[Australia] Food delivery companies trial new ways to improve gig economy

A startup founded by ex-delivery driver Vishal Plato is among the companies working to disrupt the gig economy model by paying their drivers a guaranteed hourly rate and pushing for minimum standards, ABC News reports.

Mr Plato hated the stress of never knowing if he would be making money on the evenings he spent out with his bike awaiting deliveries. 

"I used to wait around in the streets for a long time, and never used to get paid for that," he said.

"If you're sitting outside in cold and rainy weather, you have to get paid for that. You can't simply wait around in the street for an order to come."

Mr Plato said that often when a call did come through, it was barely worth it.

"Maybe you get five bucks, or you're getting six," he said.

"It's not good enough payment. So that's why we change the system."

The question is can it work in an industry where the gig model has been firmly entrenched for years?

Vishal Plato says it will. His company Fuel It Up partners with restaurants paying a volume-based monthly subscription fee, plus a flat fee per delivery of $6.99 which Mr Plato said created enough margin to pay his workers an hourly fee.

Mr Plato said it was a win-win for restaurants because the customers also ended up paying less for food.

"[UberEats'] take a delivery fee from customers and then take 10 per cent from the customer again, so that's a huge fee," he said.

"My business helps restaurants to run more efficiently, drivers to earn more, and customers are paying what instore prices are," he said.

The venture is 18 months old and backed by a $110,000 investment from Mr Plato and some friends. It had been running at a loss but turned a profit for the first time in January.

The venture operates primarily in Melbourne's inner south-east including in South Yarra, St Kilda and Richmond, at present, with more than 100 riders on its books.

Customers can still place their orders from participating restaurants through UberEats but the delivery riders are paid an hourly wage and, because they operate within defined boundaries, they don't have to wait for long or travel too far for delivery jobs.

High delivery fees are a concern

Luca Sommella - the co-owner of MIS Pizza in South Yarra - said delivery companies were a crucial but expensive part of hospitality during the pandemic.

"Using Fuel It Up has helped to really reduce the amount of money we were leaving behind with UberEats," he said.

His business still pays 16 per cent to have its food appear on UberEats' ordering platform however Mr Sommella said the fees to Fuel it Up were less than the 30 per cent fee UberEats charged to use its own delivery riders.

Menulog pushes for a new labour agreement to cover its workers

Menulog is another Australian food-delivery company that is exploring different ways of doing business.

Currently, about 20 of its workers are engaged as employees as part of a trial, though the rest of its delivery workforce remains contractors.

Menulog's employee group can access penalty rates, minimum wage, superannuation and workers' compensation like conventional employees.

But Menulog is seeking a new industry award agreement to cover them, something rejected by the Fair Work Commission in January.

"Unfortunately, under the [Road Transport and Distribution] award, which was not designed with an on-demand workforce in mind, there are limitations to being able to accommodate the flexibility sought by our workers," a Menulog spokesperson said in a statement.

It explained, as an example, that the company was unable to offer split shifts under the award agreement; something which is not an issue for those drivers who are engaged as contractors.

Minimum standards must apply to everyone

Jim Stanford - an economist and director at the Centre for Future Work - said even if Fuel It Up and some Menulog workers were getting an hourly wage it was hardly "progress".

"We've been arguing about a minimum wage for, you know, over 100 years," he said.

"That principle absolutely can and should apply to gig work just like any other job that we do."

Mr Stanford reportedly said it is not the award agreement that is the issue either.

He said the real problem was that even if companies like Menulog and Fuel it Up were trying to do better by workers, they were competing against others who were not.

"Watering down the provisions of our awards, which are already at kind of safety net bare minimum levels is not the answer here," he said.

"How do we expect Menulog or Fuel it Up to compete successfully when their major competitors get to pretend that the minimum wage doesn't exist?"

Mr Stanford and the Transport Workers Union (TWU) are calling on the federal government to intervene and level the playing field, specifically with legislation that clearly defines who is and who is not an employee.

"Fuel it up and Menulog and others who are trying to do the right thing should be supported," Michael Kaine - the TWU National secretary - said.

"But to support them, we need governments and the federal government in particular, to put in place laws that make sure workers are safe and that they are getting a decent wage for the work that they do.

"I think there is an element here, about getting consumers to vote with their feet, but they need to have somewhere to go."

In a recent Senate inquiry on job security - with a Labor majority - government senators did not support recommendations around strengthening protections for gig workers through law reform.

Conversely, a report from Liberal and National senators noted the "benefits of flexibility and freedom that such arrangements provide to tens of thousands of Australians".

Delivery rider Maxine Carey-Gorey said being a contractor or an employee was not really a big deal for her.

"The flexibility is an incredible draw point," she said. "There's enough work so if you want to be there every day you can, but you don't have to be there every day."

