11 ms·

Italy demands €733M in fines from food delivery platforms

132 points by Svip 6y ago

hikerclimber 6y ago
good. I hope doordash and the other delivery platforms get fined a lot of money. :)
cwhiz 6y ago
Meanwhile, these companies can't make any money as it is.[0] At some point maybe we should consider that this model is completely broken. The gig workers hate it, the restaurants hate it, and the delivery companies can't make a profit. What in the fresh hell are we doing where nearly every part of this "economy" is mad about it? [0]: https://www.marketwatch.com/story/doordash-shares-sink-as-revenue-more-than-triples-but-loss-more-than-doubles-11614289424?mod=mw_latestnews&mod=home-page https://www.marketwatch.com/story/doordash-shares-sink-as-re...
- jimbob45 6y ago
  Kudos to the legislators for allowing the experiment to run as long as it did to find potential solutions. Now it’s time to legislate it away, just like many have done with Uber/Lyft.
- bpodgursky 6y ago
  Someone should let the gig workers know! I bet they'd quit if they knew how miserable they were.
  - z3rgl1ng 6y ago
    Dope take.
  - deleted 6y ago
    [deleted]
  - _Microft 6y ago
    Did it occur to you that some people could be in situations where they simply cannot quit a job no matter how miserable it makes them?
    - hsgdh3487 6y ago
      It probably did occur to GP, that's the whole point (if I'm right to be charitable). Top comment is arguing that these people should be laid off as part of a government initiative to reshape the economy. If these people can't quit, what will happen if they are laid off? Is there any policy that could help these workers? My best guess is UBI, but that is another discussion.
      - bpodgursky 6y ago
        I would be more charitable to calls to destroy the gig industry if the proposals were coupled with any realistic path to retraining or alternatively-employing the employees. When the comment is just "this job should not exist" I just know there's no intellectual consistency behind it. They want to punish employers they don't like, and don't especially care who is hurt in the process.
    - jdminhbg 6y ago
      That's going to be bad news when it gets legislated away then, isn't it.
      - MereInterest 6y ago
        The solution to a race to the bottom, or to other kinds of prisoner's dilemma, is frequently to outlaw the option of racing to the bottom. Healthy bread can't compete because bread with sawdust is cheaper? Outlaw adding sawdust to the bread. Environmentally conscious factories can't compete because it is cheaper to pollute? Outlaw polluting to make a level playing field. Companies that pay their workers a living wage cannot compete with those who don't? Outlaw paying workers below a living wage, so that companies paying a living wage can compete. In this case, I'd also want to see some form of UBI.
  - Narkov 6y ago
    I don't know you circumstances but it is possible to still do something out of desperation - possibly to feed your family - and hate it.
    - recursive 6y ago
      So in that hypothetical scenario, would that person be better or worse off if they were denied the option to do that thing they're doing that they hate?
      - Narkov 6y ago
        Worse off. Feeding their family is probably a higher priority than a shitty job. It doesn't change the fact that the job is rubbish.
  - srswtf123 6y ago
    On the off chance you’re unfamiliar with the term, I suggest you learn about wage slavery. https://en.m.wikipedia.org/wiki/Wage_slavery https://en.m.wikipedia.org/wiki/Wage_slavery
    - bpodgursky 6y ago
      That sounds bad! It sounds almost as bad as unemployment slavery, or homelessness slavery!
      - freeone3000 6y ago
        Yes, exactly. People shouldn't need money to live.
  - cwhiz 6y ago
    Lots of people do jobs that they hate. It’s common in practically every industry.
- tiborsaas 6y ago
  I think drones will save them. Can't wait to spend a romantic dinner in a small restaurant with my girlfriend and watch the delivery drones come and go, humming around us.
  - deleted 6y ago
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  - steelframe 6y ago
    > Can't wait to spend a romantic dinner in a small restaurant with my girlfriend and watch the delivery drones come and go, humming around us. I honestly can't tell if this is sarcasm.
- programbreeding 6y ago
  I'm not saying this is a reason to do it, but the part of the model that isn't broken is that people love it. The consumers are benefiting.
  - floren 6y ago
    Yes, people love getting stuff cheap. But if, say, an auto shop was offering cheap oil changes because they're just dumping the used oil down the sewer instead of properly disposing of it, "people like cheap oil changes" isn't justification for the continued harm.
    - standardUser 6y ago
      Tell that to nearly the entirety of the global textile, chemical and energy industries (to name a few). Causing harm is not, nor has it ever been, a deterrent to operating a business.
      - bobthepanda 6y ago
        No, but losing money on every transaction (or the majority of them) certainly is. In that sense, food delivery apps smell a lot like Moviepass. Customer love was not enough to save Moviepass, though it certainly didn't help that the actions they took to turn it around burned through all that goodwill in very short order.
      - floren 6y ago
