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Instacart to cut 1,900 jobs, including its only union roles (bloomberg.com)
245 points by Jerry2 42 days ago | hide | past | favorite | 237 comments

While I like and use Instacart, the model is wrong. I am paying too much for a slightly unreliable service and the employees aren't getting paid enough. The stores should provide the shoppers, delivery should be a separate service, and the cost should be about a $15-30 premium for a large grocery order (15+ minutes of order picking + delivery similar to a cab ride). That leaves the ordering platform, which might be a nice niche for Instacart to provide across multiple stores.

Anyway, this has been a tough business all the way back to Webvan!

I will say this - at least in my local bay area Whole Foods, which I know isn't instacart anymore; there are the online shopper order fillers, they work IN the store but clearly not FOR the store.

I'm going to sound like a huge snob, but it makes the in-store shopping experience much less pleasant. The actual whole food workers are always there for you and go out of their way to help you, I don't expect the online shopper order fillers to help me, but they at best DGAF about the in-store shoppers and at worst are hostile towards them.

They speed past people and around corners with carts, cut in line at the fruits and veggies, ask WF employees to help them find items while you've waited to talk to them and in return, flat out ignore actual in-store shoppers when they ask for help. If you're out of the tech loop and don't realize that they are incentivized to fill orders, you might think the online shopper fillers are part of the WF staff there to help you. Knowing this, it's not too jarring to me to see a customer go up to one of them and have their many 'excuse me's just ignored, not even acknowledged.

They need shirts that say don't ask me for help; I know the way they are incentivized to fill as many orders is what creates this behavior - that needs to be looked at as well in my opinion.

During my last few trips to Safeway and Whole Foods I estimated about 50-75% of shoppers were delivery app drivers. I know the SF experience isn't typical, but it was still mind boggling.

Resistance to it doesn't have to be snobbish either. The entire grocery business model today is designed for people shopping for themselves. Stores occupy the largest and most expensive retail spaces in the center of the neighborhood. There are wide aisles, fancy decor and complex layouts to showcase products and keep people inside. I love going to the grocery store without a list or any agenda and coming out with a new interesting dinner option, buying loaves of bread on impulse because they just came out of the oven and smell great, talking to the butcher about fresh cuts of meat, getting a recommendation for a new wine or cheese to try out. Like myself I imagine grocery shopping is as much a hobby as bare necessity for others as well.

If delivery becomes a norm then none of this will exist anymore (at least at an affordable price). Grocery stores will just be large warehouses outside the city optimized for serving pre-decided orders as quickly and efficiently as possible.

Now I finally what this scene [0] from the HBO show was about. As a European, I never understood!

[0] https://www.youtube.com/watch?v=CrDjRZ9AfQ8

The Brooklyn Wegmans is the same for what it’s worth, 60-70% instacart shoppers some times of day.

I was just thinking about this. You would think that some of the grocery suppliers would get wise to the fact that these customer bases need drastically different experiences.

A consumer grocery shopper wants like with like (including in multiple locations. e.g. I want chili powder in the spice aisle, and with the mexican food), lots of variety, things organized by price. etc...

A food order picker wants something that looks like an ikea warehouse. Pick items x,y,z from bins a,b,c in aisle 3. They could probably care less if like is with like, as long as there is an easy way to find substitutes. They want to work with a bunch of people that are 'on a mission' like they are. And not have to deal with people like me who read the marketing copy on each type of Newman's pasta sauce.

Hey - It's me, your friendly supermarket supply chain guy! (I now consult on this stuff)

Picking in store has a huge number of cost base efficiencies compared to using a 'dark store'. These are as follows:

* Reduced property costs and property overhead.

* Having 5 vans in 300 locations is better than having 300 vans in 5 locations from a transport perspective (you get much closer to the customer, or have to tranship through hubs).

* Depending on locale, store workers may have more relaxed terms and conditions and unionisation than industrial warehouse workers, which 'warehouse' workers may get dependent on setup.

* Every darkstore you have needs to be fully stocked. This isn't so much of an issue with long-life products, but is an issue with fresh products that need to be sold before their expiry. A darkstore has a 'minimum viable size' with these fresh products dependent on the range you want to offer. Bigger darkstore with more customers means a bigger range - but you are also further away from the customer so either you have a bigger stem distance or need to do trunking to hubs and tranship from there.

So it's not about getting wise, trust me we think about these things and will model what is the most optimum way to deliver, at least in the UK :) An incredibly rough rule-of-thumb of logistics in the UK is that 1/3 of your money is spent on transport, 1/3 is spent on warehouse labour and 1/3 is spent on fixed costs (building, rent, utilities, equipment) - so your saving on labour has to be significant to pull back the fixed cost benefit of running out of an existing retail estate.

This is in the UK - most supermarkets have their own in-store pickers and will deliver with vans in the back. We have one company (Occado) that has a few large DC's and will tranship to outbases with vans. Some supermarkets have these dedicated 'darkstore' facilities in super-dense areas (e.g. Tesco, Asda), but they don't work in most areas of the country and in most cases are actually more expensive to run than in-store picking operations (they are done for capacity reasons rather than cost reasons).

The advantages of the centralised approach tend actually to be about service. If I can centralise to a big enough warehouse, I can offer a better range and offer things like visibility of expiry dates.

Something tells me that online grocery shopping may evolve into this format- for the reasons pointed out, it doesn’t make a ton of sense long term for these two formats to be bundled once there’s enough demand for both (which at this point, it seems like there is). These seems to be what Amazon Fresh is doing.

Exactly. Like segregation of B2B and B2C traffic and route them through servers that have different SLA and capabilities.

I guess the current model where couriers shop at the retail store is a result of hacking up an MVP. It’s very inefficient at scale. Once the grocery stores and retailers deeply integrate with the delivery companies a more efficient workflow will emerge. Something closer to what you just described.

I personally think this deteriorated the in-store shopping experience. There were too many folks running around - it's a different vibe. Never felt that even when stores were packed with regular customers. In addition, some stores blocked out quite a big area within the store for fulling these orders as staging area.

I wonder if they could have that staging area in the back (warehouse or what ever it is called), which wouldn't directly impact the in-store shoppers.

My local WF used to be a nice place to shop before the acquisition. But once Amazon took over, the place turned into an assembly line! It's like you were stepping into a turn-of-the century factory (well, turn of the _last_ century). I just stopped going there.

For me, other than the online order filler folks, I've been surprised by how other little change I've noticed. Aside from promoting kindles in locked glass cases and for some reason ice chests, I hadn't noticed a change.

Yah, Amazon changed the vibe of the place. It's gotten a lot more visually distracting with the visible blue prime stuff everywhere and all the loud reminders for prime rewards and other marketing peppered around the store. Different physical presence too with the Prime Now bagging/staging areas, and the Amazon lockers too.

+1 on the stores providing the shoppers-- I've used Instacart a few times in Washington DC and I'd say it's more than a little unreliable here. I've had such amusing results as:

- Four bunches of ~7 bananas instead of 4 individual bananas

- A single cherry tomato instead of one pound of cherry tomatoes

- Candied walnuts substituted for fajita seasoning

I'm not overly upset about it, but the main problem is definitely the quantity issue-- several different drivers have purchased absurd quantities that seem like something one would obviously question and double-check. Or that something would be flagged when the price is so far outside the expected price on the app. I would think this would be totally solved by store-provided shoppers though.

I loled at "Candied walnuts"

Agree with this. The premise is nice but the execution and shadiness of raising prices so you don't really know how much you are paying for the instacart premium feels bad.

You'd think this business would be going through the roof during the pandemic. If it can't work now, how is it ever going to work?

Well, just to cite one factor, it might work better under conditions where we aren't literally putting people's lives at risk by asking them to shop instead of us shopping for ourselves.

In other words, conditions in which the pool of labor is less heinously and obviously exploited and better workers are easier to recruit for the job in question.

While I agree with you about that, I don't think most people have that logic when they consider ordering on insta-cart. If demand for insta-cart is dropping I would wager that doesn't bode well for its use in the future regardless of the level of talent/exploitation of the employees.

In other words, if all of a sudden insta-cart was much more generous with their employees and managed to hire better talent, that wouldn't likely translate into more demand for their product. Yes places like Trader Joes treat their workers well (and build brand around that) - the lions share of demand revolves around on merits/price. I wish it was more along your factor but sense that it isn't a factor with an order of magnitude change associated with it.

This is how it works in Texas at HEB and Central Market. It's about $10 to do curbside grocery pickup, more around $15-$30 I believe for delivery, which is done through Favor, a delivery subsidiary of HEB.

HEB is $4.95 for curbside, if you want same day or next day times. It is free if you book two or more days out.

Delivery is $5, with the same $4.95 same or next day surcharge as pickup. It is a great deal.

Instacart has a heavy presence in HEB, at least in Austin.

