Foodora is a company founded in 2014 in Germany that specializes in food deliveries via bicycle, moped and car. The company’s operations currently span 19 countries in North America, Europe and Asia. Foodora has previously also been active in Australia and the Netherlands, but has today ceased operations there. In November 2021, Foodora’s Swedish operations included 2,500 bicycle and moped couriers and around 2,000 car couriers, and operated in 28 cities. [1] [2]
In 2021, Foodora became the first Swedish gig company to sign a collective agreement. In connection with this, Gigwatch revealed that hundreds of couriers for the company were not covered by the agreement, as they were employed through a parallel company. [3] In January 2022, these couriers are still not covered by the collective agreement, and the group has today grown to over 2,000 couriers. [4]
Working conditions
The hourly wage for the couriers was reported in 2020 by Sydsvenskan as SEK 70 per hour plus SEK 20 per completed delivery. [5] According to a bicycle courier interviewed in Stockholm Direkt, a person with about three deliveries per hour has time. [6] The couriers compete for the assignments, and are not allowed to decline the assignments they are offered without risking the job. As fewer deliveries mean lower wages, the hourly wage can be as low as SEK 100 per hour, compared with the collective agreement for bicycle couriers where the minimum wage is SEK 130 per hour. [7]
The bicycle couriers work in scheduled shifts where a pass is on average five hours. Foodora claims that the job as a courier should be considered an extra job, but according to a surveyed worker, many have it as full-time employment and the only source of income. The couriers sign short-term contracts of one month at a time to work for the company, contracts that are not renewed if they perform too poorly [8.1 + 8.2]
A review made by Sydsvenskan 2020 shows how couriers are pressured to increase the pace in order not to get fired, through weekly ratings of their performance in relation to their colleagues. Those who do not belong to the top 50 percent in performance are threatened with dismissal. The article also describes that couriers have great difficulty planning their lives because Foodora gives them schedules only a week in advance and can extend or shorten work shifts without notice. [9]
A central part of Foodora’s business model is that the company itself does not provide any of the tools and vehicles that are necessary to carry out the work. Instead, it is up to the couriers themselves to provide, for example, bicycles, and also to be responsible for all forms of maintenance. According to a former safety representative at Foodora, it can cost up to SEK 2,000 to service a bicycle, which is a cost that bicycle representatives must bear on their own. [10]
Controversies
Foodora said no to paying for safety equipment such as winter tires, but in the end had to go to bed following a decision from the Swedish Work Environment Authority. [11] Despite this, safety is still deficient at the company: in September 2019, Breakit showed that Foodora has so far during the year reported an average of every other day, where bicycle couriers, among other things, injured their knees and knocked out teeth in traffic. [12]
Foodora has received serious criticism from both the union and the Swedish Work Environment Authority for poor working environment, which has sometimes resulted in serious injuries for those who work for the company. [13] Abroad, Foodora has in several cases also come into conflict with trade unions. In Australia in 2018, the company ended up in a legal dispute with a trade union that claimed that Foodora’s business model led to the exploitation of the workers. The business model has led to workers losing out on wages, insurance and rights that come with employment. For example, the company refused to reimburse a bicycle courier who was injured in a traffic accident. When Foodora withdrew from Australia, they left many drivers unpaid with an estimated total of 5.5 million Australian dollars and with unpaid taxes of 3 million Australian dollars.[14] [15]
Ownership
Foodora is owned by the parent company Delivery Hero, which in Sweden is also behind Onlinepizza and Hungrig.se. Delivery Hero is in turn owned by Rocket Internet, a venture capital firm designed to fund start-ups. In November 2019, Delivery Hero decided to let the brands Hungrig.se and Onlinepizza appear in Foodora. [16] The company is making a big loss. [17]
In addition to poor working conditions for its employees, Foodora has also been criticized for the high fees restaurants have to pay to use the app, which makes it difficult for them to survive. Foodora takes both the delivery fee and then a further number of percent of the price of the food. At least 30% of the amount on each order is put by the gig company in its own pocket, and the restaurants need to pay extra to be visible on Foodora’s website. Especially during the corona pandemic, many restaurant owners have testified that they do not go plus at all due to the many home deliveries, because Foodora takes such a large part of the profit. [18]