        Sure! But "other industries do bad things too" does not excuse these companies doing bad things. The Italian government can't do much when a Chinese factory pours chemical waste into the ocean. They can stop Uber Eats from screwing over Italian delivery drivers.
  - ghaff 6y ago
    There are tons of services I would use if I could get them for well below cost.
- PragmaticPulp 6y ago
  > What in the fresh hell are we doing where nearly every part of this "economy" is mad about it? We're at the point in the hype cycle where the service has become popular, so the media has flipped to the contrarian takes about how it's bad, actually. It wasn't that long away that we were reading stories about how food delivery services were providing restaurants an opportunity to keep their doors open during COVID lockdown. Restaurants only hate food delivery when the companies try to force them to lower prices (so the delivery service can capture the margin) or when they perform bad-faith actions like misrepresenting themselves as an official partner of the restaurant when no such deal has been made. The restaurants who simply prepare orders at their normal retail price and hand them off to delivery drivers who deliver to customers who know what they're getting into are actually loving this boom. It's extra business without the hassle of dealing directly with customers. That's actually the driver of the problems: Restaurants have been so eager to get a piece of this booming business that some of them have given up their own margin to partner with delivery services looking to squeeze every dollar out of the restaurants. I suspect that era won't last long as restaurants do the math on what it's costing them.
  - kgog 6y ago
    > It wasn't that long away that we were reading stories about how food delivery services were providing restaurants an opportunity to keep their doors open during COVID lockdown. Can you link to some stories? I didn't see any in my bubble.
  - LegitShady 6y ago
    >That's actually the driver of the problems: Restaurants have been so eager to get a piece of this booming business that some of them have given up their own margin to partner with delivery services looking to squeeze every dollar out of the restaurants. I suspect that era won't last long as restaurants do the math on what it's costing them. They don't have a choice, with covid etc. Many restuarants would rather not have delivery, or delivery that didn't cost them 20% of gross.
    - nickff 6y ago
      Most restaurants would rather not pay rent/lease and property taxes that eat more than 20% of gross, yet those are recognized as 'costs of doing business'. These restaurants are unfortunately locked in to a business model that is incompatible with COVID.
- ransom1538 6y ago
  " Meanwhile, these companies can't make any money as it is.[0]" Food creation & delivery: A hyper competitive, low margin, inventory rotting, regulated, logistical & insurance nightmare.
- bilekas 6y ago
  Gig workers don't hate how its set up, they make a nice bit of cash for hard work when they need or want. Restaraunts don't hate it because they don't have to have staff hired to deliver, infact all the logistics of delivery are removed for them. > The San Francisco-based company reported a fourth-quarter loss of $312 million Excuse me while I shed a tear for the billion eur company over the riders who will get screwed for this ruling. DoorDash's business management is not reflective of its customers, who are the riders and restaurants. Who, in this scenario are the losers.
  - InitialLastName 6y ago
    Under a dumping accusation, their competitors are the victims here. Operating at a substantial loss as a strategy to expand your market footprint is pretty textbook anticompetitive.
    - bilekas 6y ago
      I'm sorry but why are competitors not allowed throw money away beating out the other imitators ? > Operating at a substantial loss as a strategy to expand your market footprint is pretty textbook anticompetitive. No it's not actually. That would entice people with a better twist on the idea to do things differently. Regardless of both our ignorance of market philosophy. The riders will get screwed here. I'm not gonna applaud the debt of companies like Deliveroo, Ubereats, JustEat etc etc being shafted to riders long term. Bravo
- readflaggedcomm 6y ago
  At what point do hundreds of millions of dollars in operating losses begin to constitute "dumping," where a product (service in this case) is priced below its cost in order to accumulate market share and harm competitors? Other comments mention that delivery "worked fine" before, which implies DoorDash can't argue that they were perfectly innovative against a "dumping" accusation.
  - nradov 6y ago
    In legal terms "dumping" is only applicable to imports. There's generally nothing illegal about delivering a local service at a loss, except in limited cases when one company has an effective monopoly and uses that pricing to drive out competitors. For now the food delivery market is still highly competitive.
    - kqvamxurcagg 6y ago
      I don't think existing competition law or theory applies to this new phenomenon. The delivery companies are essentially selling at a loss to obtain an overwhelming network effect to become a long term monopoly.
    - bagacrap 6y ago
      in this case, Uber eats is importing foreign capital and "dumping" it into the system as subsidies to the consumer which are designed to establish a monopoly. They will either fail to establish a monopoly and close shop, or succeed and jack up prices. Whatever term you want to apply here, this doesn't seem like a business practice that should be permitted.