True, but IME it is almost always a much better deal to use the HEB/Favor service for HEB delivery or pickup since the per-item markup is low and fixed for the former, plus it provides and allows for coupon use.

This is how grocery delivery works in the Netherlands. The groceries generally aren't delivered from individual stores but directly from the regional distribution centers. Delivery costs range from free to €10.

Wouldn't Kroger save money by doing direct delivery? Groceries could be shipped direct from the distribution center.

Not really. It still needs to be broken down from large lots to smaller lots. My local store, Metro, uses their physical locations as a delivery staging area - they do large-lot breakdown and distribution as normal, but for an online order, they put it on the "online delivery" cart instead of stocking. This means all deliveries need a 24H advance notice, but it's done for a flat $12 fee for to-your-door delivery, with items at in-store prices.

Once they have all the logistics in place sure, but even for a company like Kroger, which is on the larger side, it's a huge undertaking. Once you tack on liability and other issues, it's a huge project just to get going.

People going to Kroger solve the last mile problem, picking, and substituting for free. These are all expensive problems to pay for solutions on a low margin business.

It sounds insane to me that Instacart even exists.

I guess Instacart was a trailblazer? I don't see why supermarkets wouldn't offer this service and pocket the difference.

In the UK major food supermarket do deliveries or local collection. They're prepared by the supermarket staff in their warehouse, without having to browse the supermarket. They're quite reliable (you order online and you have to pick the products manually) but they will apply substitutions sometimes.

Collection is free if you order over a certain amount.

Covid messed up things (queues got super long / expensive) but overall it's a well working model.

Having used instacart (through Costco) and walmart grocery delivery almost exclusively for the past 10 months.. I'm more amazed at how cheap it is, and I'm a bit worried that employees are not getting paid enough.

Costco is probably the more 'reasonable' one. They mark up the products probably 5-10%. So this one I feel that the delivery people are probably being paid ok.. although my nearest costco is 16 miles away (about 25min).. so it kind of feels like a steal to be able to get delivery from them for what feels like not a whole lot more.

Walmart is closer, but there are no markups.. and I pay whatever $10/mo for free delivery from them. Order multiple times a month.

I'm honestly not sure I'm going to go back to the stores as often even when things are normal.

> Having used instacart (through Costco) and walmart grocery delivery almost exclusively for the past 10 months.. I'm more amazed at how cheap it is, and I'm a bit worried that employees are not getting paid enough.

Are you really? What have you tried to modify this as a result?

Many gig workers have their tips taken away or obscured in some cases, as in the lawsuit settled by Doodash recently, which is most of their total income from these things: the algo sets the base salary as close as the lower minima for it to get picked up.

Have you ever considered just paying them more outright: as in leave an envelope at your door with the sum of money you think they're worth? Or simply asking them to contact you directly to be their personal shoppers if things were done to your satisfaction? I saw the former more often, with token sums like $5/10 by some well intentioned people but really the latter would be the more impactful solution and had been done prior to this for the affluent/exec class long ago.

Just so it's clear, the markup on those apps isn't going to the contractor's pay, its their to generate revenue for the core business to pump its valuation with fluff and prove its MVP has the potential to reach profitability... someday in the undetermined future. The gig worker gets as little as the market will bare most times, the app is optimized that way, and often has to be 'stacked' to make it even worth their time or will remain bouncing around in the limbo if no one picks it up.

I spent a lot of time looking at Doordash's business model during the pandemic while I went back to school or supply chain management after having done supply chain and logistics in the Auto Industry. I even did it myself to understand it's implications as a 3PL supply chain solution ahead of its IPO last year and it was super eye opening.

These things are horrible and are specifically targeted to the ever growing under underclass of Society. I'd say its borderline predatory given how much they gameify it in their favour.

> I'm honestly not sure I'm going to go back to the stores as often even when things are normal.

And quite frankly these apps/platforms are relying on you doing exactly that to justify its business model and will operate at a loss to do so in order for a massive IPO valuation and more VC money.

It's really quite sick, but it seems almost inevitable at this point given how many businesses have been shut down during this pandemic.

If I had the time and resources I would really want to do a talk at the Chaos Computer Club on it, as I think it really needs to be exposed for what it is amongst the Technorati who help built this monstrosity. I saw a Software guy who wanted to get the analytics on rejected offers from various regions with an app that tracked the acceptance ratios and other metrics, so the data exists out there somewhere.

I don’t understand why there aren’t ghost groceries, similar to ghost kitchens or warehouses. Delivery is now large enough that having someone walk around a large store optimized for display, one order at a time, is super inefficient.

Just have warehouses/stores optimized for delivery and batch the orders. Boost productivity and start paying people decent already.

> I don’t understand why there aren’t ghost groceries, similar to ghost kitchens or warehouses.

There are. FreshDirect has a state-of-the-art facility in the Bronx, and I'm sure Amazon has several ghost groceries also -- e.g. they just bought two Fairways locations.

Check out this video of the FreshDirect facility, it's actually pretty amazing: https://www.youtube.com/watch?v=fnIrwrCq_4Q

Pretty cool. Fresh Direct got started early and they rewired the entire supply chain. That's a tall order.

Instacart and the local grocery store should be able to work together to make incremental changes to what they are doing today. That seems like the low hanging fruit that could be put into operation in short order.

I lived in NYC for 11 years and the only things I miss are my friends and Fresh Direct.

That makes me want to try it, I never did because I figured it would be as bad of an experience as Instacart when I lived in Austin.

That's what Webvan was. 20 years too early. Some of the Webvan people went to Amazon and worked on their warehouse technology. Webvan had 3% market share in 30 cities, and they needed 30% market share in 3 cities to be profitable.

Also, back then the technology for sub-minimum-wage delivery gig workers hadn't been perfected yet.

+1. This model also limits the stock to whatever items are available on store shelves.

I put in an order later in the day, and half the stuff I ordered was unavailable because the store shelves weren't being restocked before closing. I was stunned. I had naively assumed that the food was coming from an Amazon-like warehouse, where they knew exactly what was in stock prior to ordering. A pretty terrible experience overall.

I expect Amazon will at some point leverage Whole Foods to build a proper food warehouse with the experience we've come to expect from Amazon Prime. The big supermarket chains better get their act together quick, before Amazon eats their lunch.

> I expect Amazon will at some point leverage Whole Foods to build a proper food warehouse with the experience we've come to expect from Amazon Prime

They do this depending on your metro/area. Here in SF-proper (dogpatch) there is a brick and mortar Whole Foods ~0.7 miles away, but my Whole Foods online orders get packaged from a nearby Amazon Warehouse even closer to my residence.

The experience has been very good for me so far and I have no need for an Instacart-like service.

During the beginning of the 2020 lockdowns, at least one Whole Foods location near downtown San Francisco completely closed to everyone but shoppers for delivery services. I only learned this after walking 15 minutes from my apartment to pick up some much-needed food. I don’t know how long it stayed like that.

Amazon Fresh.

The crazy thing is my local Whole Foods always has a noticeable number of what I assume are Amazon Fresh contractors scurrying around buying large carts of groceries to ferry to people. Fair enough, except didn't Amazon's other employees just go to the trouble of loading everything off of trucks and onto the store shelves a couple hours previously? Why not cut out the middle man and load the goods from the trucks or back room into the delivery vans for the last mile? Hilarious to me that the store floor, optimized as it is for everyday grocery shoppers, is also Amazon's best technology for getting goods out of the hands of one set of employees (excuse me-- contractors-- don't want to bring a lawsuit down on anyone) and into another's.

Last mile delivery is hard to do efficiently. Sending someone into a huge warehouse to pick up and package, say , two cucumbers and a jar of olives, is ridiculous, so you need to collect items destined for last mile delivery in bulk. Then you divide them up further. To do this you need to create a separate section of your warehouse.

For groceries you have the additional challenge that different items need to be stored differently (cooled, frozen) during the time between getting retrieved from the big warehouse and being sent on their last mile.

You can build something for this, of course, but that’s expensive. In the case of Amazon, however, they already have facilities for storing smaller amounts of different groceries products that are relatively efficient for sending small amounts of products on their way for last mile delivery: they own supermarkets.

A decade ago I worked on some retail logistics and we ran up against exactly this problem. The solution we came up with was also exactly this: send workers into the nearest supermarket to collect the requested items from there. If you already own the supermarkets and have staff running around there, it’s a no-brainer. In fact, if you look closely you’ll see many retail companies, both large and small, do this.

We already have this in the UK via Ocardo.

Rather then supermarket employees running around the shop they build automated warehouses specifically optimised for picking/packing efficiency.

I simply don't see the reason for services like Instacart and Amazon fresh to exist... I can already get deliveries picked and dispatched by the super markets themselves. I count 6 different services within 5 miles of my home/office/isolation bunker.

I think the UK's supermarket delivery services were significantly better developed than in the US. I'm not sure why.

