A year to the day since they launched an ambitious campaign to become the first app-based workforce in the country to join a union, Foodora couriers are standing — two metres apart — outside the food delivery giant’s headquarters.
It’s May Day, and couriers are mad. This is not the anniversary they’d hoped for.
The second floor of the sleek brick building on Richmond Street will soon be empty.
Foodora has initiated insolvency proceedings after recently announcing a hasty exit from the Canadian market.
Couriers are protesting these decisions, which will put 3,000 of them out of work amid a pandemic.
They are protesting what they see as an attempt to circumvent the union drive, one that the province’s labour board recently ruled could proceed over Foodora’s objections.
And they’re protesting a broader problem: a system that often excludes gig workers from basic protection, including the right to join a union
“All the issues that have always existed are out in the open now,” says Ivan Ostos, one of the couriers brandishing Lysol wipes and a microphone at the socially distanced May Day rally.
“They’ve never been more glaringly obvious. We’re simply not respected.”
Over the past year, Foodora has rebuffed complaints about a business model based on classifying its fleet of cyclists and drivers as independent contractors.
Foodora said the model has benefits: most notably, it provides freedom and flexibility to workers who can be their own boss.
It also creates a hurdle to unionizing: independent contractors do not have that right under Ontario law.
The company sank significant resources into fighting Foodora couriers’ attempt to challenge their job classification, the first step toward joining the Canadian Union of Postal Workers.
In February, Foodora lost. Now it’s May Day, and the company will soon be gone, citing an inability to grow in a competitive market. It says the legal dispute with CUPW has nothing to do with the decision.
For Ostos, the timing stings.
“There’s all this stress from this pandemic that’s going on,” he says. “It probably couldn’t have happened at a worse time.”
But the battle is not over, he says, because it was never just about Foodora.
“This is about the whole gig economy,” he says. “This is about the whole Canadian economy.”
Around 1.7 million Canadians work in the gig economy, according to a recent Statistics Canada study, based on the latest available data from 2016.
It’s a small percentage of the workforce, around 8 per cent, but one that’s steadily grown over the past decade. Many see it as part of an overall trend, one where more and more workers are in short-term, casual, or otherwise unstable jobs.
Foodora couriers’ campaign to join the Canadian Union of Postal Workers went public in May last year.
In reality, the campaign started long before that. It originated not in a boardroom, but in Toronto’s green spaces: with the city itself serving as food couriers’ workplace, parks are the equivalent of the office water cooler.
“Any relationship between co-workers that exists, exists because of the initiative of the couriers to meet each other,” says courier Chris Williams, who was first introduced to the idea of unionizing at a courier gathering in Trinity-Bellwoods.
Like most app companies, Foodora has always described itself as a digital platform — not an employer. Couriers receive little in the way of formal training. They can buy Foodora-branded bags and jackets, but as self-employed contractors, they are not required to wear them. They pick up work through an app, not a manager.
For all those reasons, Foodora argues its couriers do not fit the description of an employee with the right to join a union.
Putting aside this formidable legal obstacle, CUPW organizer Liisa Schofield says the first challenge to unionizing Foodora couriers was another defining feature of the job: isolation.
In a job mediated almost entirely by an app, most Foodora couriers didn’t even know who their colleagues were — let alone whether they had the same concerns about working conditions.
“We really had to completely tear apart any traditional modes of organizing,” she says. “It was really about street outreach.”
Schofield helped couriers develop ways to start building relationships with co-workers. The templates ranged from a 30-second exchange at a stoplight to a five-minute chat outside a restaurant to a half-hour debrief over coffee.
The ultimate test was whether, in even the briefest version of the conversation, a fellow courier would provide their name, their number, and say a keyword: union.
Even Schofield was surprised at the uptake.
“As a campaign that was really largely based on cold calls … I have never had a more positive experience of approaching workers,” she says. “There was just like an atmosphere in the air of people wanting change and needing to see it in their lives.”