- oconnor663 6y ago
  I mean, speaking personally as a customer, I'm a pretty big fan of being able to search for food online and order it. When we're trying to figure out whether a market is broken, the question of whether customers are happy is a pretty important starting point. (But maybe I'm just a weirdo and everyone else who uses Yelp etc. is miserable?)
- cedricgle 6y ago
  The gig economy is just a return to the basics of the industrialization and the machine age; where people went to the factories' gates to seek a job for the day. During this period, such flexibility brought a huge boost in production, innovation and revenue. So this model isn't necessary broken.
  - deleted 6y ago
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- nullserver 6y ago
  Gig work and Airbnb saved my life and kept family off street. I got injured and disability decided to play hard ball. Working whatever hours I could be functional and being able to stop and rest, or wait for medication side effects to ease off. These are the only thing that kept us off the street.
  - lwkl 6y ago
    That's great but gig work is possible without false self-employment. Most European countries have laws for this. That's why you see articles like this. Eat operates similar to Uber Eats here while paying a higher wage than Uber Eats after they payed social security and provide a bike. Meanwhile Uber eats drivers have to pay social security and their vehicle from a lower wage. The social security is what keeps them off the street in the case they are out of work or disabled. Why are some people defending companies that try to go around existing labor laws by claiming their employees are different contractors just because everything is done over an app? Luckily our laws are relatively clear and the courts will probably keep on ruling against Uber.
    - nullserver 6y ago
      If you can get on disability. I was in bed 16 hours a day nearly blind and extreme agony for nearly a year. Disability laughed at me. Said I had a desk job so it was fine, all I had to do was sit their.
  - bigiain 6y ago
    I'm glad that worked out for you, but having VC backed SV Unicorns become _the_ social safety net seems very wrong to me.
  - Jochim 6y ago
    I'm glad you managed to stay afloat through gig work but this example really seems to point out that it's prevalence is due to failing social systems (job market/safety nets) driving people into insecure forms of work.
- jpdaigle 6y ago
  I'm kinda surprised that food delivery apps and ride-hailing apps are all money-losing. Why? It's a modernization of an already-proven business model. Chinese food and pizza was orderable by phone, and delivered for free or a small fee, 30 years ago. So, the pizza restaurants proved that there's enough margin in a 25$ pizza to pay a minimum wage driver to drive it to your house. Delivery platforms come in and break this up: instead of the restaurant having someone on payroll to deliver orders, you just outsource that to another party (and pay them a fee, which is passed-through to the customer, and replaces money you would've paid the on-staff driver otherwise). Why can't the food delivery companies provide delivery services for basically the same total cost as before, and subsist on extracting a small percentage of the value, which is freed up by the massive economy of scale that they can create by aggregating orders from several restaurants into a single pool? Ditto for Uber... it's possible to operate a taxi company profitably, and has been for a hundred years. Shouldn't Uber have basically the same economics / cost per mile as a traditional taxi company, except be more efficient thanks to top-notch demand prediction that no local taxi company could ever build?
  - bpicolo 6y ago
    Managing an enterprise doing it at scale requires a larger-than-small percentage of revenue. Catch 22. Also note that plenty of delivery workers have, historically, been paid under-the-table. Can't get away with that if you're uber
    - ghaff 6y ago
      And deliveries were historically mostly for a small class of food items where it made sense--mostly pizza and Chinese--for various reasons.
      - bpicolo 6y ago
        I definitely don't understand the demand for soggy fries and burgers at 60% upcharge, but to each their own ;)
        6y ago
- deleted 6y ago
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- Aunche 6y ago
  How many restaurant owners and delivery gig workers do you know? From my (admittedly very limited) experience long-term gig workers have a "system" that tends to work well enough for them, though they're not so successful that you'd hear about it on the news.
  - cwhiz 6y ago
    Everything is anecdotal. I live in NYC and I talk to restaurants, or I used to before the pandemic. I know the owner of this restaurant, and he absolutely hates these delivery companies. He’s not alone. https://ny.eater.com/2020/4/23/21231943/grubhub-nyc-phone-order-expat-harlem-charges https://ny.eater.com/2020/4/23/21231943/grubhub-nyc-phone-or...
- tgsovlerkhgsel 6y ago
  > The gig workers hate it ... but for some reason they keep doing it. Also, I assume the consumer is very happy that he's getting a venture capital subsidized food delivery service.
nodesocket 6y ago