I think the original idea behind supermarkets with long rows of shelves was that some work was being offloaded to the customer. An assembly line where the people move and the items are still, or something like that. So, it actually does track that the format works well for Amazon’s purposes.

I don't understand why greengrocers aren't eating Blue Apron's and competitors' lunch. They already have the inventory; put it in a bag with a recipe and drop it off at retail price at a few hundred customers' front doors. No more food spoiling on the stands, faster inventory turnover, good PR.

Blue Apron was slowly collapsing before the pandemic, I have no idea how they've been doing since. I think the main reason groceries aren't competing with them is because it's not a good business for anything other than attracting investors.

The two biggest supermarket chains in Australia, and some independently owned supermarkets in my area offer home delivery. I know Coles and Woolworths do have what they call dark stores, which are set up to serve home deliveries and not open to the public, but most orders are picked at your closest store. I even order produce from the farmers market since you can get home delivery. Most places charge $10 for delivery, but offer free delivery if you spend over $100, $200.

GoodEggs is an example of grocery delivery without a base store. They were struggling pre-pandemic but I bet they’re doing ok now.

There's a startup in the UK with something optimized like that:


Very cool video! Ocado is hardly a startup though. It’s a pretty big public company now.

And i haven't lived in the uk in a while but Ocado is still doing all the deliveries itself I believe, which restricts it in terms of coverage and availability slots, doesn't it? A British friend was complaining that during lockdown there were never any available slots.

Indeed: founded in 2000.

It's worth noting that off the back of Ocado's success, all major UK supermarkets also offer online delivery. And my understanding is that this is mostly serviced directly from stockrooms rather than going via store shelves (albeit individual store stockrooms).

Ocado started deliveries in 2002 selling products from Waitrose shelves, but it was only in major cities (maybe just London?).

Around the same time Tesco (I can't find exact dates, but when I started working there in 2004 it had already been around for a while) launched their competing service, however they did so across the whole country (at any store big enough and with enough parking space to support it).

Podcast talking about one that opened in Auckland this year https://www.rnz.co.nz/programmes/two-cents-worth/story/20187...

Albertsons is testing automated kiosks: https://www.grocerydive.com/news/albertsons-supercharging-e-...

I think Tesco I’m the UK has been doing it for a while now, but it looks like the economics make sense in more dense areas.

Ocado is building a business like Amazon warehouses, where they build warehouses and use their infra to provide fulfilment for other vendors.

There’s quite a few. I think they’re called “dark stores”. https://www.cnn.com/2019/10/30/business/grocery-delivery-pic...

Amazon has one in the East SF Bay. Limited stuff but the inventory tracking seems good. Available via Amazon Prime Now.

There is, door dash are building out teams in Seattle to built this.

> Delivery is now large enough that having someone walk around a large store optimized for display, one order at a time, is super inefficient.

If it isn't apparent by now, the people who are still walking around a large store aren't driven by efficiency. They want something to do / enjoy the routine of it, and don't want someone else picking out their stuff for them.

They were saying the instacart shoppers who shop for other people are not in a warehouse setting but in the actual retail grocery store.

From what I understand from these comments, it sounds like Instacart is going to leverage labor at union staffed stores, like Kroger, to fulfill on its business opportunities.

This seems like a clever form of arbitrage, or shall we call it, disruption?

Is this the new frontier (or perhaps I'm just late to the game in understanding it) where larger online businesses (like Amazon) shift away from full time employment (with the costs associated with it) and let some other "local" or "brick and mortar" legacy businesses try to keep those employees with living wages and healthcare employed while those same "frenemies" (purchasing from them, but also competing with them) avoid those costs?

I spoke to an accountant friend the other day who works for a local independent grocery store. They are really trying to keep their low wage workers on payroll, despite having revenues cut in half because of COVID. Everyone is shopping at Amazon+WholeFoods. If those workers lose their jobs, will they be homeless? I don't think consumers care or think about them, even though they might be their neighbors.

Less arbitrage and more benefit to Instacart/the stores.

Who probably knows a store better: random Instacart shopper or employee of the store?

In the end, Instacart gets faster fulfillment and more accurate fulfillment for a price (whatever cut Kroger etc. take to do this). The stores get direct access to the order data and can then stock their stores better, capture the extra demand, and keep their employees engaged in revenue generating work (Instacart probably pays the store for this service of in-house shopping)

Keep in mind that after Prop 22 in California, some grocery chains (Vons, Albertsons) are replacing their employees with contractors:


Slight clarification - they are replacing their delivery employees with contractors...

Does that make any difference, unless the contractor is a large postal service that can speak up for itself?

Kroger is straight up replacing instacart within 5 years. Ocado robotic warehouses will pick next day orders, local fulfilment centers will pick same day orders and pick ups, and traditional warehouses will continue to supply the stores. This also means Kroger will stop picking product from their own shelves for curbside and online orders, therefore solving a huge issue with out of stocks for those traditional brick and motor customers. Instacart is screwed

Let's get to this future state!

Not all positions at Kroger are unionized.

Amazon already outsources like this for last mile deliveries.

It seems pretty clear the motivation here is that Instacart doesn't need/can't afford the workforce and is instead probably finding that store employees are able to fill the orders via some partnership with the big chains for a cut that is more margin efficient than hiring their own "shoppers" to do so.

Also just generally this makes sense... a Safeway/Shoprite/Whole Foods employee can probably navigate and fill a cart faster than a random shopper who might not be as familiar with every store's layout. For Instacart this is a huge win, faster fulfillment and probably even higher accuracy of fulfilled orders. For chains this is also a great win since they can utilize their employees more, make a little extra off Instacart, and potentially even optimize their store layouts better to cater to this new style of shopping.

Also the headline is quite misleading given that there are only TEN union workers... so "all of its union roles" is misrepresenting the whole thing a bit.

Just last week I made a large Instacart order to Costco, and the shopper was nice enough to leave the Costco receipt in one of the bags so I could compare.

Instacart Receipt: $340 + $35 tip --- $375

Costco Receipt: $245

I cancelled my Instacart premium membership after that and will not use them again. I just can't justify a $90+ upcharge before tip. IMO Instacart took way too much cut for themselves.

I have been sticking to my local grocery who uses their own in-house shoppers. I miss some of the items I am used to from Costco but at least won't be paying 30%+ premiums.

It is likely the shopper was only paid $20 for their efforts.

When times were hard I did instacart and it was a struggle to pay my modest bills even when working 55 hours a week.

It takes a while to shop at Costco, load everything carefully into your car, drive it to you, and deliver it, not to mention provision for breakage, overhead for the car, etc.

I always get a kick when businesses do exactly what the numbers said they would do and other people act surprised.

To be fair, there were only TEN unionized employees at Instacart who were let go (out of 1900 jobs cut). With such a small percentage of the workforce unionized, it's highly unlikely those employees enjoyed any additional bargaining power or job security that could result from having a significant fraction of the workforce unionized.

With such a small fraction I don't think you can draw conclusions in either direction.

[edit] In other words: these employees would have lost their job regardless of their union status [/edit]

"In other words: these employees would have lost their job regardless of their union status"

10 unionized employees out of thousands isn't enough critical mass to count as a union for the things that matter. The power is in numbers.

I agree (hence my original statement: "With such a small percentage of the workforce unionized, it's highly unlikely those employees enjoyed any additional bargaining power or job security that could result from having a significant fraction of the workforce unionized. With such a small fraction I don't think you can draw conclusions in either direction.")

However I then, uh, went on to draw a conclusion anyway in contradiction of my own statement saying we shouldn't draw conclusions because of the sample size. Methinks it's time for more coffee :).

> 10 unionized employees out of thousands isn't enough critical mass to count as a union for the things that matter. The power is in numbers.

That may be so, but laying off those 10 could be a strategy to kill the union in the crib by keeping the number from ever getting to the thousands. Employees faced with future unionization votes may vote against the union because they're afraid management will find a way to lay them all off if they vote for it, before they're strong enough to resist.

>>In other words: these employees would have lost their job regardless of their union status

IDK that we can make that assumption. Instacart management has made themselves out to be anti-unionization (a common view by management in the US). If you're an anti-union manager, and you're about to make a massive, 2,000 person layoff declaration, you're going to make sure the unionized group of 10 people is on that list. Can't let that sort of thought spread to other locations, and this serves as a good example to those trying to organize in the future. It's easy to avoid a NLRB loss if you bust the union as part of a larger layoff.

The only thing that would have been telling is if they had announced a huge layoff and NOT taken out the union shop.

You're right -- my last statement was a bit too much of a leap. In this case I wonder if it would have even mattered if a significant percentage of the workforce was unionized.

It might have. Unions are political forces. You get a few thousand people calling and screaming at politicians and news outlets to create a negative stink about it, maybe the company looks at other ways to make themselves more financially healthy. I'm not saying it would, just that it could. That's a big part of the appeal of a union, having a group of people with diverse backgrounds and experiences able to bring those backgrounds to the table to help in fights against management.

