering on December 9, DoorDash specializes in delivering meals to restaurants, although its ambitions are to grow beyond the segment.
Grocery deliveries may differ from restaurant orders – they will be higher on average, with more perishable products. DoorDash drivers use their own cars, but Albertsons drivers use company vehicles because the standards for food preservation are different. (DoorDash spokesman Taylor Bennett says the company will not acquire Albertsons’ fleet.)
The most likely explanation is that Albertsons is looking to cut costs. And what better way to do that than by transferring an entire category of worker, along with their entitlement to benefits such as healthcare and retirement, to an outside company.
In Los Angeles County, where about 60 drivers are employed at select Vons and Pavilions stores – usually serving upscale neighborhoods – their salary ranges from $ 15 to $ 20.50 an hour, depending on their longevity with the company , according to United Food and Commercial Workers Local 770.
The locality had been trying to unionize these workers, but that effort has ceased, now that jobs are being eliminated.
In Northern California, drivers from Safeway, owned by Albertsons, the dominant supermarket in the region, are members of UFCW Local 5. The 250 or so drivers reached a contractual agreement in November that is now being voted on, with ballots scheduled to run. be counted Friday. Union leadership awaits ratification, union leader Jim Araby told me.
The proposed contract allows Safeway to outsource deliveries to DoorDash under very strict conditions, Araby said. Deliveries must be offered to employees first; 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 loosen restrictions on the use of DoorDash in future negotiations.
The contract would give workers health coverage paid mostly by the company, as well as 401k with company equivalence, vacation and sick leave. The salary range is $ 17 to $ 22.50 an hour.
Unionized drivers are not subject to outsourcing. But that leaves about 600 at risk in southern and central California, estimates Araby.
Albertsons says it hopes to offer other jobs within the company to affected workers and compensation to those who leave.
Albertsons drivers clearly had a better deal than DoorDash “dealers”, as the company calls its frontline employees. DoorDash says its drivers earn on average more than $ 22 an hour “during a delivery”, but that only covers the time spent after the driver agrees to accept an order. The waiting time is not included. And the amount does not include expenses for drivers, such as fuel, maintenance and insurance.
Put it all together and we are witnessing the continuing deterioration of work in America. California tried to contain the decline with AB5, the law that prohibited companies like Uber and DoorDash from designating workers essential to their business model as “independent contractors”, with almost no benefits or labor rights.
Companies, fattened with billions of dollars in cash from venture capitalists, responded with Proposition 22. Given its success in persuading California voters that stiffening these workers was a good thing, you can expect similar efforts in coastal states to coast. Albertsons drivers are cannon fodder in this battle, but many, many more will face the same fate.