Coronavirus: a tailwind for the food delivery industry
One might think that the unprecedented rise in the demand for food delivery options would translate into an increase in a delivery riders’ income. At a macro-level this is true, however, with mass job losses people are turning to delivery work. This means there has been a huge upswing in the number of restaurants offering deliveries, and delivery workers registering to work. In the wake of COVID-19 restrictions, average earnings in Australia decreased with some earning between $4-6 per delivery, or $12-20 per hour. This represents a decrease of up to 20-50% when compared to pre-pandemic statistics (Sydney Business Insights). Despite predictions of online food delivery sales growing by more than $1 billion in 2021, the numbers don’t easily translate into better pay for riders around the globe (CBRE Report).
If so many Australian’s are being fed by food deliveries, why are the average earnings of riders on the downward trend? Delivery apps are experiencing an unprecedented rise in the number of riders as job opportunities in other sectors decline. The increase in sheer numbers of workers has led to less work for everyone in general and resulted in lower earnings overall. Many riders are now devoting extra hours to delivering food per day, or waiting for orders, just to match their pre-pandemic income.
What’s changing then?
The gig economy is undergoing substantial changes that will alter the way we think about work.
1. Workers being drawn to gig economy
In Australia, the economic downturn from the pandemic has led to a rapid decline in spending in the economy, with retail, tourism, hospitality and entertainment sectors coming to a hard stop. This has resulted in almost 700,000 workers losing their jobs (ABC, May 5th). Many of these individuals are workers in their mid to late 20s and 30s. As a result, the gig economy has become a safe haven for many. Whether it’s contract work or joining the enormous demand for delivery services – it has quickly become their only means to survive in times of pandemic, and global recession.
2. Limited safety net for riders
In these tough times, delivery riders are on the frontline. They are essential workers whose contribution and efforts at times go unnoticed. These workers are treated as independent contractors making them ineligible for minimum wages, health care benefits, or sick pay. Further, many are migrants ineligible for support from the Australian Government stimulus packages. COVID-19 has already opened a line of discussion for riders on the frontlines to negotiate protection, relief funding, and compensation for protective items. While some companies, such as DoorDash and Uber have established COVID-19 funds, we believe more can be done to provide a safety net for these workers.
3. New status for riders
In the long term, we see that riders could see a continued improvement in their work conditions and benefits as companies supporting these workers urge governments to support novel ways to address their concerns. Most recently, CEO for Uber, Dara Khosrowshahi, has called for a third category of employment (Wired, 31st October).
At upcover, for the gig economy workers, we know that there is work to be done in providing better safety and support. What we also know is that this pandemic has highlighted that the gig economy is not only here to stay but that it is quickly becoming the lifeline of our country.
At upcover, we are committed to improving the safety of riders by providing support, resources and financial products to help them at work, at home and in between. upcover bridges the protection gap for the fastest growing workforce in Australia by providing the self-employed and independent contractors with the insurance protection and benefits they need.