Instacart Inc. is cutting about 1,900 employees’ jobs ... as the company seeks to boost its ranks of contract workers.

It's important to note that "employees", in the US, are entitled to benefits [0] that "contractors" aren't. As more and more employers try to glorify the gig economy or fire employees in favor of contractors, it is more important than ever to make sure that critical benefits, especially affordable health coverage, are uncoupled from employment status.

0 - https://www.investopedia.com/articles/personal-finance/12091...

It should be that if:

* All your work is for one firm

* You use their tools and/or premises to do the work

* You have no realistic opportunity to work some where else - either a restriction in your contract or due to the hours that you work

Then no matter what it says on your contract you are a employee.

That used to be the law in Aotearoa for everybody. But when Peter Jackson turned rouge they changed the law, personally for him and Warner Brothers, to take those rights from people working on films. And computer games.


Treating people as interchangeable parts, like machines, is simply evil.

You have no realistic opportunity to work some where else - either a restriction in your contract or due to the hours that you work

I think this part would need to be more specific. A while ago I worked as a low level employee at the Gap in Boston, and the rules were that nobody could work more than 29 hours per week so that nobody was categorized as full time, but you also had to be available whenever you were scheduled. However, many people had two jobs, despite this restriction. They would be asking other employees to swap shifts every week and sometimes failing but usually making it work. Nowadays, with Uber, it's a lot easier to fill in an extra 15 hours a week that you'd like to work. So who could really claim to have "no realistic opportunity to work somewhere else" if any odd hours could be filled as an Uber driver or similar gig worker?

It's important to recognize that the different ways of scheduling part time work are really different. 20 hours a week that is mandated with three days notice by your employer really sucks. 20 hours a week that you choose with the Uber app is far better.

Yeah, how do we get more specific here? I had a few ideas, but they all seemed similarly nebulous or else might create suspicious discontinuities. [1]

I wonder if categorizing contractors v. employees is like recognizing porn. "I know it when I see it" says Justice Stewart.

1. https://danluu.com/discontinuities/

I just think it's a bad idea to treat contractors and employees differently. It's crazy to have someone happily doing X hours of work, wishing they could do X+10 hours of work per week, and their boss also wishes they could do X+10 hours of work per week, but then the position would have to be paid more and they don't have the money. It's just cruel to take someone working a minimum wage job, which sucks enough already, and then make them get TWO minimum wage jobs, two bosses, two schedules to work around, all because they can get a contractor job but not a full time job.

So if we say, if you employ someone at a normal 40 hour a week job, you have to provide them with benefit X. Then if you pay a contractor 20 hours a week you should have to provide them with something that's half the cost of benefit X. It just sucks to incentivize companies to hire two thousand 20-hour-a-week positions instead of one thousand 40-hour-a-week positions.

I think this comment helps me understand why Gig economy was ever a thing in US in the first place.

One effect of your 3rd point is that companies decide to reduce the number of hours they offer to employees to keep them just under whatever threshold is created.

This happened in NYC with adjunct professors years ago, according to one of my friends who was working as one. If they wanted to avoid paying benefits they had to reduce the number of hours per semester, and it became uneconomical to keep doing the job for him since the amount of preparation was almost the same but the pay was much reduced.

that's why functions in any public policy should be continuous to remove obvious points of stress and leverage used for gaming the system. federal income tax is this way, even as the derivative function, tax rate, is discontinous (bracketed).

Wouldn’t a simple fix be to say that if you have two part time positions at the same time for the same skill set you must merge them into a single full time one.

Sure, it’s heavy handed, but if they are gonna play games we can’t leave things to trust and common sense.

What do you mean by "merge" them? Have two employees (more accurately, 4 part-time 29.5-hour employees doing the work of 3 full-time 40-hour employees) share benefits: "You get health insurance this month and I get it next month, you can contribute to your 401k this month and I can next month" kind of thing? Or prohibit you from hiring more than 3 'unnecessary' part-time employees?

I'm abundantly familiar with the sort of antics that are involved. For another example, my wife used to work in childcare. To cover 8 classrooms Monday to Friday from 7:30 to 5:30 with at least one lead and one aide, plus two floaters (900 hours per week) they employed approximately 36 part-time workers (several were high school/college study programs working 16 or 24 hours per week) and no full-time workers. You're suggesting that they should be mandated to instead hire 24 full-time workers and pay benefits?

In actuality, every teacher and aide except the owners used to be mandated to work no more than 29.5 hours per week. You often had short stints of working from after nap time at 2pm to 5:30pm just so that you could make hours (which sucked when she was driving 30 minutes at 16mpg to make $10.75/hour with gas at $4/gallon). Some people got scheduled mornings, some got afternoons, but you didn't dare come in for a full day because then they'd have to give benefits. It was amazing how paranoid and irate the front office would get at 5:31pm when couple parents were late for pick-up and they had to keep staff around for more than their scheduled hours. If anyone hit more than 30 hours, they'd shuffle the schedule so they were no longer working afternoon shifts that might go long, and this was all complicated by frequently requested shift trades among the underpaid and underemployed people involved; you weren't allowed to cover for anyone if you'd gone over 30 hours in any of the previous 4 weeks. And it was a nightmare for anyone who tried to have a second job that might need you between 7:30 and 5:30, you wouldn't know for sure until Friday night what you'd be asked to work Monday morning. And they weren't just turning screws in a factory, this also had negative effects on the kids they were teaching when they'd wake up from nap time to find a relative stranger watching them.

Given the demographic, they much preferred shuffling around colorful magnets on a calendar to spreadsheets or databases, and there was a lot of shuffling indeed. But I'd hate to imagine what it would be like to code an automated time clock for that byzantine system...it would be generous to call it a game.

What I have seen is jobs limited to weird amounts like 29 hours a week. You can't really combine two of those into one 58-hour-a-week position.

how exactly would you “merge” them?

Bundle the hours and responsibilities into a single full-time position.

I mean if you have first-year "Introduction to Algorithms" as a PT, and another PT "Introduction to NetWorking" then they can easily be taught by a single person. Create an FT where the job is to teach both.

This was done in the UK and parts of Europe basically to appease the taxman.

See https://www.netlawman.co.uk/ia/ir35

The consequence, as partially intended, is that companies are hesitant to work with individual contractors. The problem is that if you want to start a consultancy, you're going to have a fun time finding your first client.

The correct solution is to decouple employment from taxation/benefits/pension/health-care/everything.

We employ people that work less than 5 hours/week who get to make their own schedule and work from their homes. Even though all of them have other jobs and use it as a small side hustle, we still classify them as employees.

Many people choose to forget that there is such a thing as a part-time employee.

There was a time when janitors were employees. They're not INDEPENDENT contractors, but they're still filling a much shittier niche than in decades prior. Mostly we just need labor protection laws in general and non-employer provided health care I'd say.

I think your third point is key. For the first two points I believe that you can still be a contractor if you are choosing to do all your work for one firm and you're using their tools and premises to do the work.

That is essentially how it works in many European countries, but even stricter. In the Netherlands for example, if 70%+ of your work is for a single employer and the number of hours is above some reasonable threshold, then you're an employee.

You missed the ability to negotiate the price of your work and not face consequences for not taking jobs that pay less.

I'm not sure why the onus is on the business here, rather than the individual: when deciding to be a "contractor" vs. "employee," I should & do take those risks and decisions into account, and weigh the trade-offs.

You want 401k match and other nice benefits? Then become a full-time employee somewhere. You like more flexibility and independence, given the trade-offs? Then go with independent contracting.

Because, given the opportunity and no regulation, companies will always push to make all employees contractors. Independent contractors represent a significantly lower liability on the balance sheets. Except that those lower liabilities are just externalizing the cost of employment to other systems (health and unemployment insurance, etc). If we don't regulate corporations, they will just race to the bottom in how they treat labor.

> Because, given the opportunity and no regulation, companies will always push to make all employees contractors

This is not the case. Companies need permanent staff for: - deciding strategy, at various levels - deciding who's worth bringing on board - managing internal and external staff - cost (permanent contractors cost a lot) - being part of corporate memory, which can be handed over in a notice period of a month or two or three, but not in the week it takes for a contractor to offboard

Perhaps. But also, given the regulation, you remove opportunity for those that are looking for the type of employment you discredit from accepting it from employers that want to offer it. I very much appreciate the ability to step into the gig economy when I need to. I assume you mean well, but I wish you and other's who agree with you would kindly butt out and let me make my own decisions.

I'll grant that I agree this is probably true for low-skilled labor where supply is high and interchangeable.

I don't think this is the case for low-supply, high-skill labor (ex: doctors, engineers, etc.) as well as certain low-supply trades (HVAC, welders, etc.) Then bargaining power can properly counteract any such forces.

The AMA is a union in all but name [1] and quite powerful [2]:

By money spent, the AMA is the nation’s third largest lobbying organization of the last 20 years, behind only the US Chamber of Commerce and the National Association of Realtors. [1]

[1] https://www.forbes.com/sites/johngoodman/2014/09/03/the-doct...