Couriers’ pay had been stagnant for years at $4.50 a delivery plus $1-a-kilometre from restaurant to drop off. That structure also meant much of the work — in particular, the travel back from a delivery to a pickup — was unpaid.
For Williams, isolation on the job wasn’t simply a hurdle to unionizing. It was also a reason unionizing felt necessary.
“Loneliness just kind of impoverishes your life probably just generally speaking, but it also means that you’re probably unsupported,” he says. “If you get in an accident, it’s quite a safety hazard because no one’s going to come to you at the hospital.”
And to Williams, all those problems had a root cause: couriers’ status as independent contractors.
“These trends don’t have our best interest at heart. They allow for the company to have a really flexible workforce that kind of just accepts whatever wages they set,” he says. “And I think intuitively, a lot of us recognize that’s not good enough.”
Foodora has always maintained its independent contractor model is an opportunity for workers.
When it acquired Toronto-based food delivery startup Hurrier in 2015, Foodora said it “absorbed an existing business that worked alongside independent contractors who executed food deliveries on behalf of the company.”
“This model was working well for both sides,” the company said in a statement. “So we maintained it.”
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Hurrier’s founder Adam Hasham says his original aim back in 2013 was to use technology to make courier work fairer. An algorithm could dispatch orders quickly and simply, based on which courier was closest to the pickup point. Human discretion at traditional courier companies left room for discrimination.
“I had heard a lot of horror stories about how some couriers were being treated,” he says.
Hasham says he used the independent contractor model because at the time he couldn’t afford to pay couriers a regular salary. Back then, he says around 80 per cent of his startup’s revenue went to couriers’ wages.
While he saw technology as a force for good, he never saw it as a panacea.
“I think unionizing, historically, really helped workers,” says Hasham. “(Unions) are the ones that kind of kicked off a five-day work week, with 9-to-5 hours, vacations and all these basic employee rights that are super important.”
Foodora, which is owned by Berlin-based multinational company Delivery Hero, bought Hasham’s startup in 2015; the software he built to dispatch orders still powers the company’s app.
But Foodora’s perspective on unionization differed to Hasham’s. As couriers prepared to hold a union vote in August 2019, the company encouraged them to vote No so that it could “continue to work directly with riders” without “third-party interference.”
The results of the vote were sealed until the parties could resolve the key legal issue, one that spoke to the essence of the gig economy. Were Foodora’s couriers truly independent contractors, acting as their own bosses? Or were their working conditions largely beyond their control — dictated by an app on their smartphone?
The hearings took place at the Ontario Labour Relations’ Board in a sage green room plagued by constant internet failure. Despite the somewhat anachronistic setting, the proceedings drew an unusually large and often youthful crowd. It was the first real window into an app company’s operations in Canada.
Lawyers for Foodora argued strenuously that couriers fit the legal description of a contractor, acting essentially as self-employed entrepreneurs.
While Foodora may occasionally intervene in couriers’ work for the sake of quality control, lawyers argued drivers and cyclists were largely in control of their day-to-day working conditions. They owned their own equipment and exercised discretion over when and where they worked.
But Foodora’s position did not convince the labour board.
In a decision issued in February this year, chair Matthew Wilson ruled Foodora’s couriers did not look much like entrepreneurs at all. Evidence of couriers “dual-apping” — working for multiple food delivery apps at one time — was not entrepreneurialism, he ruled. It was simply evidence of hard work.
Ultimately, Wilson ruled that couriers, in fact, looked more like dependent contractors — a middle ground between traditional employees and independent contractors, and a category of worker that has the right to unionize.
It was the first ruling of its kind on the gig economy in Canada.
The labour board’s ruling didn’t mean couriers had officially unionized, but it meant they had the legal right to. That opened the door to months more legal wrangling between CUPW and Foodora to unseal the union ballots cast months earlier.
What made the ruling so significant was not just that it was the first about an app-based workforce, but that it was so expansive in its reasoning.
