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Food Delivery Apps: Last Week Tonight with John Oliver | Transcript

John Oliver discusses the downsides of food delivery apps, Donald Trump’s latest attempt to pay off his legal debts, and why one southern California police department got in trouble with Lego.
Food Delivery Apps: Last Week Tonight with John Oliver

Last Week Tonight with John Oliver
Season 11 Episode 6
Aired on March 31, 2024

Main segment: Food delivery apps
Other segments: Initial public offering of Truth Social, Lego head mugshots released by the Murrieta, California Police Department.

In a segment dripping with his signature blend of sarcasm and sharp wit, John Oliver tackled the shadowy world of food delivery apps on Last Week Tonight, with GrubHub taking a starring role in the theater of the absurd. These apps, marketed as the saviors of our pandemic-era dining dilemmas, have morphed into vampiric entities, feasting on the livelihoods of restaurants and delivery workers alike, all while peddling the convenience of a world where your pad Thai arrives at the tap of an app. GrubHub, with its “family-saving” facade, was spotlighted for its predatory practices—extracting exorbitant fees from restaurants, sometimes gobbling up to 58% of their earnings, and engaging in shady practices like listing establishments without consent, sometimes even declaring them closed on their platform to divert business. This gastronomic gig economy, painted as a flexible paradise for workers, often leaves them shouldering hefty expenses and at the mercy of inscrutable algorithms, all for the privilege of dodging traffic and the elements to deliver our whimsical orders. And despite the seemingly bottomless pit of venture capital keeping these apps afloat, none seem to have cracked the code to profitability, leaving us to wonder who truly benefits from this delivery drama.

* * *

JOHN: Welcome, welcome, welcome to Last Week Tonight. I’m Joh Oliver. Thank you so much for joining us. It has been a busy week, from a massive bridge collapse in Baltimore to Sam Bankman-Fried getting sentenced to 25 years in prison. Are these two events related? Experts say no, but given enough time, morons can find a path to “maybe.” And in California, this happened:

After receiving a request by The Lego Company, the Murrieta Police Department has agreed to stop altering their mugshot photos with Lego.

JOHN: Well, that is shocking for a number of reasons: one, that they were doing it, and two, that Lego was mad at them, because it is one of the most pro-cop toy franchises I’ve ever seen. It’s not just the Lego police station; there’s the Lego police car and helicopter, the police training academy, the police mobile crime lab truck, the police bike and car chase sets, the Mobile Police Dog Training Center, and, of course, Lego Prison Island. In fact, if I were someone at Lego (and, common misconception, I’m actually not—stop asking—we are cousins), I’d have just pretended that Murrieta PD’s actions were part of a viral marketing stunt promoting the all-cop dystopia Lego’s clearly trying to dream into existence.

Now, the reason they were obscuring arrest photos with Lego heads has to do with a 2021 state law that generally prohibits local law enforcement from showing mug shots of people arrested for non-violent crimes, which makes sense, especially given an arrest doesn’t necessarily mean guilt. But instead of just stopping, the Murrieta Police opted to think outside the box for the dumbest possible reason.

At first, they started using emojis; even Shrek made an appearance in one post. So, why then use Lego heads?

A little fun, get some attention, you know—game the social media algorithms, generate some attraction, likes, follows, stuff like that.

JOHN: But that’s not the police’s job at all. There is a reason they have mottos like “to protect and serve” and not “to protect, serve, and get to 1 million followers. Please hit like and subscribe.”

And look, I could spend the rest of this show on Lego police misconduct, but instead, we’re going to turn to Donald Trump, who’s had a rough run in the courts lately. Between the E. Jean Carroll defamation judgment and New York State’s fraud case, he’s on the hook for over half a billion dollars. But even that doesn’t capture the full extent of the financial damage. Apparently, since leaving office, he’s spent more than $100 million on legal bills alone, which averages more than $90,000 a day, none of it paid for with his own money. In fact, a lot has come from his supporters because he’s repeatedly used his legal troubles as a pretext to ask for donations, including this plea on Tuesday:

“We’re fighting. We’re winning. You see what’s going on. So, whatever you can do to help financially would be fantastic because we have to beat it. If it’s $5, or $10, or $100, whatever you can do.”