[2] https://www.theguardian.com/commentisfree/2019/jun/06/why-we...

American software engineers should form a special interest group. Not sure why so many people are resistant to the idea. Lobbies too. Its strange that an otherwise left leaning demographic acts virtually conservative when it really counts towards their labor

Edit for word choice

What would a union do for me that could possibly be worth 1% of my pay?

There is already excess demand for skilled software engineers and if you don’t like how your company is treating you, there are many others from which to choose.

Security. Unions (and lobbies) aren't just about tangible and immediate benefits, they're a form of insurance against changing job markets and work forces. Again, not sure why you're so against it.

Job security comes in many forms. Working in a field where engineers can create huge returns for their company and where resulting demand far outstrips supply is a far better form of security than any union could ever provide. Unions can’t realistically protect against changing work forces. Software engineering is globalizing. Unstoppably.

I’m not opposed to people organizing for whatever purpose they think is best. I am opposed to people being forced to pay a tithe to unions in order to work in their field.

I don’t see unions as making my life in software engineering better at all and, given that, I’m naturally opposed to paying 1% of my earnings to a group that I don’t think will help. If others see it differently, they’re welcome to form one; I’m not “so opposed” that I’ll picket outside their workplace to interfere with them.

Most engineers seeking security for their future would be much better off increasing their 401(k) deferral (or other savings) rate by 1% rather than sending that money to a union.

Do you have a good example of where a union was able to protect against major changes in the job market?

Steel is out. So are auto workers.

Why are auto workers considered out? The UAW still has hundreds of thousands of members. I would consider it relatively successful, for its members anyway.

They have lots of members but it’s way down from say 30 years ago. And benefits have been pulled way back. The union agreed that existing GM employees can keep their packages ($50+ per hour) while new union members start at $18. Basically 2 tiers of union members.

> American software engineers should form a special interest group.

It could be that one of the most prominent of the FAANGs is actually supporting things like this [0] under the threat of their lower paid warehouse workers unionizing. But also consider that Google is also going after its tech people who were involved in Unionizing and recently investigated an AI ethicsist [1].

I think its clear, most SWE have it (too?) good with amazing salaries and benefits to placate them into indifference or apathy on the matter and go to great lengths to keep them in an infantile servile cocoon/echo-chamber while at work, all while they create these abominations on privacy, free speech and the Human psyche while much of the rest of the World's working class/Industries suffer with under or unemployment altogether, so why risk it?

Especially since so much of the labour is through H1 visas who can control and dictate the terms of their employment with the simple decision to terminate them and leave them out in the cold rather easily.

It's concerning that even Tesla has been so anti-Union if I'm honest, and speaking as someone who has been in the Auto Industry, mainly German, most of it is highly unionized outside of the US.

It was the Big 3's fault for being complacent and relaxed about innovation that made it non-competitive and was highlighted in 2008 financial crises how bad it had gotten.

I'm not in favour of Unions unless as an absolute last resort, as in the case with FAANGs devouring of the Market share and its consolidation of the competition. I personally think having Unions only made the situation in 2008 worse for the Big 3 due to wide spread corruption and incompetence from the executive board, design, and engineering departments: but the core of the problem with US car manufacturers is with having a mediocre product in comparison to the rest of the World, rather than it solely being a union based Industry and thus a sure failure.

That much is clear and had been the case outside of pick up trucks since the 70s as Japan, Germany and now Korea have eaten the US' lunch (marketshare) in total national and international deliveries/sales YoY and DoD.

In the end it didn't stop Ford from still offering union based jobs, declining a bailout and they simply deciding to stop making cars now and focused on their stronger selling trucks, SUV products and some EV stuff, some of which is still in the works. They also had a massive marketing push for their Mustang and GT line up in Motorsports that made it rather successful. Though I think GM had more success with its relaunch of the Charger.

I wouldn't buy any of it myself, but I commend their efforts and still it shows that the 'Unions are the source of all evil' that many Tech based conglomerates push is not true, especially for Mega Corps like Amazon and Google who have severe and outright horrible labour problems.

0: https://www.vice.com/en/article/5dpkad/amazon-launches-anti-...

1: https://www.cnbc.com/2021/01/21/margaret-mitchell-google-inv...

What does lobbying have to do with whether or not an organization is a union? The Chamber of Commerce obviously isn't a union.

The AMA obviously represents a certain class of workers, so the question is whether it is a political organization to increase their stature. The lobbying stats answer in the strong affirmative.

This is absolutely true for engineers. While I did have employer provided healthcare, I was hired as a contract worker at Google X on their flagship robotics research project as a mechatronics prototype engineer and later a test engineer. I worked for two years alongside full time employees on the same exact things as full time employees. But they got stock, parties, and other special treats that contractors did not. Almost 50% of the team - I think the legal limit - were contractor roles.

While I do appreciate that from their perspective it makes sense, it is also true that if we don't fight to protect workers, all jobs will go this way. That's actually why what an up-thread comment said is a great idea. If we decouple important things like healthcare from employment, then everyone gets important quality of life care without employers having to restrict benefits. If we do not fight for ourselves, we will end up in a situation where most people cannot access the basic necessities of life. Already in the US millions of Americans are without healthcare.

Acting is certainly a high-skill profession, but even the in-demand ones are members of the Screen Actors Guild. They know why it's a good idea.

What do you think about sports leagues and the fact that the major ones in US have unions for their players? (low supply, high demand)

"low-supply, high-skill labor (ex: doctors, engineers, etc.)"

Doctors, I know, have powerful unions and associations. Very, very, powerful.

Speaking as a person who intentionally chooses to be a contractor, and refuses offers of permanent employment because I prefer to be a contractor, I respectfully disagree. I have these options because being a computer programmer (lately) gives me options. In any occupation where it is a "buyer's market", the employee has no such option.

Now, whether things like healthcare and retirement should be linked to employment in the first place, is a real and valid question. But currently it is, and the distinction between "employee" and "contractor" seems bogus in a lot of cases.

When you say it gives you more flexibility do you mind if I ask what do you mean?

I'm in the US and generally my employment has been at will, either of us are free to end the arrangement at any time. Having a specific date where that arrangement ends doesn't seem to be more flexible, if I wanted to leave in a month I would just give my notice and leave.

I'm in the same position as you career wise and I often get offers to join contract roles and they are very unappealing to me. When I do the math on the benefits I'd lose out on and the additional taxes, rarely are these offers competitive let alone when I factor in the greater volatility inherent in the arrangement and the lack of unemployment benefits. Also in my experience the recruiters pushing the contract roles are the most desperate and aggressive, that doesn't lead me to believe these roles are all that high quality.

I just transitioned to contract based. The pay is significantly higher than if I was a salaried employee. In addition all of my salary comes to me, pre tax. This allows me greater flexibility regarding what I do with my $. For example I will use all income in the first half of the year to pay off all of my debt (2 cars, credit cards and money down for a house refinance). The second half of the year I will save for taxes and at that stage my overall monthly bills are massively lower. I get my health insurance via my wife who is salaried. In addition it allows me to write off a lot of things for taxes. Getting paid through my company gives a lot of tax benefits.

The contract is for a year, with the option to extend. The job I just left was salaried but actively laying people off. So while both positions have risk, the contracted one provides a much higher income and flexibility to use it as I see fit. Plus any work I do on the weekend for the contract position is paid, as a salaried employee its not.

Key point: "I get my health insurance via my wife who is salaried."

What if you had to provide your own health insurance?

  For example I will use all income in the first half of the year to pay off all of my debt
In the USA, this is a form of tax evasion, as you are required to pay estimated tax 4 set times a year, based on income during those periods. So, it might be prudent to avoid boasting about same in a public forum.

While you certainly should make payments 4x yearly, and I do, the reality is they just penalize you (10%, IIRC). I've never heard of it being prosecuted as "tax evasion".

But, unless your interest is >10%, probably actually costing you money compared to making 4x payments per year. IANAL (or accountant).

I'm not OP, and I live in a different country, but my answer is unlimited vacation between contracts. Software development contracts cover my yearly expenses in 3 months. I have the rest of the year to myself if I want to.

This is more or less the chief reason for me to work this way. When my daughter was younger I would take summers off, to spend more time with her. Now that she's older, and not so interested in spending all day with her dad (sniff, but I think I was the same way at her age), I continue to do it because it gives me several months per year off, and also results in greater variability in what I'm working on.

If I just quit my job once or twice a year, after being hired as a "permanent" employee, after a while my resume would start to look like a warning sign. Why can't this guy keep a job? But as a contractor, it's normal and expected.

Maybe one month you want to work 40 hours a week, the next you want to work 20 hours a week, the next you want to work 40 again. That's quite hard to arrange with a traditional job, but often possible with contract work. Especially when you work somewhere that has a few contractors doing similar stuff and you can just arrange amounts of work between you and your peers.