“I think that the board, thankfully, kind of resisted the temptation to just be as kind of minimalist as possible,” says Ryan White, the lawyer representing CUPW.
“They certainly made a few comments and I think really provide us with a very good kind of jumping off point for future platform-based applications and future gig economy applications.”
In response to the decision, Foodora said it was “assessing how it would move forward,” adding for now, it was “business as usual.”
Within weeks, the advent of a global pandemic made business as usual impossible. Couriers quickly found themselves on the front lines of the crisis delivering meals — and even medication.
For some, it only sharpened the argument for joining a union.
“We never got any kind of pay raise or danger pay or anything like that. During the pandemic, we were still making the same shitty rates that we were before,” says courier Alexander Kurth. “It just shows how essential unions are in order to protect what all of us deserve.”
Before the negotiations between CUPW and Foodora could begin in earnest, Foodora announced its exit from Canada.
It came in the form of a late April email to couriers, with the subject line: “Important Update.”
In the email, Foodora said it was “not able to grow our business into a leading position in the highly competitive and saturated Canadian environment.” Couriers, the email said, would receive a notice terminating their contract later that day.
Despite the undeniable economic uncertainty created by the pandemic, some couriers questioned whether Foodora was truly a loser amid the tumult.
The day after Foodora announced its departure, its parent company released its first-quarter results. Globally, orders and revenues had doubled; the pandemic, its report noted, had strengthened demand.
Couriers are not listed as creditors. They are expected to receive their wages in full before the company leaves.
That fact has not lessened couriers’ indignation.
“I’m angry at this company for abandoning thousands of workers when they’re needed the most,” says Kurth. “We were always disposable to them. And it’s infuriating.”
The May Day rally closes with a round of “Solidarity Forever,” a labour anthem inspired by an early-20th century coal miners’ strike in West Virginia. It’s an era that seems a world away from a group of young people whose boss is an app, an app created by software engineers inspired by Silicon Valley.
But for couriers, the song concludes with a fitting line — one about creating a “new world from the ashes of the old.”
That, says Schofield, was the whole point of a campaign aimed at the heart of the gig economy.
“It can’t continue the level of exploitation that it’s been dependent on,” she says. “Its days are numbered.”
Hustled, a podcast series investigating the gig economy, launches May 19. Subscribe at Apple Podcasts, Spotify or wherever you listen to your favourite podcasts.
Listen to episode one of Hustled: David vs. Goliath
El-Erian: Here's a 'nightmare scenario' for the U.S. economy – Yahoo Canada Finance
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The big risk with the latest U.S. jobs report is if it turns out to be a “head fake” says Mohamed El-Erian, chief economic advisor at Allianz.” data-reactid=”16″>The big risk with the latest U.S. jobs report is if it turns out to be a “head fake” says Mohamed El-Erian, chief economic advisor at Allianz.
“That’s the nightmare scenario,” El-Erian told Yahoo Finance after the US unexpectedly added 2.5 million jobs in May as states started re-opening and easing COVID-19 shelter in place measures.
“The big risk … is that this is a head fake, a major head fake that we are picking up the impact of both data distortions, and policy distortions,” said El-Erian.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="May’s employment report has economists scratching their heads. They were expecting the US to lose 7.5 million jobs. Instead it gained jobs, and the unemployment rate, ticked lower to 13.3%.” data-reactid=”19″>May’s employment report has economists scratching their heads. They were expecting the US to lose 7.5 million jobs. Instead it gained jobs, and the unemployment rate, ticked lower to 13.3%.
“No one was looking for an uptake in jobs.” said El-Erian. “It may be that the economy has picked up in a major way. That’s the hope. And that’s certainly what the market has embraced.”
“Or it may be two other things: that government policies were very effective in reducing those who were officially unemployed. Or it may be that the data is very, very noisy,” he added.
