"Everyone knows that modern monopoly is engendered by competition itself."Karl Marx wrote these words in 1847. Some 177 years later, the intrinsic tendencies within capitalism towards monopolisation have reached a gigantic scale. Food delivery is emblematic of global capital's drive to absorb its competitors. In recent newsletters we have highlighted the troubles of Delivery Hero, the German multi-national which owns brands such as Glovo, Foodora and FoodPanda. Delivery Hero has become a target for 'activist-investors' seeking change at the top due to the company's struggles to convince their financial backers that they are on a path to profits. Now, Delivery Hero has taken its first steps to being consumed by a bigger rival: Uber.On Monday [13 May], the Silicon Valley gig economy giant bought FoodPanda's Taiwan unit for $950 million, giving Uber Eats a virtual monopoly over the Taiwanese market. Even more significantly, Uber has agreed to acquire newly minted shares in Delivery Hero itself worth $300 million. The news of the deal immediately gave Delivery Hero's struggling share price a shot in the arm, rising almost 20% on Monday. It ended the week 25% higher than it started, a major boost for a company that had collapsed from a value of €130 per share in February 2021 to €16 per share two years later. "To build a world-leading service, we have come to the conclusion that we must focus our resources on other parts of our global footprint, where we believe we can have the greatest impact for customers, suppliers and deliverers," CEO Niklas Östberg said in announcing the deal. But in many of those other parts of the world, Delivery Hero and Uber Eats are - or were - direct rivals. In Spain, for example, Glovo and Uber Eats are number one and number two in the market. We have identified ten other countries (excluding Taiwan) where both companies operate in: Portugal, Poland, Kenya, Thailand, Chile, Ecuador, Dominican Republic, El Salvador, Guatemala and Panama.The risk of 'anti-competitive' practices in these 11 countries should be obvious. For food delivery couriers trying to scrape together a living through 'multi-apping', are they going to find that both companies are levelling their pay rates downwards? If Uber goes on to grow its stake in Delivery Hero, the danger of monopolistic pricing will expand with it. The proven link between monopoly power and lower wages has its own word, 'monopsony'.It's worth remembering that Delivery Hero is already under investigation from the European Commission for potential 'anti-trust' behaviour in relation to Glovo, which it purchased on New Year's Eve 2021, with Delivery Hero and Glovo's offices raided last November. "The Commission has concerns that the companies concerned may have violated EU antitrust rules that prohibit cartels and restrictive business practices," the Commission stated at the time of the raids. The Commission has not proven very effective at using its power to restrict the tendency towards monopolisation in European capitalism, despite its mandate in this area, with the number of mergers and acquisitions growing rapidly since the EU was officially formed in 1993. Tommaso Valletti, former Chief Competition Economist at the Commission, has even described the inaction at the Commission in recent years over monopolisation as "crazy". Nonetheless, the investigation into Delivery Hero should give some hope that action in this sector is possible.
But we should bear in mind that monopolisation has just as much political consequences as it does economic. With greater market control and consolidation of resources, monopoly players can buy political reach into the institutions, which we know was a factor in the EU Platform Work Directive legislative process. In the US, Uber and Lyft use their combined market power in the ridehail sector to threaten federal states to scrap plans for a minimum wage for drivers or else they will leave.
Every time capital is concentrated in the platform economy, platform workers' industrial and political fight for better working conditions gets that bit harder. But it's not just about the effects on workers: monopolies are notoriously bad for customers too. An Uber takeover of Delivery Hero might be good for Uber's flagging profitability, but it should be opposed by everyone concerned about the pernicious effects of too much power in the hands of too few CEOs.Ben Wray, Gig Economy Project co-ordinator
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Gig Economy news round-up |
- AUSTRIAN LIEFERANDO RIDERS STRIKE AGAIN: Food delivery couriers at Lieferando (Just Eat] in Austria went on strike again on Wednesday [15 May] to demand a significant wage rise. A sixth round of negotiations between the Vida union and Lieferando broke down, with Vida demanding 8.7% and Lieferando offering 5.8 per cent. The 11am-2.30pm strike of the approximately 2,000 Lieferando couriers in the country saw protest rallies take place in Vienna, Linz, Innsbruck, Klagenfurt and Graz. The first strike at the beginning of March was the first of its kind in Austria, where industrial relations conflicts are usually resolved around the negotiating table. Lieferando riders are employed and covered by a collective agreement, but the union says that the wage increases contained in that agreement do not account for the sharp rise in inflation in recent years, with prices growing by 25% from 2020 to May 2024. “We have asked employers to sit down with us again,” Yvonne Rychly, deputy chairwoman of Vida for the state of Vienna, told the APA on Wednesday. Read more here.