Would you mind sharing why you prefer to be a contractor?

See answer to nicbou's comment.

The whole point of the sharecropper economy is to make it so a lot of people don't really have much choice.

The point is that companies are eliminating full-time employment roles for employees and replacing them with roles for contractors. That means there are less full-time employment opportunities for W-2 employees, and an increasing amount of roles for 1099 contractors.

If only it was a matter of choice rather than a very planned uberization of the workforce.

If only you could come reasonably close to proving that.

Let's say you were correct. Want to stop it? Regulation is just a wall with holes. The only way to stop it is to reduce the labor force.

If this is actually a plan, it's conception requires that the labor force is going to expand rapidly. In a tighter labor market, companies are much better off locking up labor rather than nickel and diming costs. So any said evil plan is an add-on to opening the gates to immigration, both legal and illegal.

Because they don’t give you that flexibility. They require a high number of working hours to stay in the system, and require you to work peak hours anyways.

No one really gains as a contractor working 39 hours a week without benefits.

If we go down that route then pretty soon 80% of people will be unable to find employment, at all. Which is fine as long as the rest of society is set up to handle that in terms of things like healthcare.

The unskilled labor market has monopsony power. This is effectively telling people to pull themselves up by the bootstraps.

... and if any of these contractors are in CA, then they (edit to add this: Instacart) will likely be sued by the EDD. The EDD would view this as a blatant way to get out of paying benefits (which it does appear to be).

It isn't at all though if you read the article. They are instead partnering with stores to have the store employees fill orders from Instacart instead of Instacart's employee "shoppers."

The model of Instacart has evolved, it went from any shopper going into any store and getting you what you need to having the stores actually be in on it and using Instacart as an extension to increase demand and orders (think how DD partners with restaurants for delivery vs. the old Postmates model where they could just send someone in to order your food for you)

No one listened when I said Prop 22 is going to backfire hard. Bet the 1900 jobs are in California alone.

Why is the onus on corporations to provide benefits to the people? Shouldn't this come from the government?

i am really curious about the labor market in the few months. especially here in eu, the companies were holding their employees due to state subventions. that can end up badly when it is over.

There are advantages in countries with socialized healthcare to be an independent contractor (e.g. Canada). In the US, not so much.

I suspect overall you are correct. But it's really a function of what you pay in price, or tax. One of the reasons why contractors make more/hr is that healthcare and other benefits are factored in, at least in theory. Couples that both get benefits suffer the lower earnings while only one health benefit gets used (ignoring the small affect of coordination of benefits).

It really depends.

I know a woman who worked at my Fortune 500 as a contractor for like 3 years. She was able to bill hourly, work when she wanted (mostly).

I had heard she made $600k for a similar role where if she were an employee she would have gotten $200k + benefits.

The cost of a health plan was negligible.

I don't think this is typical. I'm referring more to freelance graphic designers, copywriters, etc. People who are starting businesses by leveraging their skills. Some don't want to be tied to a single client but have to start somewhere.

Dumb question: is this in any way related to California Proposition 22?

Yes! For instance, the Albertsons/Vons/Pavilions grocery chain recently fired all its in-house delivery drivers and contracted with Doordash instead, in order to take advantage of Doordash's access to (cheaper) Prop 22 drivers.


And yes, this shift was widely predicted by Prop 22's opponents. The only surprise is how fast it's happening.

The article loosely hints at this context, but provides no evidence either way.

Looking at Instacart revenue / margin numbers, they hit profitability _for the first time ever_ in April 2020 alongside the COVID pandemic. Further, margins are CRAZY THIN - meaning maintaining profitability is really difficult in an environment of increasing competition from Uber / Google, among others. (Ex: Uber bought Postmates, as the latter had similar margin difficulties.)

My read is that this type of move was planned as an option for Instacart for a while, and Prop 22 maybe pushed up the timeline slightly.

EDIT: not sure why I'm getting downvoted. I know the article tries to build this narrative as much as possible (without even mentioning Prop 22) but then doesn't even provide the financial details that show that Instacart has really tight margins - and if they're trying to IPO, at this rate they're going to stumble there.

The article doesnt mention Prop 22 by name but the last paragraph is very clearly about Prop 22

> San Francisco-based Instacart and other gig companies including Uber Technologies Inc. and Lyft Inc. last year bankrolled a successful $200 million campaign to pass a California ballot measure exempting them from a state law declaring workers were employees if they did work in the “usual course” of their bosses’ business. Emboldened by that victory, the companies are pushing for similar changes elsewhere that would make it easier to claim workers are contractors.

Completely agree, but I would argue that the article is a bit deceptive in that it's trying to build that context without any evidence or data that this is the driver for Instacart's move.

correlation <> causation, etc. etc.

It is entirely due to Prop 22.

I don’t know much about Instacart as I live in Scotland but what they have done (Andrew Kane in particular) for the Ruby on Rails community through their open source is incredible. Kudos.

Agree, Searchkick is brilliant

I wasn't aware they had done anything. Do you have an article on the matter?

Check out their GitHub


I wish Costco would launch it's own service rather than use Instacart. Instacart has been a hit or miss but my Amazon Fresh/Whole foods delivery have been significantly more consistent. Like other said, it kinda sucks to pay more for the groceries, the fees, the tips, and in the end you get mediocre service.

Costco does delivery through their website. But it’s not same day.

Imagine if these unions start a competitor, it would be glorious and we can call it a co-operative.

The main barrier I imagine is access to capital.

that, and the instacart business model is only feasible with large VC infusions (so yeah access to capital) and via externalizing other costs of doing business (living wage, insurance, benefits) to the social safety net instead of providing such services to their labor.

It really sucks how VC money can cause so much financial insecurity for the little guy.

Good luck raising money to start a co-op.

This is a very dishonest headline 10/1900 were union.

I genuinely feel for the people laid off.

With that said, wont Instacart, and other similar business models that rely on grocery stores and human labour to fulfill the orders, simply start becoming obsolete in the coming few years as robotic fulfillment centers[0] start popping up all over the place?

Perhaps these centers will not service the most rural of places, but then again I imagine these services (i.e Instacart) are mostly used in more densely populated areas anyway.


I always hear progressive views about unionization which I agree with and they make sense. What are some of the disadvantages of unions?

Edit: Before you hit that downvote button, can we not have a balanced discussion about pros and cons of Unionization? I am a progressive and a Democrat but I want to know both sides of the coin. For people saying this question is of bad faith, I am not really asking "What are the advantages of murder?" here, Unionization is a complex topic and it would be interesting to understand that it's not just companies exploiting employees, but there is a lot more to it than that.

Unions tend to incentivize low performers and prevent companies from adapting to changing conditions.

Since it's next to impossible to get fired from a union shop, lower performers and less ambitious tend to stick around because it's easy work and they can't really get fired. And because pay in union shops is often tied more to tenure than performance, your higher-performing workers tend to get resentful and leave, as they are not rewarded for their contributions.

In terms of inflexibility, markets and conditions can change very quickly, which means people's roles and responsibilities need to change.

Unions tend to (but as a rule to "have to") push back against this, even when the employer is offering re-training programs. Typically unions define what a "job" is and then fight to keep said jobs, which can prevent companies from making the changes they need to. Ironically, this often leads to more, not fewer job losses, since the company can't adapt. This is why many cities in the Northeast still have "typists" officially on their payroll. The union will fight to keep a person's job, _as it was defined the day they were hired_. You can get away with this sort of thing in government, up to a point. In the private sector it can gradually grind companies down, as it prevents them from making the necessary transformations the need to in order to succeed longer term.

This is a huge issue Volkswagen and other car companies are having. As they shift to electric cars the Unions are pushing back hard as it takes a fraction of the employees to manufacture electric cars.

This is the idea of have of unions. NYC MTA is all union workers and when I hear stories (from a relative that works) of the kinds of things people get away with before being fired along with their ridiculous compensation, I can't easily shake my opinion of unions.

Unions can be tremendously helpful when there is a wide disparity in bargaining power between employer and employee. In the late 19th and early 20th century, labor unions made tremendous strides in improving worker conditions and pay/benefits.

Among the criticisms I've heard ...

Sometimes market forces can get you adequate conditions and pay/benefits without the need for collective bargaining. For instance, software engineers tend to be well paid even without needing to unionize. So if you don't feel that you need a union, but you're forced to be in a union (and pay dues) against your will -- as happens in many industries -- you may feel those dues are taking money out of your pocket unnecessarily. In fact, the union leadership might actually be making decisions that benefit them or the members collectively but that don't benefit you individually.

> For instance, software engineers tend to be well paid even without needing to unionize.

Compensation for the majority of software engineers has not kept up with cost of living increases, inflation nor the amount of revenue they generate for their employers.

Adobe, Apple, Google, Intel, Intuit, Pixar, Lucasfilm and eBay all colluded with one another[1] to keep tech worker compensation below their market rates.