“What is really striking is if you look at continuing claims, they went up, not down. So every other indicator you look at suggest that the labor market is not as healthy as these numbers,” said El-Erian.
If indeed the report is a “head fake,” El-Erian warns “the political process may have moved away from relief and repair.”
“We’ve got to understand these numbers better, and we’ve got to continue with the message to Congress that there is still a big hole we find ourselves in, even if you believe these numbers,” he added.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="President Trump on Friday signed legislation lengthening the PPP loan program, aimed at helping small businesses keep workers on their payroll.” data-reactid=”36″>President Trump on Friday signed legislation lengthening the PPP loan program, aimed at helping small businesses keep workers on their payroll.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The jobs report sent stocks soaring on Friday, with the Dow (^DJI) gaining more than 3%, and the Nasdaq (^IXIC) rallied to a record high.” data-reactid=”37″>The jobs report sent stocks soaring on Friday, with the Dow (^DJI) gaining more than 3%, and the Nasdaq (^IXIC) rallied to a record high.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The Federal Reserve’s actions to combat the economic fallout of COVID-19, including backing corporate debt markets, have helped the markets rally reminiscent of the 2009 rebound.” data-reactid=”38″>The Federal Reserve’s actions to combat the economic fallout of COVID-19, including backing corporate debt markets, have helped the markets rally reminiscent of the 2009 rebound.
“In the equity market, there’s nothing more comforting than the notion that someone with a printing press in the basement and an unlimited ability and willingness to buy is your backstop,” said El-Erian.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="
"What we want is fundamentals to improve and validate asset prices. That’s how this is an orderly outcome. If that doesn’t happen at some point, fundamentals will assert themselves,” he added.” data-reactid=”40″>
“What we want is fundamentals to improve and validate asset prices. That’s how this is an orderly outcome. If that doesn’t happen at some point, fundamentals will assert themselves,” he added.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Read more:” data-reactid=”41″>Read more:
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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For tutorials and information on investing and trading stocks, check out Cashay” data-reactid=”49″>For tutorials and information on investing and trading stocks, check out Cashay
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.” data-reactid=”50″>Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.
Don’t Lose the Thread. The Economy Is Experiencing an Epic Collapse of Demand. – The New York Times
Despite it all — a nation on edge, with an untamed pandemic and convulsive protests over police brutality — for the first time in three months there is a scent of economic optimism in the air.
Employers added millions of jobs to their payrolls in May, and the jobless rate fell, a big surprise to forecasters who expected further losses. Businesses are reopening, and the rate of coronavirus deaths has edged down. The Trump administration has begun pointing to what are likely to be impressive growth numbers as the economy starts to pull out of its deep hole.
All of that is good news, and far better than the alternative of a continuing collapse in economic activity. But it also creates a risk: distraction and complacency.
You can already sense in the public debate over the economy that people are starting to lose the thread — viewing the slight rebound from epic collapse as a sign that a crisis has been averted. That certainly is the kind of optimism evident in the stock market, which is now down a mere 1.1 percent for the year.
But there are clear signs that the collapse of economic activity has set in motion problems that will play out over many months, or maybe many years. If not contained, they could cause human misery on a mass scale and create lasting scars for families.
The fabric of the economy has been ripped, with damage done to millions of interconnections — between workers and employers, companies and their suppliers, borrowers and lenders. Both the historical evidence from severe economic crises and the data available today point to enormous delayed effects.
“There’s a lot of denial here, as there was in the 1930s,” said Eric Rauchway, a historian at the University of California, Davis, who has written extensively about the Great Depression. “At the beginning of the Depression, nobody wanted to admit that it was a crisis. The actions the government took were not adequate to the scope of the problem, yet they were very quick to say there had been a turnaround.”
Though it may not attract the attention that reopening beaches and a soaring stock market might, the evidence is everywhere if you look closely.
Consider those seemingly great new employment numbers. It is clear that many workers who were temporarily laid off in March and April returned to work in May, such as employees at once-closed restaurants that opened up, or construction workers who returned to job sites.
