California Supermarkets Fire Union Delivery Drivers, Replace Them with Gig Workers as Proposition 22 Takes Effect

The newly-enacted legislation allows delivery apps like Doordash, Instacart, and Uber to avoid classifying drivers as employees.

In the early days of the pandemic, Albertsons President and CEO Vivek Sankaran expressed his appreciation for the some 230,000 associates that were employed by its more than two-dozen supermarket chains. Sankaran instituted an across-the-board $2-per-hour pay increase for all of those workers for two pay periods, because he said that just a "thank you" wouldn't suffice for the hours those staffers were putting in—not to mention the additional risks that its front line and delivery workers faced.

"I am so proud to say our teams did not skip a step," he said. "In our manufacturing plants, distribution centers and in our stores, our associates are working tirelessly to serve our customers. They work every day to keep our communities fed, their pantries and medicine cabinets stocked, and to ensure one less worry on our customers' minds as we all face this unprecedented pandemic." In a second statement, Sankaran said that his stores "[were] working with our Human Resources team to ensure that every member of our team who faces a crisis can have peace of mind that we will help them get through it."

Home Delivery to Doorstep
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Less than a year later, that "thank you" has been replaced with a "goodbye," after the company announced that it will no longer use its own delivery drivers at some Vons and Pavilions locations in California. According to KNOCK, in the next few weeks, many of those supermarkets will start using third-party drivers to make grocery deliveries.

"Albertsons Companies made the strategic decision to discontinue using our own home delivery fleet of trucks in select locations, including Southern California, beginning February 27, 2021," an Albertsons spokesperson told Marketwatch. "We will transition that portion of our eCommerce operations to third-party logistics providers who specialize in that service [...] Our HR teams are working to place impacted associates in stores, plants, and distribution centers." (The outlet also notes that Albertson's has an existing delivery partnership with Instacart, and has since 2017.)

It's hard not to connect these changes to Proposition 22, a bill that passed in California in November, which allows app-based businesses like DoorDash, GrubHub, and Uber to classify their delivery workers as independent contractors, not employees. It's complicated, but basically, Prop 22 was an attempt to undo previously passed legislation that would've required those companies to define their workers as employees, allowing them to earn minimum wage, file for unemployment benefits, and take paid sick days. As KNOCK notes, many of Albertson's about-to-be former drivers are union employees, while those who work for Instacart, DoorDash, and other third-party delivery services aren't.

This decision could be one of the first major changes in California's Prop 22-era, but it's almost certain that it won't be the last. The success of that legislation could also open the door for gig-economy companies to push for similar bills in other states: in an early November earnings call, Uber's CEO said that it was "looking ahead and across the country" for the potential to implement "new benefits structures," while the VP of Postmates has signaled its interest in "[building] on a multiyear, worker-led movement in 2021." And, unsurprisingly, worker advocacy organizations have promised to keep pushing back.

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