Yet another cash grab on technology companies by a EU country. Perhaps instead of driving companies out of the EU and then slapping them with random fines and regulation they should consider reforming their laws to be more business friendly.
- onli 6y ago
  Those are not technology companies. They are logistic companies with some IT integration. And it's a bit different than with Uber: There, a lot of the resistance was indeed to protect a monopoly that was bad for customers. But food delivery? That worked just fine before those companies arrived.
  - rightbyte 6y ago
    Taxi worked too. The way too capped supply taxi market is a US problem.
  - arsome 6y ago
    > But food delivery? That worked just fine before those companies arrived. Depends where you live, for me, it worked for pizza and that's about it. I was unable to get pretty much anything else delivered locally, now I've got a few dozen options. Most restaurants just wouldn't bother hiring additional staff to do delivery. Even big chain fastfood places like Subway and McDonalds weren't available for delivery here before Uber Eats picked them up.
- _jal 6y ago
  They are hardly the first companies to play regulatory chicken. It pays off nicely if you win; I do wish that sophisticated investors and managers who make a bad bet would whine less.
aneutron 6y ago
I really can't make up my mind. On the one hand, it's truly unhealthy for the overall job security and the social construct (which is normal given it's modelled after the US). But on the other hand, it would have been a fucking travesty doing a lockdown without ordering on Uber eats and Co. And those platforms were the innovators in the space. Restaurants who could develop similar platforms would have never allocated the money, and others who would never have had the opportunity to offer such services, would have never tapped the overall market (i.e. People with Internet who are hungry and need food for any reason, be it no groceries or just laziness). Can't there be some sort of middle ground ?
- bilekas 6y ago
  No.. This is not a good idea. Sure there is merit to them being "coordinated and continuous workers", I can see the argument for that regardless of the gig economy. But having to back-pay the taxes for said workers is close to extortion. My Middle ground would be a mediator instead of an ultimatum. > Should the platforms hire all 60,000 couriers, there's a high price to pay to catch up on previous, missed social security payments, said European labor law specialist Luca de Vecchi. Social security contributions in Italy can amount to up to 33 percent of an employee's salary and must be paid by the employer. This is just crazy.. How can the government expect a company to backpay what the government allowed in the past ? This is wrong.
  - jdsully 6y ago
    If you wrongly classify an employee as a contractor the IRS will go after you for back payroll taxes. It's not extortion, its collecting taxes you illegally avoided.
    - bilekas 6y ago
      Think about what you just said.. If it was okay to be classed as a contractor in FY2018, then the legislative said no you need to backpay. FY2018 is no longer valid.. Even though, they approved it, IRS accepted. See my point ? You cant retrospectively change the status of their work status. You didn't wrongly state your status at the time..
VWWHFSfQ 6y ago
Why these companies do business in the EU at all is beyond me.
- jimnotgym 6y ago
  Why these companies try to force EU workers to work under US labour laws is not beyond me.
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- TrackerFF 6y ago
  Correct. If skirting around labor laws is part of your business model, Europe is not the place to do business.
- lwkl 6y ago
  Yes I hope they get kicked out of Europe. We have no need for companies that want to get around our employment laws and don't pay social security. That's parasitic behavior. In the end society has to pay the long-term cost for their short-term gain.
tppiotrowski 6y ago
> If the companies pay the fines within 90 days, they will be able to avoid criminal proceedings If they prosecute UberEats, who exactly would be the one serving prison time?
- madeofpalk 6y ago
  They have local employees. Probably like the regional MD or something.
onetimemanytime 6y ago
We need to understand that different countries have different laws and especially attitudes. What might be called a cute "hack" in USA, in other countries will land you in jail and /or facing crippling fines. EU in general is a lot more "worker friendly" than USA
anm89 6y ago
I applaud Italy for taking an aggressive stance as long as they are sure of what they are doing. I think very well this might come and bite them in the ass and I certainly won't feel sympathy for them if it does. However, if they can use this as a tool to bargain for better and more equitable arrangements and turn it into something sustainable , more power to them.
srg0 6y ago
It's not only about employment of the 60 thousand de facto workers. This is about tax evasion through systematic lack of employment contracts. In Italy employers are responsible for paying a number of taxes and contributions on behalf of and for their employees. Some of them are not even counted towards the wage. So not only the employees who are getting exploitative treatment, but the state doesn't get pension fund contributions, and regional and city taxes are not paid af all. Given that all other businesses pay these taxes, it's only fair that gig economy startups pay theirs.