But it still left the economy with 19.55 million fewer jobs than existed in February. And the rebound came in part thanks to more than $500 billion in federal aid to small businesses offered on the condition that workers be retained, under the Paycheck Protection Program.
Other data points to a severe but slower-moving crisis of collapsing demand that will affect many more corners of the economy than those that were forced to close because of the pandemic.
New orders for manufactured goods, for example, remained in starkly negative territory in May, according to the Institute for Supply Management; its index came in at 31.8, far below the level of 50 that is the line between expansion and contraction.
And despite the net gain in employment in May, there have been many announced layoffs at companies outside sectors directly affected by the pandemic. This suggests that the forced shutdown of travel, restaurant and related industries is rippling out into a broad-based shortage of demand in the economy.
Consider just a partial list of large well-known companies unaffected by the direct first-round effects of pandemic-induced shutdowns, but which have since announced layoffs: Chevron, I.B.M. and Office Depot.
Last week, the Congressional Budget Office tried to put a number on the aggregate economic activity that will be lost over the next decade compared with what was projected at the start of the year. That number is $15.7 trillion, reflecting both less economic activity and deflationary forces that reduce prices.
That is 5.3 percent less “nominal” output, meaning not adjusted for inflation, than had been forecast. For comparison, from 2008 to 2018, total nominal output came in 6 percent below the level the C.B.O. had forecast at the start of 2008.
We know how miserable that economic crisis and sluggish recovery were, with long-term costs to earnings and well-being. The C.B.O. is now forecasting that the next decade will be nearly as bad — but emphasizes that policy choices will shape how things actually evolve.
The economy is a gigantic machine in which one person’s consumption spending generates someone else’s income. The pandemic began by crushing the economy’s productive capacity — a shock to the supply side of the economy, as many types of business activity were shut down for public health concerns.
In normal times, when there is a negative supply shock (say, a year of drought that reduces agricultural crops, or new tariffs that make imports more expensive), the pain can be intense for people in sectors directly affected, yet the economy as a whole adjusts.
But this crisis is so large and so sudden that the usual adjustment mechanisms aren’t working very well.
The people losing their jobs because of shutdowns cannot easily find new ones, because so much of the economy is shuttered at the same time. The businesses in danger of closing have cut every possible expense: A hotel isn’t going to invest in new furniture or new reservation software right now. And consumer demand for some seemingly safe goods falls because those goods are complements to the sectors that are shut down.
“Hotels are locked down, so people buy fewer cars because they don’t need to travel as much,” said Veronica Guerrieri, an economist at the University of Chicago Booth School of Business. “Restaurants are locked down, so people don’t need fancy clothes because they don’t want to go out as much.”
The result is that what started as a disruption to the supply side of the economy has metastasized into a collapse of the demand side, she and co-authors say in a recent working paper. They call it a Keynesian supply shock: an inversion of the demand-driven crisis of the Great Depression described by the great economist of that era, John Maynard Keynes.
“Demand is interrelated with supply,” said Iván Werning, an M.I.T. economist and a co-author of the paper. “It’s not a separate concept.”
The demand shock, with lagged effects, is only beginning to hurt major segments of the economy, like sellers of capital goods that are experiencing plunging sales; state and local governments that are seeing tax revenues crater; and landlords who are seeing rent payments dry up.
The government can’t wave a wand and bring back industries that are semi-permanently shuttered. That original supply shock can be fixed only as public health conditions allow sports arenas and the like to reopen.
But the government can act — and has acted — to try to keep demand for goods and services at pre-crisis levels. That, in turn, can smooth the path for other sectors to grow so that there is not a prolonged depression of jobs, income and investment, with a resulting reduction in the economy’s long-term potential.