JOHN: That is a man who talks nonstop about how he’s one of the richest men on Earth, begging strangers for money in a hostage video that looks like it was filmed in a house haunted by the world’s tackiest ghosts.

But pleading for cash isn’t his only fundraising tactic. He’s also been hawking new product lines, from a Trump Bible to Trump cologne, which comes in a bottle it looks like the award you give out for “Least.” To Trump sneakers, which, while saying nothing of how they look, aren’t even that comfortable. And the reason I know that is—no way, I’m not a fucking idiot. But, that is just the beginning. On the Trump Store website, you’ll find so much more, from the Trump mini speaker, which I assume is way too loud and never dies, to the gold Trump earbuds case, which does solve a pretty common issue. You know how you can never tell which AirPods are yours and which are your friends’ because all the cases look the same? Well, if you get these, you lose all your friends instantly. Problem solved.

But those products aren’t going to get him near the half a billion he needs. What might, though, is a development that took place this week regarding his social media site, Truth Social. It was created to basically be a right-wing version of Twitter, before Twitter essentially became that itself. And it’s a pretty clear ripoff: users have a profile, and they can follow one another, post “truths” or “retruths,” and ads are called “sponsored truths.” And that is just a deeply dystopian phrase. It sounds like something George Orwell typed into the first draft of 1984 before thinking, “That’s a little on the nose.”

Truth Social is owned by a company called TMTG, or Trump Media and Technology Group, and this week, the company started to be publicly traded under the ticker DJT, with shares blowing past expectations. Right now, it’s valued around $8 billion, and since Trump owns roughly 60% of the company, that gives him nearly $5 billion on paper. Although, according to SEC filings, he may not be able to cash that in for at least 6 months. But that value is utterly divorced from the underlying business, which is a mess. Truth Social was the brainchild of these two guys, both of whom were failed contestants on “The Apprentice.” In fact, when Trump got rid of this guy, he made abundantly clear how little he thought of him:

“Andy, you’re just being pounded on. You’re being out-debated. I just don’t want somebody running one of my companies that’s going to get beaten up so badly. You’re fired.”

JOHN: Now, I know that sounds harsh, but you should know the challenge in that episode was designing a new Pepsi bottle, and this is what his team came up with. It looks like a globe wearing a girdle. It looks like a trophy you win at the geography bee. It is the worst idea Pepsi has ever been associated with, and I’ll remind you, they had a commercial where Kendall Jenner used Pepsi to solve racism.

Incidentally, both those guys have since been pushed out of Truth Social after, as they claim in a lawsuit, Trump pressured one of them to hand over some of his shares to Melania. And you should know, the financials for the company are a wreck. It’s lost $57 million since its inception and won’t release user data, even though that’s the key metric for social media companies. It also had to refile its financial statements with the SEC after it put its revenue in the wrong line in an Excel spreadsheet.

Now, the site does sell some ads, or “sponsored truths,” but the only companies willing to do that are pretty much the ones you’d expect. They’ve been ads for a kids’ guide to fighting socialism, anti-woke life insurance, ivermectin, the official pillow of storming the Capitol, and this bear who recently lost custody of the twins. And one of the reasons they can’t get bigger advertisers may be because there just aren’t that many people on the platform to advertise to. Truth Social is estimated to have just under half a million monthly active users in the US on iPhones and Android devices, compared to 75 million on Twitter and 142 million on Facebook. But even that number is shrinking, as its monthly active users are less than half what they were a year ago. And yet, its stock is trading incredibly high because Trump supporters believe buying it is a way to simultaneously “own the libs,” give Trump money, and, they’d argue, make a profit themselves.

