[HN Gopher] Italy demands EUR733M in fines from food delivery pl...
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Italy demands EUR733M in fines from food delivery platforms
Author : Svip
Score : 77 points
Date : 2021-02-25 21:42 UTC (1 hours ago)
(HTM) web link (www.politico.eu)
(TXT) w3m dump (www.politico.eu)
| tppiotrowski wrote:
| _> If the companies pay the fines within 90 days, they will be
| able to avoid criminal proceedings_
|
| If they prosecute UberEats, who exactly would be the one serving
| prison time?
| hikerclimber wrote:
| good. I hope doordash and the other delivery platforms get fined
| a lot of money. :)
| cwhiz wrote:
| Meanwhile, these companies can't make any money as it is.[0]
|
| At some point maybe we should consider that this model is
| completely broken. The gig workers hate it, the restaurants hate
| it, and the delivery companies can't make a profit. What in the
| fresh hell are we doing where nearly every part of this "economy"
| is mad about it?
|
| [0]: https://www.marketwatch.com/story/doordash-shares-sink-as-
| re...
| ransom1538 wrote:
| " Meanwhile, these companies can't make any money as it is.[0]"
|
| Food creation & delivery: A hyper competitive, low margin,
| inventory rotting, regulated, logistical & insurance nightmare.
| bilekas wrote:
| Gig workers don't hate how its set up, they make a nice bit of
| cash for hard work when they need or want.
|
| Restaraunts don't hate it because they don't have to have staff
| hired to deliver, infact all the logistics of delivery are
| removed for them.
|
| > The San Francisco-based company reported a fourth-quarter
| loss of $312 million
|
| Excuse me while I shed a tear for the billion eur company over
| the riders who will get screwed for this ruling.
|
| DoorDash's business management is not reflective of its
| customers, who are the riders and restaurants. Who, in this
| scenario are the losers.
| InitialLastName wrote:
| Under a dumping accusation, their competitors are the victims
| here. Operating at a substantial loss as a strategy to expand
| your market footprint is pretty textbook anticompetitive.
| readflaggedcomm wrote:
| At what point do hundreds of millions of dollars in operating
| losses begin to constitute "dumping," where a product (service
| in this case) is priced below its cost in order to accumulate
| market share and harm competitors?
|
| Other comments mention that delivery "worked fine" before,
| which implies DoorDash can't argue that they were perfectly
| innovative against a "dumping" accusation.
| nradov wrote:
| In legal terms "dumping" is only applicable to imports.
| There's generally nothing illegal about delivering a local
| service at a loss, except in limited cases when one company
| has an effective monopoly and uses that pricing to drive out
| competitors. For now the food delivery market is still highly
| competitive.
| oconnor663 wrote:
| I mean, speaking personally as a customer, I'm a pretty big fan
| of being able to search for food online and order it. When
| we're trying to figure out whether a market is broken, the
| question of whether customers are happy is a pretty important
| starting point. (But maybe I'm just a weirdo and everyone else
| who uses Yelp etc. is miserable?)
| cedricgle wrote:
| The gig economy is just a return to the basics of the
| industrialization and the machine age; where people went to the
| factories' gates to seek a job for the day. During this period,
| such flexibility brought a huge boost in production, innovation
| and revenue. So this model isn't necessary broken.
| [deleted]
| nullserver wrote:
| Gig work and Airbnb saved my life and kept family off street.
|
| I got injured and disability decided to play hard ball.
|
| Working whatever hours I could be functional and being able to
| stop and rest, or wait for medication side effects to ease off.
| These are the only thing that kept us off the street.
| jpdaigle wrote:
| I'm kinda surprised that food delivery apps and ride-hailing
| apps are all money-losing. Why?
|
| It's a modernization of an already-proven business model.
| Chinese food and pizza was orderable by phone, and delivered
| for free or a small fee, 30 years ago.
|
| So, the pizza restaurants proved that there's enough margin in
| a 25$ pizza to pay a minimum wage driver to drive it to your
| house. Delivery platforms come in and break this up: instead of
| the restaurant having someone on payroll to deliver orders, you
| just outsource that to another party (and pay them a fee, which
| is passed-through to the customer, and replaces money you
| would've paid the on-staff driver otherwise).
|
| Why can't the food delivery companies provide delivery services
| for basically the same total cost as before, and subsist on
| extracting a small percentage of the value, which is freed up
| by the massive economy of scale that they can create by
| aggregating orders from several restaurants into a single pool?
|
| Ditto for Uber... it's possible to operate a taxi company
| profitably, and has been for a hundred years. Shouldn't Uber
| have basically the same economics / cost per mile as a
| traditional taxi company, except be more efficient thanks to
| top-notch demand prediction that no local taxi company could
| ever build?
| jimbob45 wrote:
| Kudos to the legislators for allowing the experiment to run as
| long as it did to find potential solutions.
|
| Now it's time to legislate it away, just like many have done
| with Uber/Lyft.
| bpodgursky wrote:
| Someone should let the gig workers know!
|
| I bet they'd quit if they knew how miserable they were.
