Foodora's Canadian Exit: Profiteers choose money over workers
Delivery Hero CEO Niklas Ostberg (Handelsblatt/Google Images)
Written by: Daniel Xie
Recently, the app-based food delivery service Foodora has announced that they will be ceasing operations in Canada starting in May 11. They cited difficulties in competing with the market in Canada and reach a satisfactory level of “profitability”. The company has given no information about how it will provide any support to its employees in this period, other than claiming that employees will “continue to be paid as stipulated in their contractual agreements.”
It may initially appear that Foodora is closing down its Canadian branch because of a perceived inability to compete with other companies. However, there is something much more sinister going on, beneath the rather dubious claims that Foodora due to an over-saturated market.
These sinister going-ons are tied to the company’s efforts to fight the efforts of Foodora workers in organizing for better working conditions, work protection, wages, and various other benefits. Foodora workers sought to achieve these benefits through unionization. On February 25, 2020, the Ontario Labour Relations Board determined that Foodora workers could unionize; the decision to close up shop in Canada came just little over two months from that ruling.
Foodora workers launched their efforts to unionize on May Day 2019, seeking union recognition, along with health benefits and fair pay for couriers. Every step of the way, Foodora has fought efforts by it’s workers to unionize using an assortment of dirty tricks. In response to Foodora workers plastering the city with posters promoting a vote for unionization, Foodora deployed misinformation. This included spamming couriers with messages on mobile linking to an anti-union website, deploying misleading claims that unionization leading to overbearing union dues and supposedly affecting “flexibility in scheduling”; presumably a thinly-veiled threat deployed by Foodora to reduce the shifts of anyone involved in a union.
With the help of the Canadian Union of Postal Workers, a unionization vote was held that was objected to by Foodora, which claimed that its couriers were not eligible for unionization. They did this on the supposed basis that couriers were neither employees nor dependent contractors, but rather independent contractors. Foodora couriers argued, in response, that they have shifts, are obligated to do specific tasks on the job, their employers can fire them and determine how many shifts they can take. All of which demonstrate that Foodora couriers are not “independent contractors”, despite what Foodora claimed.
Foodora subsequently challenged unionization efforts by appealing to the Ontario Labour Relations Board using the above claims that they made about Foodora workers not being eligible for unionization due to supposedly being “independent contractors”. The company deliberately stretched out this case for many months in order to weaken the momentum generated in support of unionization. This momentum even inspired other gig workers such as Uber drivers working for food delivery companies to seek unionization with United Food and Commercial Workers. Finally, after six months, the OLRB made its ruling in response to Foodora’s challenge that Foodora couriers were dependent contractors eligible to unionize.
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The success of Foodora workers in securing their right to unionize was a watershed moment in the development of the gig economy in Canada, as it was the first time that Canadian gig workers took steps in working towards the formation of a union. According to Kevin Matthews of CUPW, Foodora couriers securing their right to unionize following the OLRB ruling clears a significant hurdle to the rights of workers. The hurdle being the claim that gig workers such as those in Foodora are independent contractors, ineligible to create labour unions.
This in turn allows for gig workers in various businesses to follow in the footsteps of Foodora couriers. Matthews also cites how the fight of Foodora couriers for unionization has brought the conditions faced by gig workers into the spotlight, subsequently leading to calls for better regulation of the gig economy and recognition of the rights of gig workers.
Some of the issues Foodora couriers faced that were raised by their efforts to form an union include:
The poor working conditions faced by Foodora couriers when on the job, along with the lack of a minimum wage and health care benefits.
Through using the excuse of their workers as independent contractors, Foodora can refuse to both pay workers a minimum wage as well as provide them with any health care benefits. With regards to wages, Foodora workers make $4.50 per order and $1 per kilometre travelled, while their company receives up to 30% of the order’s total. With regards to healthcare benefits, Foodora does not offer any health insurance for employees, with employees that call in sick losing wages, and most likely being at risk of getting fired with no opportunity to apply for employment insurance.