Here are two conservatives on a podcast gaming it all out:

“All of Trump’s supporters right now are going to buy the stock. They don’t need to donate to Trump because the purchase of a single share drives the value up. So, it’s an interestingly—I don’t know—it’s a way to help them indirectly. But it’s not just that. If someone bought, uh, if someone donated Trump 50 bucks, he would have that 50 bucks. But if someone buys the share, and millions of people are buying shares, it’s driving the price higher and higher. It may have a bigger impact. Trump could then offload a smaller portion of shares for a massive amount of money relative to what people actually bought shares for.”

JOHN: You’ve got to love dudes. Look, in a way, they’re right, though. Truth Social is basically a meme stock now, and its price has risen based on the same principle behind meme stocks like GameStop or AMC: if enough investors buy shares, they can drive the price up, and everyone can somehow get out before the bubble bursts. But the GameStop movement was at least nominally about wresting financial power away from the shitty rich assholes and restoring it to the little guy, whereas this movement is about funneling the little guy’s money directly to the shittiest rich asshole there is. And it’s been pushed the same way as other meme stocks, through social media posts like this one that says, “If you love America, buy DJT now,” or this one, reading “Stay calm and buy more DJT,” to my personal favorite, this one that promotes the stock alongside an eagle-shaped erection that jizzes glitter. Which makes sense, I suppose. Truth Social is kind of like a penis in that a lot of sad men on the internet spend their time lying about how big it is and what it can do for you.

Look, who knows exactly where this will go. Truth Social’s value could collapse when people realize they’ve poured billions of dollars into a potato with the word “social media” painted on it. Although, if that happens, I’m guessing Trump will have already cashed out, leaving his supporters holding the bag. But it’s also possible Trump becomes president again and holds on to the platform as a convenient way for companies and foreign interests to funnel money into his pockets, which they all know he needs.

But the bottom line here is this: this year more than ever, everything Trump does is going to be a cash grab. This year has brought one of the few times he’s actually been asked to pay the price for his actions, but already, he’s got other people footing the bill. He is monetizing his bad behavior in a way, perhaps best summed up by this T-shirt his campaign is selling for $36, with his mugshot and the words “not guilty.” And I’m afraid there is just no way to put a pretty face on that, short of maybe slapping a Lego head on it.

[…]

JOHN: Moving on, our main story tonight concerns food delivery—the thing that can turn a lethally depressing Saturday night into a lethally depressing Saturday night with pad Thai. Specifically, we’re going to talk about food delivery apps. You are probably familiar with them, whether you’re a user or a viewer of their constant ads featuring everyone from Jennifer Aniston to Big Bird, to this Uber Eats Super Bowl one starring none other than Diddy. And I’m guessing Uber Eats might be regretting that last one right now. They’ve even released ads for special occasions, like this:

“What are you eating this Pride? Well, if you’re a top, it seems like you can eat whatever you want. But if you’re a bottom, you’re expected to starve. Not this Pride. Introducing the bottom-friendly menu from Postmates.”

JOHN: That is a real ad for a bottom-friendly menu from Postmates, featuring an eggplant in leather fetish gear, looking like a character from VeggieTales who escaped their evangelical upbringing and found happiness. And by the way, it is good to see the peach from “Call Me by Your Name” staying booked and busy. Gay parts should go to gay actors. But even beyond unlisted sex diet tips, people use delivery apps for all sorts of reasons, and some very good. As this driver for DoorDash explains:

“It’s all sorts. It’s the average customer. It’s not like a bunch of lazy people. It’s a lot of people who need this because they’re too busy with kids, or they don’t have a license for whatever reason. People also, that are just drunk or stoned, and they don’t want to drive. They’re actually being responsible. And they don’t want to drive and get the food themselves, so I’ll deliver to them. You know, there’s plenty of times I’ll come to a door, and the door opens, and so much pot smoke will come from, and the person’s eyes are like super red. And I love that. I think that’s so funny. It’s like, some guy, he’s like college age, and he’s just like, ‘Oh, thank God the food’s here.’ “