> So if you don't feel that you need a union, but you're forced to be in a union (and pay dues) against your will -- as happens in many industries

No one is forced to work a union job. If your employer makes a decision that you don't like, you aren't forced to work for them, either. If a union makes a decision you don't like, you aren't forced to work for it.

[1] https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...

Under Agency Shop, hourly workers have to pay full union dues whether they join the union or not (workers who preceded Agency Shop can opt out).

No one is forcing you to work for an agency shop against your will like the GP is claiming, though. If you don't want to pay dues, then you're free to quit and find another employer. Similar to if your employer decided employees needs to pay for uniforms or whatever, you're free to quit and find a job that doesn't require that.

> No one is forced to work a union job.

This is technically true, but this is also an argument against unions. It's true that if you don't like that your company is unionized you can go work for a company that's not unionized, but it's also true that if you don't like that your company is not unionized you can go work for a company that is.

Union proponents are not arguing that they're forced to work for non-union employers, though.

The union workers I know generally are annoyed to hate the union, both for the dues unceremoniously rippéd and for "protecting lazy co-workers". It's usually held to grumbling but they always have an eye out to grab a higher-paying non-union job if one shows up.

Statistically, white collar union workers have higher compensation[1], better benefits and more time off. They also report higher rates of life satisfaction[2].

[1] https://www.bls.gov/opub/mlr/2013/04/art2full.pdf

[2] https://journals.sagepub.com/doi/10.1177/0160449X16643321

>both for the dues unceremoniously rippéd

I mean, yeah, you owe dues. How else should it work? When I was part of a union it amounted to 2 hours of wages per month, not exactly onerous.

Counterexample: the nascent Google employees union is taking 1% of total comp.

That’s pretty ambitious when the employees are Googlers.

>> itsoktocry 2 hours ago [–]

>> When I was part of a union it amounted to 2 hours of wages per month, not exactly onerous. reply

>> elefanten 2 hours ago [–]

>> Counterexample: the nascent Google employees union is taking 1% of total comp.

Not sure it's really a counterexample as there are - in theory - about 200 work hours per month, so 1% of comp is pretty much equivalent to 2 hours of wages per month.

> I mean, yeah, you owe dues. How else should it work?

It's a bigger problem in non Right to Work states, where you can be forced to join the union (and have dues taken from you).

In places where joining the union for their benefits is voluntary I don't see the problem.

There are also places where you don't have to join the union, but they still take some of the wages (at a lower rate than full members) for nebulous "benefits" the union offers. Those are especially contentious because not all the employee believe they get any benefits at all.

The US should shift to the European model where multiple unions are available at each employer, and they compete with each other for membership. I believe joining a union is required there, they don't have any non-union jobs, but a European union is not the same as a US one.

Taft-Hartley banned the "closed shop," where you must join a union to work at a business, in 1947. You will never be forced to join a union anywhere in the US to work at any given employer.

That's not true. You misunderstand the rules.

Google: "closed shop vs union shop" and you will see.

Basically you cannot have a business that only hires from a union, but you can have a business that requires you to join a union after being hired meaning the union cannot prevent you from joining them.

Or in other words in non-right-to-work states you can be forced to join a union.

Under the NLRA, you are never required to join a union. You may be required to pay union dues, and the union will still represent you in collective bargaining, but that doesn't make you a union member.

Could unions be ad-supported? Maybe you put a TV monitor playing a continuous stream of ads in the employee break room. It's win-win.

The lazy worker argument applies to any job. I work in a F500 and have 'lazy' coworkers. I can't just go to my manager and get them fired.

The difference is that with a union not even the manager can fire them if he notices that they are lazy

The union workers I know generally are pleased by their union, especially if they worked in their location prior to organization. They are able to remember and appreciate the difference between how management treated them before and after. Even my friends who worked as management in union-shops appreciated what the org was able to do for the people they supervised (even if it was frustrating during 2018 strikes to have to manage entire hotel restaurants short staffed).

Out of curiosity, what field are your union friends in, and do you happen to know what union represents them?

Mainly government jobs - I don't know the union.

> but you're forced to be in a union (and pay dues) against your will...

If it's a "closed" union shop, then I'd consider the union-dues as simply part of the job-offer and treat it the same as employee-side health plan copayments: a minor unpleasantry but nothing worth raising a fuss about - assuming the union dues were in the typical range of $300-800/yr - obviously the more they cost the more I'd be inclined to ensure they're being spent responsibly and that I felt like I was being represented well.

Though I want to say the sentiment (or mental-connotation) you're expressing with language like "against one's will" w.r.t. union membership hints of a reductionist Ayn Randian influence on your opinion. That statement is not an incorrect assessment, but it's overstating the problem - it reminds me of sayings like "taxation is theft".

Sincere question: what do high-quality surveys of union membership (across all industry sectors in the US) suggest about opinions held by closed-shop employees of their unions - and their employers? I feel there's too much reliance online on anecdotes about the excesses of certain named unions when it comes to forming opinions about them, so I'd prefer to see some "big data" about union membership.

Living in Detroit and knowing a lot of people who work in the auto industry I can tell you that for every ounce of goodness that comes from a union there is an equal and opposite ounce of badness. The shit that I hear people get away with is remarkable. And yet they continue to come to work day after day with seeming impunity, continuing to assemble vehicles, etc...

I am personally anti-union because inevitably they become so large that they succumb to their own internal forces and become beurocratic and misguided.

Also from Detroit metro, and was coming here to say the same thing. I moved here from out of state and the more I talk to folks who work in the auto industry, the more I'm convinced that unions are a large obstacle to the revitalization of Detroit's auto industry.

While they bring stability and job security to workers who are invested in excellence and quality, they also bring stability and job security to workers who have no desire to be productive. This is demotivational for anyone who needs to work with these employees and has an outsized effect on the organization. To quote a friend, "I love my work, but I can't get anything real done because I need sign-off from X, but he sits around all day, doesn't really work, and no one can fire him."

The whole "he just sits around - no one can fire him" is painfully true.

You can find this in non-union companies too. I worked at SAP (SuccessFactors) for seven years and had to interface with many people that were incompetent and lazy, yet protected from termination because of company politics.

Unions bring democracy to the workplace.

Democracy ensures some modicum of fairness, but is slow, inefficient, and can lead to very bad outcomes when dealing with highly technical questions. There's probably a place for big, large-scale political questions (who should be president, should we stay in the EU) to be decided by direct democracy, but I wouldn't want that for trade or monetary policy.

The big problem I see with democracy, in general, is that it's highly susceptible to special-interest takeover. When a small group stands to gain disproportionately from a particular outcome, they will lobbby--HARD--to get that outcome. Even when doing so might be so harmful to the overall system, that it collapses, even if they get what they want.

The US analog is the SEIU/AFSCME organizing so hard that the entire government of a state, like Illinois, becomes beholden to what they want.

How did AB5, the TNC bill, pass, when it was overwhelmingly not supported by drivers and the electorate didn't want it, either? Teamsters pushed their agenda. Hard.

Unions will make no bones about running an employer, government, or other organization absolutely into the ground in the name of advocating for their members' interests. They do not care about taxpayers, customers, or any other constituency other than themselves and their members. And when it all falls apart, they'll just go to the next state/company/etc. and run the same playbook, over and over. It's very harmful. Some things need to be outside the reach of democracy/the masses.

Everything you said negative about them applies to corporations as well. Not sure why you single unions out on this.

Because the thread was about unions. Though you're right.

I think people who are really big "repeal citizens united" types need to realize that it cuts both ways.

>What are some of the disadvantages of unions?

As someone who spent a lot of time as a member of a once powerful Canadian Union, the downside is that you get what you get, losing individual bargaining ability. You have a vote, but majority rules, and overnight you could be working under terms and conditions you don't necessarily agree with. Promotions and internal transfers are handled by seniority. The collective trumps the individual. Nothing inherently wrong with that, but you can't please everyone.

It isn't uncommon to find yourself on the losing end of the union contract negotiation with little you can do about it. You give up your agency. The only things that matter are the interests of the existing majority which will often be prioritized at the expense of the minority (e.g. LIFO layoff practices).

I made one tenth the salary as professor while teaching as an adjunct in grad school despite having a similar course load. My uncle's union negotiated lay-offs of his division over another one. A lot of us have stories like this that left a bad taste in our mouths about unionization. Corporations can also be guilty of favoritism but they aren't supposed to be on your side of the negotiating table.


LIFO. Thanks, corrected it.

Somebody's law (don't remember whose): Organizations tend to preserve the existence of the problem to which they are the solution. That is, unions often try to protect the union's interest, not the members interest.

A lot of the answers describe problems that can exist in any human organization rather than being specific to unions. For example:

- Prioritizing the organization survival or growth over the needs of those who should benefit from it. Ironically, this is the default of for-profit companies.