132 points by Svip 6y ago

good. I hope doordash and the other delivery platforms get fined a lot of money. :)

Meanwhile, these companies can't make any money as it is.[0] At some point maybe we should consider that this model is completely broken. The gig workers hate it, the restaurants hate it, and the delivery companies can't make a profit. What in the fresh hell are we doing where nearly every part of this "economy" is mad about it? [0]: https://www.marketwatch.com/story/doordash-shares-sink-as-revenue-more-than-triples-but-loss-more-than-doubles-11614289424?mod=mw_latestnews&mod=home-page https://www.marketwatch.com/story/doordash-shares-sink-as-re...

jimbob45 6y ago
Kudos to the legislators for allowing the experiment to run as long as it did to find potential solutions. Now it’s time to legislate it away, just like many have done with Uber/Lyft.
bpodgursky 6y ago
Someone should let the gig workers know! I bet they'd quit if they knew how miserable they were.
- z3rgl1ng 6y ago
  Dope take.
- deleted 6y ago
  [deleted]
- _Microft 6y ago
  Did it occur to you that some people could be in situations where they simply cannot quit a job no matter how miserable it makes them?
  - hsgdh3487 6y ago
    It probably did occur to GP, that's the whole point (if I'm right to be charitable). Top comment is arguing that these people should be laid off as part of a government initiative to reshape the economy. If these people can't quit, what will happen if they are laid off? Is there any policy that could help these workers? My best guess is UBI, but that is another discussion.
    - bpodgursky 6y ago
      I would be more charitable to calls to destroy the gig industry if the proposals were coupled with any realistic path to retraining or alternatively-employing the employees. When the comment is just "this job should not exist" I just know there's no intellectual consistency behind it. They want to punish employers they don't like, and don't especially care who is hurt in the process.
  - jdminhbg 6y ago
    That's going to be bad news when it gets legislated away then, isn't it.
    - MereInterest 6y ago
      The solution to a race to the bottom, or to other kinds of prisoner's dilemma, is frequently to outlaw the option of racing to the bottom. Healthy bread can't compete because bread with sawdust is cheaper? Outlaw adding sawdust to the bread. Environmentally conscious factories can't compete because it is cheaper to pollute? Outlaw polluting to make a level playing field. Companies that pay their workers a living wage cannot compete with those who don't? Outlaw paying workers below a living wage, so that companies paying a living wage can compete. In this case, I'd also want to see some form of UBI.
- Narkov 6y ago
  I don't know you circumstances but it is possible to still do something out of desperation - possibly to feed your family - and hate it.
  - recursive 6y ago
    So in that hypothetical scenario, would that person be better or worse off if they were denied the option to do that thing they're doing that they hate?
    - Narkov 6y ago
      Worse off. Feeding their family is probably a higher priority than a shitty job. It doesn't change the fact that the job is rubbish.
- srswtf123 6y ago
  On the off chance you’re unfamiliar with the term, I suggest you learn about wage slavery. https://en.m.wikipedia.org/wiki/Wage_slavery https://en.m.wikipedia.org/wiki/Wage_slavery
  - bpodgursky 6y ago
    That sounds bad! It sounds almost as bad as unemployment slavery, or homelessness slavery!
    - freeone3000 6y ago
      Yes, exactly. People shouldn't need money to live.
- cwhiz 6y ago
  Lots of people do jobs that they hate. It’s common in practically every industry.
tiborsaas 6y ago
I think drones will save them. Can't wait to spend a romantic dinner in a small restaurant with my girlfriend and watch the delivery drones come and go, humming around us.
- deleted 6y ago
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- steelframe 6y ago
  > Can't wait to spend a romantic dinner in a small restaurant with my girlfriend and watch the delivery drones come and go, humming around us. I honestly can't tell if this is sarcasm.
programbreeding 6y ago
I'm not saying this is a reason to do it, but the part of the model that isn't broken is that people love it. The consumers are benefiting.
- floren 6y ago
  Yes, people love getting stuff cheap. But if, say, an auto shop was offering cheap oil changes because they're just dumping the used oil down the sewer instead of properly disposing of it, "people like cheap oil changes" isn't justification for the continued harm.
  - standardUser 6y ago
    Tell that to nearly the entirety of the global textile, chemical and energy industries (to name a few). Causing harm is not, nor has it ever been, a deterrent to operating a business.
    - bobthepanda 6y ago
      No, but losing money on every transaction (or the majority of them) certainly is. In that sense, food delivery apps smell a lot like Moviepass. Customer love was not enough to save Moviepass, though it certainly didn't help that the actions they took to turn it around burned through all that goodwill in very short order.
    - floren 6y ago