JOHN: Yeah, I love that too. I know that might be hard to believe from me, someone who looks like he’s only ever confiscated weed, but I’m all about the sticky icky. I’m like Miss Piggy, the way I’m hitting that green. Even now, I’m as high as a giraffe’s ass and as spaced out as a ninth-grader’s essay, trying to meet the page limits. I get it, okay. But even if you are not stoned, these apps are incredibly convenient. And the truth is, if you weren’t using them before 2020, you almost definitely have since. Because early on in COVID, after in-person dining shutdown, their growth skyrocketed. Sales for delivery apps nearly doubled and haven’t gone down since. These apps basically have the kind of meteoric, pandemic-era rise that Skype absolutely thought they were in for. And what happened, Skype? You had it, and you lost it. We used to use ‘Skype’ as a verb to mean to video call someone, rather than what it means now: to completely fuck-up the easiest opportunity imaginable. The pandemic truly was a watershed moment for delivery apps, and they marketed themselves heavily as the saviors of the restaurant industry.

“Restaurants are our family, the cornerstone of our communities, and our family needs help right now. They’re facing a crisis and they’re counting on your takeout and delivery orders to help them through. Because if we don’t treat restaurants like family today, they might not be around to treat us like family tomorrow.” GrubHub, together we can help save the restaurants we love.”

JOHN: Wow, that hits all the checkmarks of every pandemic-era ad: soft, twinkly piano music? Check. An eclectic cross-section of races, ages, ethnicities, and genders? Check. A vague threat that if we don’t participate in capitalism, the things we hold near and dear will be destroyed? Checkity check. But even as our usage of these apps has increased, there’s been a rising chorus of criticism regarding their business models, perhaps summed up best by this New York City council member:

“When you see something, uh, it sucks the blood out of anything, you call them leeches. And that is exactly what GrubHub is.”

JOHN: It’s true, when you see something that sucks the blood out of anything, you do call them leeches. Also, if you see something that has 10 stomachs, 32 brains, nine pairs of testicles, and several hundred teeth, that’s a leech too. But admittedly, doesn’t apply quite as neatly here. And while that might sound harsh to you, it’s not totally unfair. Because for all the convenience these apps provide us, the customers, they come with a huge cost for everyone else involved, from restaurant owners to those delivering our food. So tonight, let’s talk about delivery apps. And first, let’s talk about what food delivery used to look like. Picture it: It’s 2003, and you’re at home, hungry after a long day of work at Blockbuster Video. So, you check out the giant stack of takeout menus you keep in a drawer. Then, trigger warning for anyone under 30, you’d make a phone call to a restaurant, say your order out loud to a person who worked there, and then a delivery worker, also hired by the restaurant, came to drop it off. Then you tipped in cash and tuned back into “American Idol” to watch the most famous person in the world, Ruben Studdard. The system was by no means perfect, but restaurants made a profit on your order, and delivery drivers were at least theoretically paid as employees. But over the past decade, apps have fundamentally shifted that model. Now, the ordering part tends to take place via an app, which then contacts a delivery driver who typically doesn’t work for the restaurant, who transports the food to you. And to be fair, there have been some upsides in this model for restaurants.

“There’s definitely a lot of positives, and one of them is like knowing that there’s a delivery guy nearby to pick up their food, and we don’t have to have someone on staff. We would need about 15 guys here at all times.”

JOHN: Right, before delivery apps, that owner would have needed 15 guys just standing around at all times, which honestly sounds less like a restaurant and more like someone describing an orgy that didn’t quite take off. Apps will point out that they also put restaurants’ menus in front of hungry people, which can help them with reaching more customers and growing revenue. But revenue isn’t the same as profit. And let’s talk about how exactly these companies make money, because they make some of their money from the various fees that you might see when you order. But they also charge restaurants 15 to 30% of an order in commissions, and that number can get even higher when apps charge restaurants additional fees for everything from boosting their placement in the app to making them part of special promotions. Especially during the pandemic, when online orders were basically the only ones coming in, restaurants who’d signed up for an app could be unpleasantly surprised when they saw just how little was left after the apps had taken their cut.

“We signed up with them during this pandemic as just any way to get any income, to have cash on hand, to be able to keep our staff.”