Source: ABC News

(Quotes via original reporting)

A startup founded by ex-delivery driver Vishal Plato is among the companies working to disrupt the gig economy model by paying their drivers a guaranteed hourly rate and pushing for minimum standards, ABC News reports.

Mr Plato hated the stress of never knowing if he would be making money on the evenings he spent out with his bike awaiting deliveries. 

"I used to wait around in the streets for a long time, and never used to get paid for that," he said.

"If you're sitting outside in cold and rainy weather, you have to get paid for that. You can't simply wait around in the street for an order to come."

Mr Plato said that often when a call did come through, it was barely worth it.

"Maybe you get five bucks, or you're getting six," he said.

"It's not good enough payment. So that's why we change the system."

The question is can it work in an industry where the gig model has been firmly entrenched for years?

Vishal Plato says it will. His company Fuel It Up partners with restaurants paying a volume-based monthly subscription fee, plus a flat fee per delivery of $6.99 which Mr Plato said created enough margin to pay his workers an hourly fee.

Mr Plato said it was a win-win for restaurants because the customers also ended up paying less for food.

"[UberEats'] take a delivery fee from customers and then take 10 per cent from the customer again, so that's a huge fee," he said.

"My business helps restaurants to run more efficiently, drivers to earn more, and customers are paying what instore prices are," he said.

The venture is 18 months old and backed by a $110,000 investment from Mr Plato and some friends. It had been running at a loss but turned a profit for the first time in January.

The venture operates primarily in Melbourne's inner south-east including in South Yarra, St Kilda and Richmond, at present, with more than 100 riders on its books.

Customers can still place their orders from participating restaurants through UberEats but the delivery riders are paid an hourly wage and, because they operate within defined boundaries, they don't have to wait for long or travel too far for delivery jobs.

High delivery fees are a concern

Luca Sommella - the co-owner of MIS Pizza in South Yarra - said delivery companies were a crucial but expensive part of hospitality during the pandemic.

"Using Fuel It Up has helped to really reduce the amount of money we were leaving behind with UberEats," he said.

His business still pays 16 per cent to have its food appear on UberEats' ordering platform however Mr Sommella said the fees to Fuel it Up were less than the 30 per cent fee UberEats charged to use its own delivery riders.

Menulog pushes for a new labour agreement to cover its workers

Menulog is another Australian food-delivery company that is exploring different ways of doing business.

Currently, about 20 of its workers are engaged as employees as part of a trial, though the rest of its delivery workforce remains contractors.

Menulog's employee group can access penalty rates, minimum wage, superannuation and workers' compensation like conventional employees.

But Menulog is seeking a new industry award agreement to cover them, something rejected by the Fair Work Commission in January.

"Unfortunately, under the [Road Transport and Distribution] award, which was not designed with an on-demand workforce in mind, there are limitations to being able to accommodate the flexibility sought by our workers," a Menulog spokesperson said in a statement.

It explained, as an example, that the company was unable to offer split shifts under the award agreement; something which is not an issue for those drivers who are engaged as contractors.

Minimum standards must apply to everyone

Jim Stanford - an economist and director at the Centre for Future Work - said even if Fuel It Up and some Menulog workers were getting an hourly wage it was hardly "progress".

"We've been arguing about a minimum wage for, you know, over 100 years," he said.

"That principle absolutely can and should apply to gig work just like any other job that we do."

Mr Stanford reportedly said it is not the award agreement that is the issue either.

He said the real problem was that even if companies like Menulog and Fuel it Up were trying to do better by workers, they were competing against others who were not.

"Watering down the provisions of our awards, which are already at kind of safety net bare minimum levels is not the answer here," he said.

"How do we expect Menulog or Fuel it Up to compete successfully when their major competitors get to pretend that the minimum wage doesn't exist?"

Mr Stanford and the Transport Workers Union (TWU) are calling on the federal government to intervene and level the playing field, specifically with legislation that clearly defines who is and who is not an employee.

"Fuel it up and Menulog and others who are trying to do the right thing should be supported," Michael Kaine - the TWU National secretary - said.

"But to support them, we need governments and the federal government in particular, to put in place laws that make sure workers are safe and that they are getting a decent wage for the work that they do.

"I think there is an element here, about getting consumers to vote with their feet, but they need to have somewhere to go."

In a recent Senate inquiry on job security - with a Labor majority - government senators did not support recommendations around strengthening protections for gig workers through law reform.

Conversely, a report from Liberal and National senators noted the "benefits of flexibility and freedom that such arrangements provide to tens of thousands of Australians".

Delivery rider Maxine Carey-Gorey said being a contractor or an employee was not really a big deal for her.

"The flexibility is an incredible draw point," she said. "There's enough work so if you want to be there every day you can, but you don't have to be there every day."

Source: ABC News

(Quotes via original reporting)