Article 43

 

Saturday, December 12, 2020

Rise Of The Temp Workers Part 11 - Gig Delivery

image: gig economy

Corporate chieftains (backed by the economists and politicians they purchase) are creating what they call a workforce of non-employees for one reason: Greed. It directly transfers more money and power from workaday families into the coffers of moneyed elites.
- Rise Of The Temp Workers Part 9 - The Gig Economy

The structure of the labour market has fundamentally changed, and what we used to think of as unemployment has been replaced by mass part-time work, much of it unwanted.
- Unemployment is low only because “involuntary” part-time work is high - Business Insider, December 2019

Airbnb and DoorDash IPOs leave gig economy issues unresolved

By admin
The Finance Info
December 10, 2020

The GIG ECONOMY - aka the sharing economy - has been one of the most important online phenomena of the decade. This week it also made a loud splash on Wall Street, as the stock market listings of delivery company DoorDash and home rental company Airbnb met a euphoric reception.

But for a sector that is already getting long in the tooth, there are a surprising number of unresolved questions. Of particular interest this week: Are these good businesses? And, as their sometimes deleterious impact on society prompts a backlash, will they make good businesses in future?

This is an important transitional moment. Following last year’s initial public offerings of ride-hailing companies Uber and Lyft, the main exemplars of this new style of online marketplace are now on the public markets.

It’s hard to argue with the gig economy’s impact. In the year before they went public, the four companies generated more than $100bn worth of rides, deliveries and home rentals between them (though some bookings have fallen back during the pandemic).

Using apps to organise informal markets has undoubtedly resulted in important new forms of competition and unleashed extra resources in the economy. That includes giving more people scope to participate in a part-time labour force (this is the “gig” part of it) and extending the use of assets like private cars and homes (the “sharing” part).

But that has not translated into profits. Even the flattering financial metric these companies prefer to be judged by - adjusted earnings before interest, taxes, depreciation and amortisation - showed all four to be loss - making in the 12 months leading up to their listings, with some $3.3bn in red ink between them.

So are their BUSINESS MODELS half-baked, or just half-evolved?

While Airbnb has a solid gross margin above 80 per cent, the pre-IPO range of 45-57 per cent for the other three shows how much their supposedly lightweight marketplace models are weighed down with the costs of trying to generate demand.

These include the subsidies that have been lavished on consumers during vicious battles for market share. This may not have generated clear financial returns for shareholders, but it has undoubtedly generated consumer benefits. For many people, getting a ride whenever you want or ordering a meal from a smartphone are now just part of everyday life.

Regulation will undoubtedly increase costs further and limit the companies’ room for manoeuvre. The benefits of labour market arbitrage paying lower costs for informal workers - are likely to erode as the political heat intensifies. Meanwhile, city authorities are starting to realise that it may not be in their residents best interests if the streets are full of empty ride-share cars, apartments are unavailable for rent to local workers, and restaurants close down because of excessive fees charged by delivery companies.

The stock market has a way of exerting discipline. Even if the current euphoria rewards profitless IPO candidates, the pressure will build to hone their business models. UberҒs stock price has more than tripled since its low point in March but it is still not above making sensible financial decisions. This week, it gave up on its expensive in-house attempts to develop autonomous driving and flying cars.

There are two obvious avenues to get to profitability. Consolidation has already swept through the ride-sharing and delivery apps, and there is more to come. Survivors will be in a better position to raise prices.

SOURCE

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New Food Delivery Service Helps Local Economy

By Camri Nelson Dayton
News 1
November 21, 2020

DAYTON, Ohio - Brian Hoeflich is picking up food for his first delivery of the day. He’s a driver for Dayton’s very own new food delivery service, 937 Delivers.

“I like the freedom of it and the fact that I’m working on my own and basically self-managing myself when I’m on the shift,” said Hoeflich.

With food in hand, Hoeflich is on his way to drop it off to the customer. 937 Delivers takes pride in not only its customer service, but also making sure it keeps its drivers and customers safe from COVID-19 through contactless delivery.

“From the time I pick up an order to the time I drop it off, I’m adhering to every COVID restriction that there is, as well as, you know wearing a mask keeping myself distant or going out of a restaurant, and then when I deliver I just delivered it to the door,” he said.

Unlike national food delivery services like DoorDash and Uber Eats, 937 doesn’t hit restaurants with extra fees. There’s a $5 delivery fee for customers and a $2 fee for partnering businesses.

“Everyone’s wallet is tight these days from the businesses to the customers. It’s better to have a more affordable system,” he said.

Pizza Bandit is just one of 12 Dayton restaurants who have partnered with 937 Delivers.

Marketing and Development Contractor Brian Johnson says it was important for this co-op because it truly helps the local economy.

“It’s critical that as much of the money spent on services and food like this stay in the community, where it’s offered,” said Johnson. “So, it was really important to us that we not be shipping off 30 percent to California and rather keeping that 30 percent here to help all of our local businesses get through this.”

937 Delivers is currently in the pilot stages, but will begin official orders on November 27.

SOURCE

Posted by Elvis on 12/12/20 •
Section Dying America • Section Workplace
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