“This was GrubHub’s bill to us: Out of total orders of more than $116,000, GrubHub gave the restaurant only about $7,000 back. It was equal to 42% of our sales we got. So they took 58% of it.”

JOHN: It’s true, they took 58% of their sales. And I know that just saying percentages at you might not be that helpful, even though you know you are watching an episode of “Numbers Being Yelled At You With Human Squidward”. But 58% is a lot. Now, GrubHub insists that that restaurant agreed to those fees upfront and that 58% is an outlier. But it’s worth noting the Washington Post recently ran an experiment where they ordered the same meal from this restaurant in San Francisco on three different apps. The meal itself cost $26.99 before fees, taxes, and tip. And when they contacted the restaurant, they found that for Uber Eats, the restaurant got $14.48 back; for GrubHub, it got $12.47; and for DoorDash, it only got $10.59. Those are Mafia margins. Also, as a quick side note, what a fun assignment for a journalist that was. Sometimes journalists track down sources or pour through thousands of pages of documents. Other times, you get to order chicken parm a bunch of times in a row. It’s really the luck of the draw. But it’s gotten to the point where many restaurants have taken to increasing their prices on the apps to at least partially offset those fees. That is why you may have noticed food often costs more on an app than it does at the restaurants. And you might think, well, restaurants should just refuse to be listed on these sites then. But resisting them hasn’t always worked. Apps have repeatedly added restaurants against their will. In D.C. alone, GrubHub was accused of listing more than a thousand restaurants available for delivery that they didn’t have contracts with. And you thinking, well, I still don’t see a problem; they get to be on the app without paying for it. There are actually multiple issues there. Not every restaurant wants to do delivery, or is even set up for it. And Grubhub’s been accused of not warning restaurants before listing them, leading to them being suddenly inundated with orders they never expected. One in California even complained about GrubHub’s menu listing food that it does not actually make and has never made. Basically, GrubHub would list a restaurant without its permission or knowledge, and then make money by charging you a high delivery fee to bring the food to your door. But that might put the restaurant itself in a tough spot because they might be disappointing customers in ways they don’t even realize.

“M Street Baking Company in Howell is open for takeout during the pandemic. Like many restaurants, they were approached to join GrubHub for food delivery but declined.”

“We found out that they were sending people in, pretending to just be regular customers but actually working for GrubHub and delivering our stuff without our knowledge. They were offering milkshakes. We don’t put lids on our milkshakes because they go directly to you. So now, it’s going into somebody else’s car that they could cough on, sneeze on. As a business, if I knew that a second party was handling your food, I would package your products probably differently than if I knew it was going right to you.”

JOHN: Yeah, of course, you would. And I am glad about that, because I, for one, do not want to drink a milkshake that’s been raw-dogging the air in Kyle’s vape-smoke-filled Honda Civic. And the thing is, this practice has been standard in the industry right from the start. Just listen to the founder of Postmates talk about the company’s early days:

“When we launched Postmates 3 years ago, we did deliveries from Chipotle, and we got a cease-and-desist from them. And they said, like, ‘Guys, we’re a little bit concerned about the food quality.’ But you know what, what do we had to lose? So, we decided to ignore it.”