| srswtf123 wrote:
| On the off chance you're unfamiliar with the term, I suggest
| you learn about _wage slavery_.
|
| https://en.m.wikipedia.org/wiki/Wage_slavery
| bpodgursky wrote:
| That sounds bad! It sounds almost as bad as unemployment
| slavery, or homelessness slavery!
| z3rgl1ng wrote:
| Dope take.
| [deleted]
| _Microft wrote:
| Did it occur to you that some people could be in situations
| where they simply cannot quit a job no matter how miserable
| it makes them?
| hsgdh3487 wrote:
| It probably did occur to GP, that's the whole point (if I'm
| right to be charitable).
|
| Top comment is arguing that these people should be laid off
| as part of a government initiative to reshape the economy.
| If these people can't quit, what will happen if they are
| laid off? Is there any policy that could help these
| workers? My best guess is UBI, but that is another
| discussion.
| jdminhbg wrote:
| That's going to be bad news when it gets legislated away
| then, isn't it.
| Narkov wrote:
| I don't know you circumstances but it is possible to still do
| something out of desperation - possibly to feed your family -
| and hate it.
| recursive wrote:
| So in that hypothetical scenario, would that person be
| better or worse off if they were denied the option to do
| that thing they're doing that they hate?
| Narkov wrote:
| Worse off. Feeding their family is probably a higher
| priority than a shitty job.
|
| It doesn't change the fact that the job is rubbish.
| tiborsaas wrote:
| I think drones will save them. Can't wait to spend a romantic
| dinner in a small restaurant with my girlfriend and watch the
| delivery drones come and go, humming around us.
| [deleted]
| [deleted]
| programbreeding wrote:
| I'm not saying this is a reason to do it, but the part of the
| model that isn't broken is that people love it. The consumers
| are benefiting.
| floren wrote:
| Yes, people love getting stuff cheap. But if, say, an auto
| shop was offering cheap oil changes because they're just
| dumping the used oil down the sewer instead of properly
| disposing of it, "people like cheap oil changes" isn't
| justification for the continued harm.
| ghaff wrote:
| There are tons of services I would use if I could get them
| for well below cost.
| PragmaticPulp wrote:
| > What in the fresh hell are we doing where nearly every part
| of this "economy" is mad about it?
|
| We're at the point in the hype cycle where the service has
| become popular, so the media has flipped to the contrarian
| takes about how it's bad, actually. It wasn't that long away
| that we were reading stories about how food delivery services
| were providing restaurants an opportunity to keep their doors
| open during COVID lockdown.
|
| Restaurants only hate food delivery when the companies try to
| force them to lower prices (so the delivery service can capture
| the margin) or when they perform bad-faith actions like
| misrepresenting themselves as an official partner of the
| restaurant when no such deal has been made.
|
| The restaurants who simply prepare orders at their normal
| retail price and hand them off to delivery drivers who deliver
| to customers who know what they're getting into are actually
| loving this boom. It's extra business without the hassle of
| dealing directly with customers.
|
| That's actually the driver of the problems: Restaurants have
| been so eager to get a piece of this booming business that some
| of them have given up their own margin to partner with delivery
| services looking to squeeze every dollar out of the
| restaurants. I suspect that era won't last long as restaurants
| do the math on what it's costing them.
| kgog wrote:
| > It wasn't that long away that we were reading stories about
| how food delivery services were providing restaurants an
| opportunity to keep their doors open during COVID lockdown.
|
| Can you link to some stories? I didn't see any in my bubble.
| LegitShady wrote:
| >That's actually the driver of the problems: Restaurants have
| been so eager to get a piece of this booming business that
| some of them have given up their own margin to partner with
| delivery services looking to squeeze every dollar out of the
| restaurants. I suspect that era won't last long as
| restaurants do the math on what it's costing them.
|
| They don't have a choice, with covid etc. Many restuarants
| would rather not have delivery, or delivery that didn't cost
| them 20% of gross.
| nickff wrote:
| Most restaurants would rather not pay rent/lease and
| property taxes that eat more than 20% of gross, yet those
| are recognized as 'costs of doing business'. These
| restaurants are unfortunately locked in to a business model
| that is incompatible with COVID.
| nodesocket wrote:
| Yet another cash grab on technology companies by a EU country.
| Perhaps instead of driving companies out of the EU and then
| slapping them with random fines and regulation they should
| consider reforming their laws to be more business friendly.
| _jal wrote:
| They are hardly the first companies to play regulatory chicken.
| It pays off nicely if you win; I do wish that sophisticated
| investors and managers who make a bad bet would whine less.
| onli wrote:
| Those are not technology companies. They are logistic companies
| with some IT integration. And it's a bit different than with
| Uber: There, a lot of the resistance was indeed to protect a
| monopoly that was bad for customers. But food delivery? That
| worked just fine before those companies arrived.
| rightbyte wrote:
| Taxi worked too. The way too capped supply taxi market is a
| US problem.
| aneutron wrote:
| I really can't make up my mind. On the one hand, it's truly
| unhealthy for the overall job security and the social construct
| (which is normal given it's modelled after the US).