- People at the top being corrupted, prioritizing personal gain over moral values

- Becoming slow and bureaucratic after becoming big and/or old

> What are some of the disadvantages of unions?

Corruption. Over and over again, decade after decade.

So... the same as most corps?

No. There are many fewer unions than corporations. And many many incidences of corruption at unions than corporations. Do the math.

As someone who is a Catholic first and politically more conservative second, the question of Unions is pretty interesting.

Catholic teaching says that in principle, unions can do a lot of good, see for example:

> The most important of all [voluntary associations] are workingmen's unions, for these virtually include all the rest. History attests what excellent results were brought about by the artificers' guilds of olden times. They were the means of affording not only many advantages to the workmen, but in no small degree of promoting the advancement of art, as numerous monuments remain to bear witness... (http://www.vatican.va/content/leo-xiii/en/encyclicals/docume...,

> Among the basic rights of the human person is to be numbered the right of freely founding unions for working people. These should be able truly to represent them and to contribute to the organizing of economic life in the right way. Included is the right of freely taking part in the activity of these unions without risk of reprisal. Through this orderly participation joined to progressive economic and social formation, all will grow day by day in the awareness of their own function and responsibility, and thus they will be brought to feel that they are comrades in the whole task of economic development and in the attainment of the universal common good according to their capacities and aptitudes. (http://www.vatican.va/archive/hist_councils/ii_vatican_counc...)

When I read those descriptions, and compare that to either the limited experience I had working for a company that was largely unionized or the stories that I've heard or read about, I'm not sure how often these apply outside of a few genuinely dangerous occupations.

See as one example how some unions have argued that union jobs should be exempted from minimum wage laws (https://www.theguardian.com/us-news/2016/apr/12/los-angeles-..., https://www.uschamber.com/sites/default/files/documents/file..., https://padailypost.com/2018/04/02/minimum-wage-law-includes...). Evidently, unions see an opportunity to grow their market share by lowering their prices (i.e., wages of labor), and do so by lobbying Congress from exemptions from law, which is the very thing that they claim corporations are evil for doing and that we need unions to exist in order to stop. The argument is that unions are able to negotiate better benefits, but they don't argue for an exemption from minimum wage if the employer provides a certain level of benefits, they argue for an exemption specifically for using unionized labor.

Are there good unions and good union leaders out there? Sure, but I think this example shows that unions in themselves do not advance the "whole task of economic development and in the attainment of the universal common good," but are instead subject to incentives and respond to them the way any other organization does, and very often the incentives of the union leadership is different than those doing the actual work.

  some unions have argued that union jobs should be exempted from minimum wage laws
Union shops are exempt from numerous worker-protection laws. For example, California rest and meal break constraints don't apply to organized laborers; the contract can specify whatever rules the labor reps and management agree on.

You are probably being downvoted because this is not really an appropriate venue for such a discussion. If you are genuinely curious, surely you have access to a search engine where you will get much more thorough discussion of both sides.

Why isn't this an appropriate venue?

I would love to live in a world where we do away with the term "employee".

Where people were just part of a team.

Where your boss didn't have to be concerned with which doctor you went to.

Where you could work for $5 an hour for a cause you believed in, and not have to worry about making ends meet.

Some day we need to #RefactorAmerica.

Sounds like the free association of producers: https://en.wikipedia.org/wiki/Free_association_(Marxism_and_....

Both with Dropbox and Instacart, their business model didn't make sense to me. But they still became billion dollar companies that will go bankrupt in a few years after making many people really wealthy. I guess it's a different way to play the game

Wonder why they don't partner with Uber/Lyft so the logistics are always there, on demand... since the radius of delivery is always near, I can't see it being that pricier then having to have a shopper and driver.

But also, hmm, delivery is so hard here.

Read about them earlier today, they are getting ready for IPO. Can't help to think news like this has to do with building a better offer. The market likes these kind of news.

The market likes these kind of news.

When someone points to a rising stock market as possible evidence of a strong economy, just keep in mind that the market likes it when a company fires a ton of employees.

Jobs for the sake of bragging about how many people are employed is just as useless.

Do what helps you make revenue, don't do what doesn't.

I am a fan of one-off utility of people, I think of everything like a commissioned trip to a new continent. Take risk, get the gold, return, distribute payments, disband. Reach out again if there is a similar project.

Keeping people around for no reason is folly and merely trendy.

> Jobs for the sake of bragging about how many people are employed is just as useless.

Not at all. Giving unemployed people useless jobs and paying them for it is great for the economy, and has been successfully used as a form of economic stimulus several times in the past. You are giving money to people who need it the most and will spend it in the local community and keeping them busy/out of trouble at the same time. Plus they have some skills for their resume when the job market improves.

That’s not a private sector problem

Private sector is part of an economic whole. Something something about Henry Ford giving his workers a wage high enough to buy a car.

> I think of everything like a commissioned trip to a new continent

It's a great model for the exploration business (or fields similar to it, such as construction projects, entertainment production and so on). It's not applicable to every single industry though.

I think of all software projects like this.

I view the Instagram purchase as the most correct example. 30 employees and bought out for 1 billion.

I know so many investors and founders that are shy of certain dollar figures solely because there aren’t like 1000 people involved or some other arbitrary number of employees or personnel. Compared to the most accurate question “can I make a return on this amount of money, and what are those probabilities”.

Obviously there also are founders and investors that do ask the most accurate question, and they grow in number.

It does aggravate me to see this other slower moving culture with irrelevant perceptions of reality based on how many employees a company has. It seems rooted in a prosperity philosophy, where wealth accumulation is granted by compliance with morality, and high employment numbers satisfy that morality. And its like, wow how many times does that have to be disproven to those people, aren't they adults?

> Jobs for the sake of bragging about how many people are employed is just as useless.

They aren't useless in a society where the only means of survival is having a job.

In fact, in a society where the only means of survival is having a job, part of the social contract is 'everyone should be able to get a job'. Otherwise, you may get to meet a lot of angry, desperate people, with nothing to lose.

Yeah we should fix that and is a separate issue.

Vilifying a corporation that suddenly remembered they have a lot of random people don’t help generate revenue is odd. Similarly, assuming distress of a corporation when they remember to cut its workforce is just as odd. Its probably an accurate assumption, it just doesn't have to be and it would make more sense for corporations to be more nimble.

Maybe that corporation shouldn't have hired all of these people in the first place, and those people could have found jobs at places with more stable workforce plans.

Jobs aren't useless, but a job can produce net negative value. Consider other politically mandated jobs like gas station attendants in Oregon. These sorts of jobs (and the government guaranteeing a job for everyone) are downright dystopian - and further still, I can't imagine the path to a healthy society.

A lot of jobs produce net negative value, but the guy who pumps my gas, or the Wal-Mart greeter isn't at the front of that list. The guy who cold-calls me with telemarketing crap would be, though.

Everyone having an opportunity for employment is not dystopia. A real dystopia is when you have no good social safety net, but also have a large, unemployed underclass, which has no ability to make a living for themselves.

Look, we're profitable after firing half our workforce!!!

The future of grocery pickup delivery is clearly automated - automated warehouse , and as we start seeing , automated delivery robots.

What value does Instacart offer in the world ? Why would people want to buy their stock ?

Uber is essentially a bet on automated vehicles. They cannot be profitable with human drivers, at least not as profitable as their market cap would require.

At the end of the day, the people will get hired back by somebody who needs their groceries delivered. Meanwhile, this makes Insta more of a software company, and lets the stores deal with hiring.

The market is going to love this because it will de-risk Instacart. Grocery stores should love this because they will be able to increase utilization of their employees. And of course employees, despite the popular narrative, will actually gain more power because they would have more localized work, and less competition. It's a win-win-win.

I am not surprised considering major grocery stores in Greater Seattle Area all have their own curbside pickup/delivery services.

tldr; Instacart is shifting work to the grocery store's employees to pick and pack grocery orders instead of having Instacart employees do it.

FWIW, the union referenced is at a Marianos, and Marianos (and all Kroger owned groceries) are unionized already. So the work is shifting from one union to another union.

Instacart is dropping these positions because they are trying to trim down and look like a good buy.

Instacart is Homegrocer 2.0; and by that I mean an abysmally managed top-only company that only takes and does no re-investment. From what I can see their business model is, minimal investment, maximum unsustainable sort-term profit, and sell or go bankrupt while floating upon pool-in-yacht.

Their "customer care" staff are assigned multiple shoppers and customers to deal with simultaneously, and they are out of country NOT trained in English or US culture, as such they are clearly unable to communicate effectively; queue lines in the thousands.

I spoke with one once who told me they were NOT ALLOWED to communicate the fact they were dealing with multiple customers, with people just constantly spamming them because they could not keep up; a system which will obviously bottle neck at any load increase. Oh, and, according to her the entire system is "managed" by "If" statement masquerading as an "AI HR" software.

Once the vaccine comes out in full, Instacart will most likely be no-more or sold off.


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