JOHN: Oh, you did, did you? That’s fun. Imagine getting lectured on food safety by Chipotle, the biggest red flag imaginable, and blowing that off. Also, I just want to go back so you can see Jim Cramer’s expression there, because this is the happiest I’ve ever seen anyone look. He is positively giddy at this story of corporate recklessness. He looks like a kid meeting a dog for the first time. No one has ever been happier than this. And in the case of GrubHub, it’s occasionally engaged in tactics that seem more like a protection racket. For instance, in 2020, it allegedly listed restaurants that didn’t partner with them as closed or not accepting online orders, even when they were, which feels especially shitty coming from the same company that made that ad saying that together we can help save the restaurants we love. I guess GrubHub just forgot to add, “and burn the ones that don’t make us money to the fucking ground.”
It is no wonder restaurant owners have increasingly turned on these apps, likening them to a hostage situation and selling your soul to the devil, which is, if anything, too kind. At least when you make a deal with the devil, he offers you something cool, like a sick golden fiddle, in return. And he surrenders, even when I think there’s a pretty good case that he’s the better fiddler. Sure, Johnny does rosin up his bow and play that fiddle hard, but he’s sampling old folk songs; there’s nothing original there. The devil, however, is playing an original, dissonant composition backed up by a band of demons. He’s bringing way more to the musical table. Now, we don’t have time for me to play both sides and fully convince you, but go listen to that song again and tell me you’re not having way more fun listening to the devil. Happy Easter, by the way.
But it’s not just the restaurants that these apps can harm; it’s also the delivery workers. In most places, delivering for these companies is gig work. You set your own hours and drive as much or as little as you choose, and companies have sold this as a great thing. GrubHub runs recruiting spots showing happy people balancing childcare, careers as artists, with working part-time doing deliveries. And other companies make similar claims, sometimes in wildly over-the-top ways, like the head of DoorDash here:

“I think, in many ways, Dashers on DoorDash look very similar to consumers, in the sense that, um, they value their time, um, as much or sometimes more, um, than money. And, and, and they, in effect, are choosing, um, you know, some of these part-time gig opportunities, so that, um, they can, you know, save for a project, whatever that may be, whether that’s, you know, buying a gift for someone or starting an orphanage.”

JOHN: What did you just say? Starting an orphanage? What the fuck are you talking about? Orphanages aren’t generally side hustles. You don’t tend to see “Rachel’s Shelter for Loose Babies.” But, I guess if you’re a tech pro, you’ve got it all planned out. First, you get a bunch of venture capital to disrupt the orphanage space, then you corner the orphanage market, automate it with robot workers to take care of the kids, create a rating system for potential adoptive parents to rate the baby’s vibe, fire babies who fail said vibe check—zero severance, obviously—make wild claims about future profitability, and before you know it, boom, it’s IPO time: Innovative Profitable Orphanages.
But the truth is, for many of those engaged in gig work, it’s not a side job; it’s their main source of income, and that can be a real problem when you consider that delivery apps classify their workers as independent contractors, meaning they have to pay for all of their own expenses. And as this guy in New York explains, that can be a lot:

“And the bike itself cost between $1,800 and $1,900 new. I upgraded it in many ways, for example, the seat, the phone holder, so I can have it over here. This battery cost me almost $450, so the total would be up to $2,500 because, if only the bike cost $1,800, plus the battery, that’s $2,200, and I had to buy the backpack because the companies don’t give you one, and a helmet because they don’t give you one either.”

JOHN: Look, that is all ridiculous, but the backpack might be the most egregious part there. This is a backpack you can’t use for anything else. Imagine using it for school, unless you’re a second grader who shows up every day with a social studies book, a PBJ, and 13 orders of pad kee mao. It doesn’t really work.
But the expenses are just the beginning here. Workers are also at the mercy of the app’s opaque algorithms, which are used to dictate speed, behavior, and ultimately, the wages of the workers. Many apps set up a game-like system of rewards and penalties, offering high scores for being on time and low scores and fewer orders for tardiness. And, of course, a significant part of that system is negative reviews. You might think a bad review is going to a restaurant or the app itself, but all workers know getting one can severely restrict your options going forward. In fact, just a few negative responses have the power to dry up worker income or even get them booted off the platform altogether. And those who’ve studied this will tell you that dynamic is a significant problem:

“Much of reputation systems were put in place to be able to give consumers reviews of products. That doesn’t transfer well to workers’ effort, turning it into the equivalent of evaluating whether we got a good coffee. That place where there’s slippage between a product and a person’s labor is dangerous.”

“We’ll replace the tyranny of the boss with tyranny of an algorithm, and that is much worse. I will tell you, as a computer scientist, I will tell you that that’s much worse.”

