Late last month, 27-year-old Matthew and other delivery drivers at a San Diego Vons, a subsidiary of Albertsons, were called in for a meeting with managers.
The drivers had been working long hours during the pandemic, delivering groceries in refrigerated trucks to elderly folks and people at home with their kids.
“I thought they were going to give us a bonus or a raise or something like that,” Matthew told KPBS. In the two-and-a-half years he had been at Vons, he’d seen his hourly wage rise from $15 an hour to $18 an hour.
Instead of a raise, however, Matthew and the other drivers were told their jobs were being eliminated. And they were going to be replaced by third-party gig workers at the end of February.
Matthew did not want his full name used in this story because he’s still employed by Vons, which will give him a bonus if he stays in his job until Feb. 27. Matthew lives with his mother and father.
“I didn’t want to tell them,” Matthew told KPBS. His mother doesn’t work and his father is disabled. “I’m the breadwinner for the family.”
Matthew and the dozens of other delivery drivers working for Vons and its parent company, Albertsons, had just become one of the first people impacted by Proposition 22, which had gone into effect only days before their meeting with management.
“It’s clearly a monetary incentive. In the end, all of these corporations are acting out of bottom-line cost-cutting. And what’s happening is Albertsons has decided that a deal with a (third-party) will be more efficient in terms of their liabilities and cost of delivery,” said Orly Lobel, a law professor at the University of San Diego who specializes in labor law.
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Lobel said businesses like grocery stores are now encouraged to use gig workers after the passage of Prop 22, which was approved by nearly 60% of California voters in November. Gig economy companies like Uber, Lyft and Door-Dash spent over $200 million supporting it.
The proposition provided a carveout from several state court rulings and a controversial new state law. AB 5 forced companies like Uber, Lyft or Door-Dash to hire many of the people that found full-time work through their apps. And to provide them with healthcare coverage, unemployment insurance, and the right to collectively bargain.
But transportation-based companies are now exempted from having to do that, thanks to Proposition 22, saving the companies millions of dollars.
“If they had to fully employ or deem their delivery people employees, all of them, it would increase costs in such a way that they would maybe fold and leave California. That was their claim,” Lobel explained.
But Albertsons contends Prop 22 had nothing to do with the changes it had made to its business model. In a statement, it told KPBS that the decision was made to allow the company “to compete in the growing home delivery market more effectively.”
Professor Lobel thinks it’s irrelevant whether Albertson’s credits the change to Prop 22, because the whole industry is now embracing the model.
“With delivery there is an efficiency argument that we’ve seen with companies like Instacart and Grubhub where the same person who’s working this gig is serving both restaurants and delivering from grocery stores. And in this way, they can divide their hours and times and human energy into many more tasks they’re filling throughout the day,” Lobel said.
Advocates for Prop 22 say that for those working in delivery and transportation services, it provides flexibility when someone might not be looking for a full-time job. Or, because of other reasons, who want or need to make their own schedules.
But union leaders like the United Food and Commercial Workers Local 135 Chief Todd Walters thinks this will just lead to the erasure of good-paying jobs. On Tuesday, some gig workers and major unions filed a lawsuit in the California Supreme Court, challenging the constitutionality of Proposition 22.
“Every employer in the state of California is looking at this and drooling over this because these app-based drivers, the companies are not paying unemployment, disability, social security ... they’re not paying the taxes. The independent contractor pays for that,” Walters told KPBS. “You look right now how much we depend on unemployment and state disability because of COVID, imagine the more companies that go independent contractors, those social networks are going to get hit really hard.”
The delivery drivers in San Diego were non-union workers. Elsewhere in the state, where delivery drivers had unionized, Albertson’s did not lay them off.
Matthew, the Vons driver, said that the company did offer to reassign him elsewhere — to a fulfillment center in Irvine. He says he won’t be taking them up on that offer, which would involve a 90 minute drive each way. And he says he won’t be looking for a job in the gig economy, because of the pay cut he’d have to take.
“I have my customers telling me they hate DoorDash, they don’t want people in non-refrigerated trucks bringing them their food,” Matthew said. Third-party delivery drivers use their own cars often to make deliveries.
Matthew says with 13 deliveries a day, he hasn’t had time to think about what he’ll do when he becomes unemployed, with the country still in the midst of a financially punishing pandemic.
“The grocery stores are making so much money right now,” he said. “What are they complaining about?”
