Grocery giant Albertsons Companies—which operates Albertsons, Vons, and Pavilions stores in California—is laying off workers employed as delivery drivers and replacing them with app-based gig workers, as was first reported by KNOCK-LA.
The company didn’t link the move to the passage of Proposition 22, which exempts tech companies like delivery apps from being forced to classify full-time workers as employees, but people in labor circles worry that it’s a sign of bad things to come. At the moment, by labor experts’ estimates, not a single delivery driver is currently employed by the grocer in the Los Angeles area.
“As of the end of [January], they won’t have any employees that are drivers for Albertsons,” Jim Araby, director of strategic campaigns for United Food and Commercial Workers Local 5, tells Los Angeles.
“We will transition that portion of our eCommerce operations to third-party logistics providers,” a representative for Albertsons said in a statement. “While we know that this move will help us create a more efficient operation, it wasn’t a decision we made lightly or without a great deal of consideration.” The supermarket brand has been partnering with gig delivery service DoorDash since 2018.
It’s a shift from a sentiment expressed in the early days of the COVID-19 pandemic. In May of 2020, Albertsons Companies president and CEO Vivek Sankaran said the company was “taking care of our team,” and would be “working to ensure that every member of our team who faces a crisis can have peace of mind that we will help them get through it.”
Albertsons Companies confirmed that unionized delivery workers will not be laid off in the policy change, but none of SoCal’s drivers had unionized. Some delivery drivers in the Bay Area had, and Araby says that negotiation was finalized in November of 2020, just in time to protect those jobs. Still, he expects the grocer will do everything it can to slowly phase out employees. “We’re preparing for that,” he says. “And we’re going to fight like hell to preserve and advance standards.”
The decision to lay off delivery employees was made in December of last year, and, according to the company, laid-off workers would be offered the chance to continue work. The company declined to comment on Prop 22, but did say the shift to gig workers would “allow us to compete in the growing home delivery market more effectively” which has become “more strategically important to Albertsons Companies.”
The pandemic has caused a rate of unemployment not seen since the Great Depression. Ride-hailing work has seen a significant drop, forcing existing gig workers who previously offered Uber- and Lyft-type rides to compete with the wave of newly unemployed people for delivery jobs. And many of those delivery gigs pay less than minimum wage.
“Once you account for full expenses, as much as 15 to 20 percent, not only are you earning below minimum wage, you are potentially earning as little as nothing,” says Chris Benner, a UC Santa Cruz researcher who coauthored a recent report about the future of food retail. His data shows that grocery delivery has been dominated by a younger workforce of women who have dependents. “They’ve gotten laid off from restaurant work or hospitality work…for many of them, it’s their only source of income.”
As gig workers, they aren’t eligible for safeguards like minimum wage, unemployment insurance, workers compensation, or health and safety protections. And in a pandemic, that could have deadly repercussions. Benner hasn’t studied the spread of coronavirus through delivery workers, but says that traveling back and forth between grocery stores, restaurants, and people’s homes means they’re constantly at risk. “It’s been a health problem for the last ten months, and will continue to be unless the problem is solved,” Benner says.
Labor specialists are looking to the Biden administration and the Department of Labor for final say on the matter. Araby also believes that the National Labor Relations Act needs to be revised to give all workers, even independent contractors who are not currently covered, the right to unionize.
Experts say companies will continue to try to use third-party platforms and independent contractors to drive down labor costs, and even eliminate them with the onset of autonomous vehicles. Silicon Valley-based tech startup Nuro recently got approval to use a fleet of autonomous vehicles to make deliveries using public streets. If the technology catches on, Araby says, “I wouldn’t be surprised if, four or five years from now, all these people that are driving just don’t have jobs anymore.”