JOHN: Right. That is a terrible system. Workers have even called the algorithm the “patron fantasma,” or Phantom Boss, which sounds like a reality show on Max that somehow already has 12 seasons. And this downward pressure is a big part of why you might see delivery workers speeding or going the wrong way down the street on their bike. The clear incentive is to make as many orders as you can, as quickly as you can, even if that means compromising safety.
And speaking of safety, these jobs can be risky. In cities like New York, delivery workers are constantly dodging traffic and have been robbed and attacked, and that’s even before people order them to bring food through extreme weather like blizzards and even floods. And by the way, don’t do that. If you see a flash flood warning pop up on your phone and immediately open GrubHub, sorry, you don’t get to go to heaven. That was the test, and you failed it. It is frankly no wonder that delivery driving is among the deadliest occupations in the country. And because these workers are independent contractors, apps don’t have to pay for their health insurance. In fact, one survey found that of those who’d experienced a work-related injury, three out of four delivery workers said they paid for medical care out of their own pocket, all of which can lead to things like this supposedly heartwarming human interest story from January about a video that had gone viral:

“Bro, what are you doing? Are you serious?”

“I got bills to pay, bro.”

“I respect that, dude. That’s crazy.”

“This is how Kevin Ross has been making a living, delivering food on a bike with a broken foot. Watch as he straps a walker onto the bike so he has support when he goes inside restaurants. Back in September, Kevin says he was making a delivery for GrubHub when he was hit by a car.”

“I got hit. I blacked out. Next thing I know, I’m in the hospital.”

“He needed surgery, and doctors told him recovery would take months. But with hardly any savings, he had no choice but to get back to work.”

JOHN: Well, hold on, “no choice”? What do you mean? GrubHub says they’re all about giving their delivery workers choice. They get to choose their own hours, choose to run a red light rather than be punished by the algorithm, and they get to choose to get back to work while severely injured instead of facing crushing medical bills. They’ve got more choices than Sophie. Haven’t seen the movie…
So, workers are vulnerable because they lack labor protections and health insurance, and all of this risk is in service of a job where, like unfortunately most service jobs, most of their income comes in the form of tips, which can make up a third to half of their total earnings. But the thing is, those tips obviously aren’t guaranteed. The Verge interviewed a delivery worker who reported biking from 77th Street on the Upper East Side, 18 blocks south and over the Queensboro Bridge, then up through Long Island City, and over another bridge to Roosevelt Island, to deliver a single slice of cake—for no tip at all. And look, I get that if you are ordering delivery on a single slice of cake, you are clearly going through something because that is the single saddest order any human being could make. But, you gotta fucking tip.
And at this point, you’re probably thinking, “Wow, these companies are driving restaurants and delivery workers to ruin just to make massive profits.” So, you might be surprised to hear this:

“We should start by acknowledging that today, Uber Eats does not make money,”

“Janelle Sallenave, head of Uber Eats.”

“We’ve been very public about the fact that it’s not yet profitable.”

“And neither are her competitors.”

“The platforms themselves lose a ton of money, in the hundreds of millions of dollars, billions collectively.”

“Why does this business even make sense?”

“I’m not sure it does, and I think they’re still trying to figure out how to make money at this, even today.”

JOHN: Wow, they’re still trying to figure out how to make money at this. These are companies valued at billions of dollars, and yet they’d be talked about the same way you talk about your cousin who sells jewelry on Etsy. And while that might sound counterintuitive, it actually makes perfect sense because the old menus-in-a-drawer form of delivery set certain firm limits. It involved one restaurant directly hiring a delivery worker, who then delivered food to a limited area. But these apps introduce whole new categories of costs to the equation, from marketing to lobbying, to building and maintaining a whole website.
And they’re basically following the classic tech disruptor model: using Wall Street money to grow at all costs, corner a market, undercut their competitors, and then buy them up, or with the ultimate goal of monopolizing the sector and then massively raising prices.
Think about how Uber and Lyft used to be much cheaper than traditional taxis, and then, once they dismantled that model, they jacked their prices way up. We’re just at the point in the cycle where companies can lose a ton of money, keep prices low for consumers, even as they try and offset that by squeezing restaurants and delivery workers at the bottom.
But the consolidation era has very much begun. Uber Eats bought Postmates; DoorDash bought Caviar; and GrubHub merged with Seamless. In fact, GrubHub and DoorDash alone comprise more than 20 companies that once competed with one another. And some of these companies will tell you that they’re now either breaking even or turning a slight profit, though some of those claims have significant caveats to them. But in general, we’re currently in a weird situation where the restaurants are losing out, the delivery workers are losing out, and even the companies are struggling. The main winner so far has actually been us, the customers, because, as this business journalist points out, we’re getting an incredibly convenient service and paying less than it’s technically worth.