      Sure! But "other industries do bad things too" does not excuse these companies doing bad things. The Italian government can't do much when a Chinese factory pours chemical waste into the ocean. They can stop Uber Eats from screwing over Italian delivery drivers.
- ghaff 6y ago
  There are tons of services I would use if I could get them for well below cost.
PragmaticPulp 6y ago
> What in the fresh hell are we doing where nearly every part of this "economy" is mad about it? We're at the point in the hype cycle where the service has become popular, so the media has flipped to the contrarian takes about how it's bad, actually. It wasn't that long away that we were reading stories about how food delivery services were providing restaurants an opportunity to keep their doors open during COVID lockdown. Restaurants only hate food delivery when the companies try to force them to lower prices (so the delivery service can capture the margin) or when they perform bad-faith actions like misrepresenting themselves as an official partner of the restaurant when no such deal has been made. The restaurants who simply prepare orders at their normal retail price and hand them off to delivery drivers who deliver to customers who know what they're getting into are actually loving this boom. It's extra business without the hassle of dealing directly with customers. That's actually the driver of the problems: Restaurants have been so eager to get a piece of this booming business that some of them have given up their own margin to partner with delivery services looking to squeeze every dollar out of the restaurants. I suspect that era won't last long as restaurants do the math on what it's costing them.
- kgog 6y ago
  > It wasn't that long away that we were reading stories about how food delivery services were providing restaurants an opportunity to keep their doors open during COVID lockdown. Can you link to some stories? I didn't see any in my bubble.
- LegitShady 6y ago
  >That's actually the driver of the problems: Restaurants have been so eager to get a piece of this booming business that some of them have given up their own margin to partner with delivery services looking to squeeze every dollar out of the restaurants. I suspect that era won't last long as restaurants do the math on what it's costing them. They don't have a choice, with covid etc. Many restuarants would rather not have delivery, or delivery that didn't cost them 20% of gross.
  - nickff 6y ago
    Most restaurants would rather not pay rent/lease and property taxes that eat more than 20% of gross, yet those are recognized as 'costs of doing business'. These restaurants are unfortunately locked in to a business model that is incompatible with COVID.
ransom1538 6y ago
" Meanwhile, these companies can't make any money as it is.[0]" Food creation & delivery: A hyper competitive, low margin, inventory rotting, regulated, logistical & insurance nightmare.
bilekas 6y ago
Gig workers don't hate how its set up, they make a nice bit of cash for hard work when they need or want. Restaraunts don't hate it because they don't have to have staff hired to deliver, infact all the logistics of delivery are removed for them. > The San Francisco-based company reported a fourth-quarter loss of $312 million Excuse me while I shed a tear for the billion eur company over the riders who will get screwed for this ruling. DoorDash's business management is not reflective of its customers, who are the riders and restaurants. Who, in this scenario are the losers.
- InitialLastName 6y ago
  Under a dumping accusation, their competitors are the victims here. Operating at a substantial loss as a strategy to expand your market footprint is pretty textbook anticompetitive.
  - bilekas 6y ago
    I'm sorry but why are competitors not allowed throw money away beating out the other imitators ? > Operating at a substantial loss as a strategy to expand your market footprint is pretty textbook anticompetitive. No it's not actually. That would entice people with a better twist on the idea to do things differently. Regardless of both our ignorance of market philosophy. The riders will get screwed here. I'm not gonna applaud the debt of companies like Deliveroo, Ubereats, JustEat etc etc being shafted to riders long term. Bravo
readflaggedcomm 6y ago
At what point do hundreds of millions of dollars in operating losses begin to constitute "dumping," where a product (service in this case) is priced below its cost in order to accumulate market share and harm competitors? Other comments mention that delivery "worked fine" before, which implies DoorDash can't argue that they were perfectly innovative against a "dumping" accusation.
- nradov 6y ago
  In legal terms "dumping" is only applicable to imports. There's generally nothing illegal about delivering a local service at a loss, except in limited cases when one company has an effective monopoly and uses that pricing to drive out competitors. For now the food delivery market is still highly competitive.
  - kqvamxurcagg 6y ago
    I don't think existing competition law or theory applies to this new phenomenon. The delivery companies are essentially selling at a loss to obtain an overwhelming network effect to become a long term monopoly.
  - bagacrap 6y ago
