Food delivery giant Foodora is leaving Australia owing $28.3 million in debts to workers and small business, plus more in unpaid taxes.
This huge debt is small change for Foodora’s parent company, Delivery Hero, which is worth $14.7 billion. Based in Germany, Delivery Hero trades in 40 countries and is attempting to further expand its global reach.
The cruellest part is that Foodora’s delivery riders are the last in line to be paid any outstanding wages or debts. This is because Foodora hires its riders as independent contractors, not employees, and are therefore deemed to be unsecured creditors.
As independent contractors, workers are forced to sign contracts stating they are operating their own business and are “their own boss”.
Riders are not eligible for compensation from the Fair Entitlements Guarantee (FEG). The federal government set up the FEG after former Prime Minister John Howard’s brother’s mining company folded, with workers left stranded and owed thousands of dollars in unpaid wages.
Foodora riders are also caught in another catch: most of them are international students and therefore not eligible for welfare benefits.
It’s no wonder that Delivery Hero is worth so much money when it treats its riders so badly.
Two lawsuits have been brought against Foodora regarding their exploitation of workers.
ABC News reported in July on former rider Josh Klooger’s case against the company after he was unfairly dismissed for publicly exposing the mistreatment of Foodora workers.
When Klooger started with Foodora in 2016 he was offered $14 an hour plus $5 a delivery.
His pay was subsequently reduced to $13 an hour and $3 a delivery, then to $10 an order and $0 an hour in October 2016, and by early this year had dropped to $7 a delivery and $0 an hour.
The Fair Work Ombudsman has also brought a lawsuit against Foodora, accusing the company of sham contracting.
Sham contracting is where a company misrepresents workers as independent contractors to avoid paying them the minimum wage, entitlements and superannuation.
When cases of worker exploitation like this are exposed, politicians and the media portray it as the work of one or two bad companies.
But a rash of companies, especially franchises, have been exposed subjecting workers to superexploitation. Some of the worst cases have been in the hospitality industry, such as those of 7-Eleven convenience stores, service stations and food delivery companies.
The capitalist system is based on the exploitation of workers. There would be no profit for employers if workers were paid the real value of their labour.
But corporations like Foodora have created a business model in which workers don’t even get the pay and conditions to which they are normally entitled.
These businesses look for people who acquiesce to superexploitation because they are so desperate for work or face extra hurdles getting work.
This includes international students, groups that suffer racism and discrimination, young people without work experience, people who have come out of jail, women who have been out of the workforce raising children, those cut off from welfare benefits and many other vulnerable workers.
The only way that workers can fight this exploitation is if they have the unfettered right to organise collectively in unions. This means the right to talk to co-workers, the right to have union meetings without losing pay and the right to withdraw labour and go on strike.
Ultimately, the only way to permanently eradicate the exploitation of workers is by eradicating capitalism and replacing it with a system based on collective ownership and workers’ control of companies — socialism.
While that is likely to be a way off, in the meantime we have to raise consciousness and fight the many examples of superexploitation.
Green Left Weekly is dedicated to doing this.
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