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Codependent Contracting: Couriers Demand App Company Accountability 

Wednesday, Apr 22 2015
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Some of the names of people in this story were changed to shield their identities from the companies they work for.

It's last call for frozen yogurt on a warm, March evening, and Loving Cup, the hand-churned frozen yogurt parlor at Union and Polk streets, is packed. Evelyn and I had raced over here after delivering a mac and cheese and "decadent toast" — practically a bargain at $3.95 — to a young woman in Pacific Heights. Now we're waiting to ferry a single order of chocolate froyo with black bottom fudge, crunchy peanut butter, and pretzels to a man in the Marina.

Everyone in this tiny storefront is playing the San Francisco waiting game — staring at their smartphones, staring at their neighbor's smartphones. But for Evelyn, who is pissed that her frozen yogurt order wasn't placed in advance, every minute that ticks away has a price. This job will probably only be worth $5 or $6, and the longer it takes, the worse that figure looks.

The only other person of color in the store (Evelyn is African-American) is a young Asian woman who appears to be similarly agitated about the wait. She turns and eyes Evelyn's phone.

"Postmates?" she asks.

"Yeah, Postmates," Evelyn responds.

The woman smiles and makes a joke, taking credit for the car parked illegally right outside the front door. Evelyn and I laugh. We're parked illegally in the spot next to hers.

It takes a half hour to get our order, and then we're delayed further by a brief contretemps with an angry delivery driver for the Thai restaurant next store, whose reserved parking spot Evelyn took. The driver has double parked in front of Evelyn's Prius, but she climbs through the passenger side, leans on the horn, exchanges rude gestures and profanity with guy, and wins a glaring contest. We speed off to the Marina and make the drop.

As we walk back to the car, Evelyn checks her phone. The commission for the frozen yogurt job, which has taken almost an hour, is $6.60. "You better appreciate that ice cream," she mutters.

Two months ago, a bum job would have been no big deal, because Evelyn was pulling in $25 an hour working for Postmates. But an app upgrade in February turned the Postmates system on its head and left workers scrambling — or crawling over the emergency brake, in Evelyn's case — to make ends meet.

Welcome to the world of codependent contracting, where a wage cut is recast as a software upgrade.

Postmates is the kind of startup that populates the dreams of a thousand weary brows in SOMA's tech hostels. Launched in 2011, it's a leading competitor in the growing on-demand economy alongside similar companies like Amazon Prime Now (same-day delivery of Amazon orders), WunWun (whatever you want, within an hour), Caviar (meal delivery from select restaurants), and Instacart (groceries brought to your door). If you live in a Postmates market — a growing list of cities including San Francisco, New York, Washington D.C., Los Angeles, Seattle, and Boston — you can order any item from a restaurant or store and expect it to be delivered within one hour.

According to TechCrunch, Postmates has raised $58 million in venture capital, including $35 million from Spark Capital at the end of February, and is valued at between $150 million and $200 million. In March, co-founder Bastian Lehmann tweeted a graph of Postmates' growth that helps explain that high valuation: The company is "scaling." It took Postmates 116 weeks (two years and three months) to reach 500,000 deliveries, but the next half-million deliveries took just 20 weeks. The next half-million deliveries after that were completed in just 10 weeks. With new markets opening all the time, and a new partnership in the works to deliver Starbucks coffee, Postmates is hoping to corner the market for on-demand delivery to professional urbanites.

Powering Postmates' rapid expansion are people like Evelyn, who make up the supply side of this on-demand gig economy: the workers. These are the men and women racing around major metropolitan areas on cars, bikes, and scooters at all hours, catering to people with 9-to-5 jobs and enough disposable income to pay a delivery fee on top of the $7.25 cost of an artisanal frozen yogurt. Those workers are part of the growing legion of freelancers in the United States — 53 million strong, or 34 percent of the entire workforce, according to a study commissioned by the Freelancer's Union in 2014 — who are patching together a living with a delivery here and a four-hour shift there, dispatched by smartphone from 21st-century digital hiring halls.

Postmates and its ilk may be raking in venture capital because they promise to change the way their customers live, but the companies have already changed the way people work. Apps like Postmates are putting paid work into the hands of anyone (well, anyone with a car, bike, or scooter who lives in a major city and can pass a background test). Once a potential worker has gone through a quick "onboarding" process — usually just an hour or two seminar that teaches workers how to interact with the app — they can work as much or as little as they please.

There's no obvious downside for the companies to make work easily available to as many people as want it, because the companies are not paying couriers as employees. Instead, the workers sign on as independent contractors, responsible for their own schedules, expenses, health insurance, and taxes. Postmates has about 10,000 couriers working nationwide (the company refers to its couriers as "Postmates"), all classified as independent contractors. Uber, which pioneered the independent contractor model for tech startups, had about 160,000 drivers using its platform in December. According to a study of the so-called "sharing economy" by PriceWaterhouseCoopers, this kind of online staffing is projected to grow 37 percent by 2025.

Well, there's no obvious downside yet. Shannon Liss-Riordan, a Boston labor lawyer, has filed a series of class-action lawsuits challenging various tech companies' classification of frontline workers as independent contractors. Liss-Riordan started with the ride-hail companies Uber and Lyft, but recently filed similar suits against Caviar, Homejoy (which provides home-cleaning services), and, on March 19, Postmates.


About The Author

Julia Carrie Wong

Julia Carrie Wong's work has appeared in numerous local and national titles including 48hills, Salon, In These Times, The Nation, and The New Yorker.

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