    in this case, Uber eats is importing foreign capital and "dumping" it into the system as subsidies to the consumer which are designed to establish a monopoly. They will either fail to establish a monopoly and close shop, or succeed and jack up prices. Whatever term you want to apply here, this doesn't seem like a business practice that should be permitted.
oconnor663 6y ago
I mean, speaking personally as a customer, I'm a pretty big fan of being able to search for food online and order it. When we're trying to figure out whether a market is broken, the question of whether customers are happy is a pretty important starting point. (But maybe I'm just a weirdo and everyone else who uses Yelp etc. is miserable?)
cedricgle 6y ago
The gig economy is just a return to the basics of the industrialization and the machine age; where people went to the factories' gates to seek a job for the day. During this period, such flexibility brought a huge boost in production, innovation and revenue. So this model isn't necessary broken.
- deleted 6y ago
  [deleted]
nullserver 6y ago
Gig work and Airbnb saved my life and kept family off street. I got injured and disability decided to play hard ball. Working whatever hours I could be functional and being able to stop and rest, or wait for medication side effects to ease off. These are the only thing that kept us off the street.
- lwkl 6y ago
  That's great but gig work is possible without false self-employment. Most European countries have laws for this. That's why you see articles like this. Eat operates similar to Uber Eats here while paying a higher wage than Uber Eats after they payed social security and provide a bike. Meanwhile Uber eats drivers have to pay social security and their vehicle from a lower wage. The social security is what keeps them off the street in the case they are out of work or disabled. Why are some people defending companies that try to go around existing labor laws by claiming their employees are different contractors just because everything is done over an app? Luckily our laws are relatively clear and the courts will probably keep on ruling against Uber.
  - nullserver 6y ago
    If you can get on disability. I was in bed 16 hours a day nearly blind and extreme agony for nearly a year. Disability laughed at me. Said I had a desk job so it was fine, all I had to do was sit their.
- bigiain 6y ago
  I'm glad that worked out for you, but having VC backed SV Unicorns become _the_ social safety net seems very wrong to me.
- Jochim 6y ago
  I'm glad you managed to stay afloat through gig work but this example really seems to point out that it's prevalence is due to failing social systems (job market/safety nets) driving people into insecure forms of work.
jpdaigle 6y ago
I'm kinda surprised that food delivery apps and ride-hailing apps are all money-losing. Why? It's a modernization of an already-proven business model. Chinese food and pizza was orderable by phone, and delivered for free or a small fee, 30 years ago. So, the pizza restaurants proved that there's enough margin in a 25$ pizza to pay a minimum wage driver to drive it to your house. Delivery platforms come in and break this up: instead of the restaurant having someone on payroll to deliver orders, you just outsource that to another party (and pay them a fee, which is passed-through to the customer, and replaces money you would've paid the on-staff driver otherwise). Why can't the food delivery companies provide delivery services for basically the same total cost as before, and subsist on extracting a small percentage of the value, which is freed up by the massive economy of scale that they can create by aggregating orders from several restaurants into a single pool? Ditto for Uber... it's possible to operate a taxi company profitably, and has been for a hundred years. Shouldn't Uber have basically the same economics / cost per mile as a traditional taxi company, except be more efficient thanks to top-notch demand prediction that no local taxi company could ever build?
- bpicolo 6y ago
  Managing an enterprise doing it at scale requires a larger-than-small percentage of revenue. Catch 22. Also note that plenty of delivery workers have, historically, been paid under-the-table. Can't get away with that if you're uber
  - ghaff 6y ago
    And deliveries were historically mostly for a small class of food items where it made sense--mostly pizza and Chinese--for various reasons.
    - bpicolo 6y ago
      I definitely don't understand the demand for soggy fries and burgers at 60% upcharge, but to each their own ;)
      - 6y ago
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Aunche 6y ago
How many restaurant owners and delivery gig workers do you know? From my (admittedly very limited) experience long-term gig workers have a "system" that tends to work well enough for them, though they're not so successful that you'd hear about it on the news.
- cwhiz 6y ago
  Everything is anecdotal. I live in NYC and I talk to restaurants, or I used to before the pandemic. I know the owner of this restaurant, and he absolutely hates these delivery companies. He’s not alone. https://ny.eater.com/2020/4/23/21231943/grubhub-nyc-phone-order-expat-harlem-charges https://ny.eater.com/2020/4/23/21231943/grubhub-nyc-phone-or...
tgsovlerkhgsel 6y ago
> The gig workers hate it ... but for some reason they keep doing it. Also, I assume the consumer is very happy that he's getting a venture capital subsidized food delivery service.