In the early phase of the crisis, Congress expanded unemployment benefits, funneled hundreds of billions of dollars toward small businesses to keep workers on their payrolls, and supported state governments, among other steps. But much of this help is scheduled to expire this summer, absent further action — and the positive jobs numbers Friday led many Republicans on Capitol Hill allied with the Trump administration to suggest that they were reluctant to do more.
It is against his backdrop that some of the most influential — and fiscally conservative — voices in economic policy are saying that further aggressive spending is needed to prevent this shock from causing long-lasting damage to the economy.
“This is the time to use the great fiscal power of the United States to do what we can to support the economy and try to get through this with as little damage to the longer-run productive capacity of the economy as possible,” Jerome Powell, the Federal Reserve chair and a longtime fiscal hawk, said at a news conference in late April.
“Please, spend wisely, but spend as much as you can!” Kristalina Georgieva, the managing director of the International Monetary Fund, implored the world’s governments at an event in May. “And then, spend a bit more for your doctors, for your nurses, for the vulnerable people in your society.”
Both the Fed and the I.M.F. more typically act as brakes on fiscal profligacy. For Mr. Powell and Ms. Georgieva to effectively beg elected officials to stop a spiraling crisis reflects the unusual circumstances of this moment and the extraordinary risk they see if government action is inadequate to the job. Their comments are the equivalent of a normally debt-averse financial adviser urging a family to borrow more money to ride out a period of illness without suffering long-term financial damage.
When the crisis we now know as the Great Depression began in 1929, President Herbert Hoover started with denial, then tried blaming other countries, then argued that there was nothing the government could really do to contain the damage.
Eventually, the Hoover administration took more aggressive action, creating a large federal program of mass employment. “He gave a speech and said that 700,000 Americans were at work on federal public works, and it was bigger than anything that had done before,” Mr. Rauchway said. “And that was true, but it was at a time when more than seven million people were out of work.”
That crisis showed how when there are profound rips in the economic fabric, repairing them isn’t a simple job, it isn’t quick, and even what seems like a huge response often isn’t enough.
It’s great that the economy is ticking up from its shutdown of March and April. And the world right now is confusing and chaotic. But that makes it all the more important not to lose focus on fundamental forces that risk holding back the economy and that, if unchecked, could mean a second lost decade in this young century.
Seniors having big impact on local economy – Quinte News
With June being Seniors’ Month, Quinte News is looking at the impact that those 65 and over have on our community and more specifically, on local businesses.
Close to 20% of the Quinte Region’s population falls into the senior category, with the area’s cost of living, natural amenities and sometimes slower pace to life, being attractive qualities for the area to have.
But it’s not just seniors relocating here that’s making a difference for the local economy.
Bay of Quinte Regional Marketing Board Executive Director Dug Stevenson says, there are plenty of older people who find our area attractive as a place to visit and spend some cash.
“One of the things that’s interesting is when you consider seniors’ spending”, he says.
“Of course they’re on a fixed income, but they have fewer things they need to pay for as well. They probably don’t have a mortgage anymore, the kids are probably gone and they’re not worried about paying for things like education, so they’ve probably got a bit more set aside for that leisure spending”.
Stevenson says from a travel and tourism perspective, the seniors group is actually more comparable to Millennials, who range between the ages of 22 and 38.
“A lot of them have no strings attached. They have a fixed income, but have money set aside and they know what they want to do and go do it.”, he says.
Quinte West Chamber of Commerce CEO Suzanne Andrews says seniors who live in the area have a strong impact on the economy, but not just as consumers of goods.
“They access a lot of services” she says. “Things like health services, some of which are privately owned businesses, or they go to hairdressers and restaurants. So definitely they are a huge economic factor when looking at the local economy and consumer spending in our region”.
Andrews also noted that while many seniors do move to our area to retire, not all of them want to get out of work completely, which adds to the local workforce.
“We are finding here in the Quinte Region especially, seniors are choosing to continue to work, maybe not at a full time level, but are available to work and look for positions that fit their experience and knowledge”, she says. “That’s definitely something for employers to think about”.
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