BUSINESS
07/01/2021 20:51 GMT

In Wake Of Prop 22, Albertsons Shifting In-House Delivery Jobs To Gig Work

Unions representing the grocery chain's workers say the decision will drive down wages and make the work less stable.

One of the largest grocery chains in the U.S. has decided to end much of its in-house delivery service, outsourcing the work to third-party companies like DoorDash that rely on independent contractors to drop off food to customers on the cheap.

Unions representing workers at Albertsons say the chain’s decision will end up degrading good delivery jobs by putting the work on a “gig” model. Independent contractors tend to bear many of the costs of employment, providing their own vehicles and covering wear and tear, while forgoing traditional work benefits like health coverage and a retirement fund.

Albertsons told HuffPost that DoorDash was one of several third-party companies that the grocer would shift the work toward, “to compete in the growing home delivery market more effectively.” The company said it’s e-commerce business has exploded during the pandemic.

“While we know that this move will help us create a more efficient operation, it wasn’t a decision we made lightly or without a great deal of consideration,” an Albertsons spokesperson said in an email.

While Albertsons did not cite the new California law known as Proposition 22 for the decision, several major California markets will be impacted by the policy change. Prop 22 makes it easier for companies like DoorDash to classify their drivers as independent contractors.

The change is scheduled to take effect on Feb. 27.

The decision by Albertsons was first reported by KnockLA, which said that Albertsons chains Vons and Pavilions would be firing union workers. But Albertsons said it would be offering the affected drivers other positions within stores and warehouses, and both Albertsons and union representatives said jobs under union contracts would not be impacted by the change.

For all our nonunion drivers who can’t bargain, it’s really messed up.Jim Araby, UFCW Western States Council

The United Food and Commercial Workers union condemned the move by Albertsons. Jim Araby, director of UFCW’s Western States Council, said his union represents around 250 drivers in California’s Bay Area who work for Albertsons subsidiary Safeway. Those drivers organized about two years ago and are in the process of securing their first contract; their jobs will not change as a result of the new arrangement at Albertsons.

Araby said third-party delivery services appeal to companies like Albertsons because another company has to worry about the fleet and the logistics of employment: “You don’t have to maintain the truck, you don’t have to worry about accidents and all that goes with that.” And the third-party companies ultimately don’t have to worry about much of that either, “because everyone is using their own cars.”

According to Araby, both UFCW and the Teamsters represent in-house drivers at Albertsons, but only a small share of the overall workforce. He said even though union drivers would not be impacted by the change, he believes grocers’ increasing reliance on companies like DoorDash will imperil more in-house jobs over time.

Geri Lavrov via Getty Images
An Albertsons store in Buellton, California.

“And for all our nonunion drivers who can’t bargain, it’s really messed up,” Araby said. “I think it’s an example of corporate greed.”

He said his union is considering filing a grievance, believing the change may run afoul of provisions it has bargained related to subcontracting.

Albertsons declined to say how many positions would ultimately be eliminated, but that it “plan[s] to offer positions to each impacted associate.” Those who don’t accept the transfer “may be” eligible for severance pay: “We will work with them on their individual situation.”

The move comes against the backdrop of Prop 22. In 2019, California passed a law known as Assembly Bill 5 making it harder for gig companies to classify workers as independent contractors rather than employees. Prop 22, which voters passed in November, excluded app-based drivers from the earlier law, protecting the contractor system at companies like Uber, Lyft and DoorDash.

Those companies spent heavily to get the measure passed. Unions and their allies on the left viewed the success of Prop 22 as a major setback in their fight with Silicon Valley and the growth of the contract workforce.

Adan Alvarez, a spokesperson for Teamsters Local 396, called the decision by Albertsons a natural response to Prop 22, now that the gig model is secure in the state among food delivery drivers. His union represents employees working out of Albertsons warehouses in Southern California. Although no Teamsters will lose their jobs, he said he expects the new jobs to be less stable than the ones being eliminated.

“This is an example of what we predicted. It’s giving companies an open door to chip away at employee-based jobs,” Alvarez said. “These [Albertsons] employees, they weren’t unionized. But they were still employees with wages and benefits.”