- BOLT THREATENED TO MOVE HQ OUT OF ESTONIA OVER PLATFORM WORK DIRECTIVE: Estonian multi-modal platform Bolt was pushing to influence the EU Platform Work Directive right up until the eve of the final decision, an investigation has revealed. The EU Observer found that "Henri Arras, former policy advisor to the prime minister of Estonia and now head of public policy at Bolt, and Katrin Juhandi, director of EU affairs of the Estonian government office, discussed the directive multiple times just a week before the final vote in March". Furthermore, Bolt even "threatened to move their headquarters out of Estonia". The revelations come just weeks after Euractiv published information showing the extent of Bolt's lobbying influence on the Estonian government during the Spanish Presidency of the EU last year. Estonia eventually voted for the Directive on 11 March, but only after the text had been significantly watered-down from that negotiated with the European Parliament under the Spanish Presidency. Meanwhile, Bolt announced on Tuesday [14 May] that it was making a €100 million investment in France. The announcement coincided with French President Emmanuel Macron's 'Choose France' summit, an effort to attract foreign investors into the country. Over 50% of the investment will go towards offering around 50,000 Bolt drivers in France hybrid and electric vehicle options. The rest will go towards a driving centre, a 'Bolt Academy' and introducing more electric scooters - which have been banned in Paris - and bicycles. Read more here.
- RIDERS PROTEST IN TURKEY AFTER RIDER MURDERED: Turkish food delivery couriers have taken to the streets across the country on Friday [17 May] to protest unsafe working conditions, after a rider was murdered in Istanbul on 11 May. A video on Twitter shows hundreds of riders demonstrating in different parts of the country. Ata Emre Akman, a student and Domino's Pizza courier, was attacked after making a delivery on the way back to his motorcycle. Akman was stabbed 25 times and died before the ambulance arrived. Video footage emerged showing the killing, leading to the arrest of the assailant and sparking widespread outrage and debate in Turkish society about the treatment of the country's couriers. The Delivery Workers' Rights Association, which organised the protest on Friday, has published reports on rider deaths in Turkey, finding 58 died at work in 2022, 68 in 2023 and so far 22 in 2024. The protests were organised under the slogan: "We Don't Want to Die While Working / Justice for Ata Emre Akman." The Association is calling for rider groups and unions to organise solidarity messages and actions worldwide.
- GETIR'S INTERNAL DIVISIONS INTENSIFY: Struggling grocery delivery platform Getir is facing internal strife, as management and the company's main investor are divided over the company's strategy. Two weeks ago, Getir pulled out of all of its foreign markets, leaving it operating only in Turkey, as the company desperately tries to cut costs to survive. But Mubadala, the company's Abu Dhabi wealth fund investor which holds a 30% stake in the firm and pushed for the pull-out from foreign markets, also wants the company to downsize its operations within Turkey. Bloomberg reports that the management, led by co-founder and CEO Nazim Salur, is opposed to Mubadala's approach and on 6 May Salur - who's stake is smaller at 25% - sacked Chief Strategy Officer Derya Erdemli, who backed Mubadala's downsizing plan. The company was at one point worth $11.8 billion but rising interest rates and inflation exposed its model of subsidising deliveries to grow market share. The company was burning through over $100 million a month as of June last year. It's last valuation was in September, when it was worth $2.5 billion, and it is likely to be valued at a lot less now after it pulled out of every foreign market. Mubadala has linked new investment to changes in the company's management. Meanwhile, in Berlin, where Getir and Gorillas (owned by Getir) are both being wound-up, 'jungeWelt' reports that managers are disappearing and workers are receiving meagre severance pay. Read more here.
- GOPUFF TO CUT 6% OF GLOBAL WORKFORCE: American grocery delivery platform GoPuff has announced a new round of job cuts which will see hundreds of workers on the chopping block. The Philadelphia-founded company has just under 10,000 employees, meaning around 600 workers will be affected. It comes after 2% of its workers were laid-off in March last year. GoPuff entered the European market in 2021 but has since pulled out of Spain and France, and only remains in the UK. The 'Q-Commerce' company has suffered from the same problems affecting all players in this space: falling demand after the pandemic and the 'tech downturn', which has seen financial investors pull-back from bank-rolling companies which are not close to profitability due to interests rate rises raising the cost of money. GoPuff, one of just a few specialist Q-Commerce players still operating anywhere in Europe, burned through $400 million in 2023. The company says it wants to be profitable within two years. Read more here.
Have we missed something important? You can help keep us informed by sending information to GEP@BraveNewEurope.com. |
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- The IWGB union is organising a protest outside Deliveroo's AGM in London on 23 May. See here for more.- From 22-30 May, the elections for worker representatives to the French 'social dialogue' system in the platform economy, called The Social Relations Authority for Employment Platforms (ARPE), will take place. - The University of Edinburgh and the Workers' Observatory is hosting an event titled 'Cracking the Black Box within the Platform Economy'. The event will take place on Wednesday 5 June 5.30-8pm GMT at The Melting Pot, 15 Calton Road, Edinburgh. For full details and to buy a ticket, click here.
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The Gig Economy Project is a media network for gig workers and we welcome contributions from workers, writers, academics, activists - anyone who wants to stand up for workers' rights in the gig economy.
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