“I call this the “millennial lifestyle subsidy.” Right, every single time that you’re using DoorDash or using Uber, you’re getting a little bit of money back from these companies. They’re saying, “We’re never going to charge you as much as the service actually costs.” So, I think it’s ironic. I think it’s interesting. And I also think it just can’t last.”

JOHN: And he’s probably right, though personally, I find it a little hard to get mad at the idea of millennials getting some sort of subsidy in life. After all, this is a group who will never be able to afford a house, is drowning in student debt, and can’t even enjoy Harry Potter anymore. You can’t spell “millennial” without three massive L’s.
But if it truly is the case that we’re headed to a point where a few massive companies dominate this industry, now might be the time to talk about putting some real guardrails up. And I will say, some places are trying. Here in New York, thanks to the hard work of, among others, a collective of delivery workers called Los Deliveristas Unidos, the city passed a law that guarantees a minimum pay rate for delivery workers. But the apps haven’t made it easy. Once that rule rolled out, they increased their fees to users and restaurants and tried to reduce the end price to the consumer by making it harder to find the tipping option. If you live in New York, check to make sure you’re still tipping people because it’s possible that you’re not.
And in California, the state passed the law in 2019 expanding protections to gig workers. But some of the big delivery apps, along with ride-share companies and others, pushed a ballot proposition called Prop 22 that would carve themselves out of that law. And they went all out to get it passed.

“The latest data from the Secretary of State’s office show Uber, Lyft, DoorDash, Postmates, and Instacart have spent more than $184 million combined campaigning for Prop 22.”

“It is very, um, David and Goliath, if you will. Um, these billionaire corporations spending so much money to exempt themselves from basic labor protections, it tells you what it’s worth to them.”

JOHN: Right, it does tell you what it’s worth to them. At least $184 million. And that’s a fuck ton of money. That’s as much as, and this is true, this racehorse. Think about that. They’re denying workers basic labor rights when instead they could be getting in on the ground floor of this horse. And I get it. I get where that valuation is coming from.
And the sad thing is, that ballot initiative passed, and it could be very hard to undo given it requires a 7/8 vote in both the State Assembly and Senate to amend it in any way, which is unprecedented, although that part, at least, may hopefully get overturned by California Supreme Court later this year. And there are fights brewing in other places, including Seattle, which is considering rolling back worker protections, and Massachusetts, where several apps are pushing for a Prop 22-style ballot initiative this November.
But while these issues get addressed at the federal, state, and city level, it might also be worth talking about what you yourself can do in the meantime. Because I am not saying you shouldn’t use delivery apps; a lot of people rely on them, from working parents to disabled people to people who are, like me right now, baked out of their fucking minds. But the fact is, it is just too easy to use these apps while completely forgetting the actual human beings behind them, whose fates you control by just pressing a button. So, when it comes to restaurants, if there is one that you like to order from, ask if there is a way that they would rather you do that than through an app. And if there is, do it. And when it comes to delivery workers, remember, bad reviews can directly impact their livelihood. So, I would go with five stars across the board. Basically, if you’re rating anything less than five stars, there has to be visible semen in your food, and you have to be absolutely sure that it’s not just a glaze. And even then, I’d still go with four stars.
And while this should go without saying, you have to tip. And if you are making someone cross multiple bridges with a single piece of cake, first, I’m so sorry about whatever is going on in your hectic life, but you need to tip even more. And if we all do this, then, and only then, we will be able to say with a clear conscience, “Oh, thank God, the food’s here.”

 

 

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