Last night, February 2nd, 2024, London and other British cities witnessed some of the biggest and most successful strike actions in the history of the gig economy on these islands.
A lit fuse
The trigger for the action is the steady deterioration of pay and conditions across the major platforms of Uber Eats, Deliveroo and Just Eat. January and February are typically lean months in the sector adding more pressure to an already distressed workforce. With low volumes of work, plummeting rates of pay and a high supply of labour for piece meal piece work, industrial action was inevitable.
The economic picture has been bleak for sometime. 2023 saw the rapid roll out of the controversial dynamic pricing systems driven by predatory algorithms and AI. This has led to greater opacity in pay while platforms steadily improving their margins at the cost of workers.
Growth has slowed on the platforms with Deliveroo reporting a 1% decline in order volume in the UK market for 2023. Now, growth can conceal a multitude of sins of a failing business model and the slow down at Deliveroo is a serious problem for a company already losing around £300 million per annum. Given Deliveroo's terrible financial position, the logic of their aggressive response to the strikes can be anticipated however reprehensible. More on that later.
Hyper-local cuts two ways
Deliveroo boasts of the potency of its so-called 'hyper-local' strategy. Will Shu, CEO describes it thus:
Deliveroo’s core strategy remains the same: focus first on neighbourhoods with the greatest profit potential and win them, neighbourhood by neighbourhood.
Unfortunately for Deliveroo, their commercial strategy exactly matches that of the wildly successful organising strategy of the striking workers. Unlike private hire drivers working for Uber, Bolt, FreeNow et al, food delivery workers tend to work locally covering a relatively small geographic area. For the strike to be successful, the workers did not need to bring down the entire platform network across London, they could instead withdraw their labour to effectively close down 'hyper-local' markets one by one.
The successful strike strategy progressed effectively and quickly last night in key London local markets such as Brick Lane in Tower Hamlets, Leytonstone, Earls Court as well as Brighton. As these local online markets started to fall over, Deliveroo was forced to issue a warning to its consumers that its network was facing considerable disruption.
The clear manifestation that the strike was biting locally heartened the workers and word spread quickly. Workers had real time feedback that their strike was highly potent and well worth the considerable loss of income they suffered by choosing to strike on a peak Friday night just after pay day. As word spread, more and more 'hyper-local' markets closed down or were seriously disrupted in a chain reaction. It is proof that platform employers stand on feet of clay and targeted strike action can indeed be very effective.
Deliveroo intimidation and incitement
Ahead of the strike, Deliveroo sent out a highly provocative message to their commercial partner restaurants. The clear goal was to create division between strikers and the restaurant operators and to incite conflict to distract from Deliveroo's own responsibilities as the dispute cause agent.
Particularly problematic is Deliveroo's attempt to criminalize the strikers by encouraging restaurants to call the police and suggesting a definition of the strike picket line as 'loitering' and 'anti social behaviour. There is also a call on restaurants to report striking workers to Deliveroo who will then 'offboard' them. This is the very worst type of anti-union intimidation and is surprising given that it claims to recognise the GMB union.
During the evening there was some disturbance at a cluster of public restaurants and dark kitchens around 84 Brick Lane. As we've commented before, there is a cluster of so called cloud kitchens crammed into a basement at this address. At one point the workers enforced the picket line and stopped all deliveries from this address. Suddenly, three or more people claiming to be restaurant owners became violent with the workers and demanded they disperse. A restaurateur from the 84 Brick Lane facility burst on to the street swinging a machete. It was a show of determined violence, ultimately futile, designed to intimidate the workers and break the strike.
These men used words obviously lifted from the Deliveroo letter speaking of 'loitering' and 'anti social behaviour'. The police were called, but the workers quickly convinced the police that the sole source of violence was a small minority of Deliveroo area partner restaurants not Deliveroo's own workforce. It will be interesting to see if Deliveroo now 'offboards' these dark kitchen restaurants from their network. After all, as Deliveroo themselves said in their letter:
The safety of every member of our marketplace is an absolute priority and anyone found to be engaging in abusive behaviour will be investigated and offboarded from our platform and we will no longer work with them.
The vibrant independent restaurant scene of Brick Lane and places like it are particularly vulnerable to delivery platform economics over the long run. They face the dual threat of low cost cloud kitchens supplanting their restaurants and high commissions demanded of them. Small, local independent restaurants pay as much as 35% of the food order price to Uber, Deliveroo and Just Eat while global chains like McDonalds and KFC pay as little as 10% or lower. It is not surprising then that Deliveroo seeks to stoke division between independent restaurants and delivery workers. Solidarity between local independent restaurants and local workers in joint action is a nightmare scenario for the platforms.
Given the pervasive problem of algorithmic exploitation propping up the broken business models of food delivery platforms and given the success of the hyper-local worker organising strategy, expect an up tick in industrial action throughout 2024.