In addition, Foodora couriers often, in fulfilling orders sent to them by those ordering food, often have to ride at unsafe speeds or flaunt traffic laws in order to deliver food on time. The company provides little protection or safety measures in place allowing workers to avoid or refuse unsafe orders. In fact, if one takes time off or doesn't want to take a shift for safety concerns, there is a risk that the workers could be given less shifts. This puts workers into positions where they have to accept shifts as often and as early as possible, even if the risk of unsafe work is a present danger.
Despite the OLRB ruling that Foodora couriers were not independent contractors, Foodora, as revealed in the Canada Files’ interview with Foodora union organizer Ivan Ostos, took measures to prevent a union from emerging. Foodora claimed that the couriers seeking to create a union didn’t account for 40 per cent of the vote needed to enact unionization. They brought up employee lists consisting of managers and employees who haven’t worked shifts in months, in order to justify blocking the creation of a union. This being despite the fact that if one worked one or two months prior to the vote on unionization, their vote should count towards unionization.
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The recent closing down of operations in Canada has led to accusations of union busting hurled at Foodora and its German-based parent company, Delivery Hero. In response to this, the Canadian Union of Postal Workers filed an unfair labour practices complaint against Foodora. CUPW was accusing it of violating Ontario labour laws in carrying out an “anti union” action, in closing down just when their workers are on the cusp of organizing into a union.
According to Ostos, Foodora may have indeed closed operations in Canada rather than due to an insidious plan of union busting; citing how Foodora allowed unions to operate in the Nordic countries. Rather, Foodora is planning to leave because they legitimately did face stiff competition from various Canadian food delivery services. Ostos was skeptical of the possibility that this closing down was part of a broader conspiracy to nip the formation of a union in the bud. However, the very fact that Foodora is willing to leave Canada and its workers unemployed, to Ostos, signifies just how “sick” companies such as Foodora are. If they do not have the most share of the profit, they would simply relocate somewhere else with less competition and potentially more exploitable labour. Even if it means leaving large number of people that formerly worked for them unemployed all so they could make more money elsewhere.
What Foodora’s closure in Canada demonstrates is that companies ultimately value profit about all else. Regardless of whether Foodora deliberately closed its operations in Canada as a spiteful last attempt at union-busting, or if it closed its operations in Canada because it can’t make a profit, it has chosen to put it’s profits above the livelihoods of its workers. They will be left behind, unemployed, in the uncertainty of a pandemic that has already resulted in many being unemployed, as companies downsize in response to lockdown and quarantine measures.
In his interview with the Canada Files, Ostos and the rest of the union organizers are planning on fighting to reverse Foodora’s decision through calling for boycotts of their services. They are also seeking to pressure the provincial and federal governments to change the currently existing labour legislation to make it easier to form unions. They are also exerting pressure on our provincial MPPs and federal MPs in order to push for labour reform that would take away many of the obstacles preventing employees in the gig economy and everywhere else.
The efforts of Foodora couriers to fight for unionization has brought to public attention the injustices faced by gig workers in the low-wage gig economy, injustices that the companies running the gig economy would rather have continue then abate. With the right strategy and tactics, the efforts of Foodora couriers may result in the foundation for an alternative to the profit-driven food delivery system of greedy companies such as Foodora.
In response to Foodora pulling out of Canada, Ostos has suggested the idea of forming a food-based worker cooperative benefiting both food couriers and restaurants. They are already getting in touch with other co-ops to share ideas and strategize regarding building a worker cooperative to replace Foodora. Such an endeavour, as Lee Carter suggested in his article The Professional Revolution, could potentially lead to the creation of an alternative to capitalism.
This could happen if co-operatives were organized with the goal of reaching out to activists and workers, to build worker-power on a societal level. Such an endeavour would perhaps take years to accomplish, but through endeavours such as the efforts of Foodora couriers to establish a cooperative replacing Foodora’s operations in Canada, the first stone in building a means for workers to take control of their workplaces everywhere might just be on the distant horizon.
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