|
| But on the other hand, it would have been a fucking travesty
| doing a lockdown without ordering on Uber eats and Co.
|
| And those platforms were the innovators in the space. Restaurants
| who could develop similar platforms would have never allocated
| the money, and others who would never have had the opportunity to
| offer such services, would have never tapped the overall market
| (i.e. People with Internet who are hungry and need food for any
| reason, be it no groceries or just laziness).
|
| Can't there be some sort of middle ground ?
| bilekas wrote:
| Also I know what you mean about the job security and so on, but
| this industry was previously provided by the
| restaurant/businesses which would offer a base salary and then
| tips were there's lets say. But deliveroo uber and co, offered
| the riders a means to earn more money with less job-security,
| the restaraunts to reduce the fees of delivery..
|
| It was a pretty balanced trade-off.. To which both concerned
| parties did agree.. Goverment wasn't even needed here. I feel
| worse for the delivery people in all this because they wont
| have that extra money, instead deliveroo and co will just
| reduce their earnings to compensate.
|
| It's stupid.
| jeroenhd wrote:
| The American and most of the European labour market cannot be
| compared like this because of the way regulations in these
| areas work.
|
| The problem is not that Uber Eats and Deliveroo are making too
| much money, it's that they're making it over the backs of their
| employees.
|
| European employment regulations have strong protections of
| workers, and these companies try to work around those
| regulations by classifying their employees as gig workers.
| Delivery drivers used to be regular employees until these
| companies swept in and used investment money to work the
| competition out of the market.
|
| It's no wonder the government is stepping in to end this. In
| the US, this would never happen, because the right to start a
| job without too much paperwork or get fired on the spot is
| deeply ingrained in the laws of many US states, at least
| compared to European labour relations.
|
| The middle ground here is that delivery drivers need to be paid
| fair minimum wages with the relevant job protections so that
| restaurants can compete with their own delivery crew without
| major (foreign) investment. Your local pizza joint can never
| compete against Uber or Deliveroo without some kind of tax
| evasion, that's part of the design of the Big Delivery business
| structure.
|
| These delivery companies make plenty of money, there's no risk
| of them running into impossible to overcome that their general
| investment-based mode of operation hadn't already planned for.
| They may need to raise prices to pay their employees decent
| wages, but that's only healthy for the free market. In some
| countries (like mine), delivery companies take a whopping
| 12-14% of the entire bill as compensation for delivery, which
| is often listed as free, yet it's economically inviable to go
| up against these giants now that they control the market.
| [deleted]
| ahelwer wrote:
| I went through an entire year of lockdown across two major
| cities without using a delivery service once. Just go out and
| pick up the food yourself, either on foot or via bike or car.
| tomcooks wrote:
| Hot take:cooking your own food
| ahelwer wrote:
| Also a good solution, although I tried to eat takeout once
| a week to help keep local restaurants from closing.
| tomcooks wrote:
| Why a travesty? Is your part of the world locked out of
| supermarkets?
| newsclues wrote:
| The software needs to be run by the restaurants so they own the
| entire experience.
|
| I think restaurants would love to pay $xxxx upfront and a small
| monthly or annual fee for updates.
|
| But software developers want a slice of the revenue.
|
| It's greed in a low margin industry.
|
| It's a perfect Open Source project.
| bilekas wrote:
| No.. This is not a good idea.
|
| Sure there is merit to them being "coordinated and continuous
| workers", I can see the argument for that regardless of the gig
| economy. But having to back-pay the taxes for said workers is
| close to extortion.
|
| My Middle ground would be a mediator instead of an ultimatum.
|
| > Should the platforms hire all 60,000 couriers, there's a high
| price to pay to catch up on previous, missed social security
| payments, said European labor law specialist Luca de Vecchi.
| Social security contributions in Italy can amount to up to 33
| percent of an employee's salary and must be paid by the
| employer.
|
| This is just crazy.. How can the government expect a company to
| backpay what the government allowed in the past ?
|
| This is wrong.
| jdsully wrote:
| If you wrongly classify an employee as a contractor the IRS
| will go after you for back payroll taxes. It's not extortion,
| its collecting taxes you illegally avoided.
| bilekas wrote:
| Think about what you just said.. If it was okay to be
| classed as a contractor in FY2018, then the legislative
| said no you need to backpay. FY2018 is no longer valid..
| Even though, they approved it, IRS accepted. See my point ?
|
| You cant retrospectively change the status of their work
| status.
|
| You didn't wrongly state your status at the time..
| VWWHFSfQ wrote:
| Why these companies do business in the EU at all is beyond me.
| jimnotgym wrote:
| Why these companies try to force EU workers to work under US
| labour laws is not beyond me.
| TrackerFF wrote:
| Correct. If skirting around labor laws is part of your business
| model, Europe is not the place to do business.
| lwkl wrote:
| Yes I hope they get kicked out of Europe. We have no need for
| companies that want to get around our employment laws and don't
| pay social security.
|
| That's parasitic behavior. In the end society has to pay the
| long-term cost for their short-term gain.
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