nodesocket 6y ago

Yet another cash grab on technology companies by a EU country. Perhaps instead of driving companies out of the EU and then slapping them with random fines and regulation they should consider reforming their laws to be more business friendly.

onli 6y ago
Those are not technology companies. They are logistic companies with some IT integration. And it's a bit different than with Uber: There, a lot of the resistance was indeed to protect a monopoly that was bad for customers. But food delivery? That worked just fine before those companies arrived.
- rightbyte 6y ago
  Taxi worked too. The way too capped supply taxi market is a US problem.
- arsome 6y ago
  > But food delivery? That worked just fine before those companies arrived. Depends where you live, for me, it worked for pizza and that's about it. I was unable to get pretty much anything else delivered locally, now I've got a few dozen options. Most restaurants just wouldn't bother hiring additional staff to do delivery. Even big chain fastfood places like Subway and McDonalds weren't available for delivery here before Uber Eats picked them up.
_jal 6y ago
They are hardly the first companies to play regulatory chicken. It pays off nicely if you win; I do wish that sophisticated investors and managers who make a bad bet would whine less.

aneutron 6y ago

I really can't make up my mind. On the one hand, it's truly unhealthy for the overall job security and the social construct (which is normal given it's modelled after the US). But on the other hand, it would have been a fucking travesty doing a lockdown without ordering on Uber eats and Co. And those platforms were the innovators in the space. Restaurants who could develop similar platforms would have never allocated the money, and others who would never have had the opportunity to offer such services, would have never tapped the overall market (i.e. People with Internet who are hungry and need food for any reason, be it no groceries or just laziness). Can't there be some sort of middle ground ?

bilekas 6y ago
No.. This is not a good idea. Sure there is merit to them being "coordinated and continuous workers", I can see the argument for that regardless of the gig economy. But having to back-pay the taxes for said workers is close to extortion. My Middle ground would be a mediator instead of an ultimatum. > Should the platforms hire all 60,000 couriers, there's a high price to pay to catch up on previous, missed social security payments, said European labor law specialist Luca de Vecchi. Social security contributions in Italy can amount to up to 33 percent of an employee's salary and must be paid by the employer. This is just crazy.. How can the government expect a company to backpay what the government allowed in the past ? This is wrong.
- jdsully 6y ago
  If you wrongly classify an employee as a contractor the IRS will go after you for back payroll taxes. It's not extortion, its collecting taxes you illegally avoided.
  - bilekas 6y ago
    Think about what you just said.. If it was okay to be classed as a contractor in FY2018, then the legislative said no you need to backpay. FY2018 is no longer valid.. Even though, they approved it, IRS accepted. See my point ? You cant retrospectively change the status of their work status. You didn't wrongly state your status at the time..

VWWHFSfQ 6y ago

Why these companies do business in the EU at all is beyond me.

jimnotgym 6y ago
Why these companies try to force EU workers to work under US labour laws is not beyond me.
- deleted 6y ago
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TrackerFF 6y ago
Correct. If skirting around labor laws is part of your business model, Europe is not the place to do business.
lwkl 6y ago
Yes I hope they get kicked out of Europe. We have no need for companies that want to get around our employment laws and don't pay social security. That's parasitic behavior. In the end society has to pay the long-term cost for their short-term gain.

tppiotrowski 6y ago

> If the companies pay the fines within 90 days, they will be able to avoid criminal proceedings If they prosecute UberEats, who exactly would be the one serving prison time?

madeofpalk 6y ago
They have local employees. Probably like the regional MD or something.

onetimemanytime 6y ago

We need to understand that different countries have different laws and especially attitudes. What might be called a cute "hack" in USA, in other countries will land you in jail and /or facing crippling fines. EU in general is a lot more "worker friendly" than USA

anm89 6y ago

I applaud Italy for taking an aggressive stance as long as they are sure of what they are doing. I think very well this might come and bite them in the ass and I certainly won't feel sympathy for them if it does. However, if they can use this as a tool to bargain for better and more equitable arrangements and turn it into something sustainable , more power to them.

srg0 6y ago

It's not only about employment of the 60 thousand de facto workers. This is about tax evasion through systematic lack of employment contracts. In Italy employers are responsible for paying a number of taxes and contributions on behalf of and for their employees. Some of them are not even counted towards the wage. So not only the employees who are getting exploitative treatment, but the state doesn't get pension fund contributions, and regional and city taxes are not paid af all. Given that all other businesses pay these taxes, it's only fair that gig economy startups pay theirs.