The tipping point
Digital technology conditioned us to speed and convenience — at what cost?
Overworked, overwhelmed, overstretched. That’s how workers in today’s food system describe how they feel as the industry continues to prioritize speed and convenience as a metric to establish growth.
The latest example: at Chipotle, where about 40 percent of orders come from digital channels, and it’s causing some trouble: One worker describes feeling “ripped in two” by the physical demands of their time between in-person orders, digital orders, and increasingly aggressive customers. That’s according to a report by MarketWatch, which spoke to many Chipotle employees who say that their workload has gotten far more intense recently. Hiring challenges across the industry don’t seem to be helping; according to the piece, revenue at Chipotle is up 27 percent this quarter, but employee count is just 8 percent higher. (Both figures are year-over-year.)
At the same time, companies like Chipotle continue to tout growth in digital sales as proof of business health and future promise. Digital sales have netted Chipotle $2.7 billion in online revenue so far this year. In 2020, digital sales totaled $2.8 billion for the year. Chipotle debuted its “second make lines” years ago, meant to handle demand from online orders without the showmanship of the iconic in-store front line.
Workers in some locations told MarketWatch that at times, digital orders came in faster than staff could handle them, often leaving customers disappointed. (Are the app's promised order completion times unreasonable? Are customer expectations unrealistic thanks to a years-long race for speed in order fulfillment? Both?)
This is very much *not* simply a Chipotle issue; it’s an industry-wide issue. Unhappy workers at companies that are valued for high growth, digital know-how, and speed. In Philadelphia, delivery drivers for rapid grocery startup GoPuff effectively shut down a busy warehouse, protesting pay and other issues. Gopuff, which is valued at $15 billion, has been growing rapidly, leading to reports of supply chain issues and chaotic warehouse environments where large quantities of food are being thrown away. (Gopuff rebuked the allegations, saying its drivers are among the highest earning in the industry.)
An analyst quoted in the MarketWatch story says that quick service restaurants like Chipotle are facing the same challenge that traditional retail did a few years ago; sales are moving online but the business models are struggling to evolve. In Chipotle’s case, though, it seems to be unmatched expectations between what’s physically possible in any given timeframe and the sort of order volume that shows Wall Street what it wants to see: namely, growth and speed. Chipotle’s CEO recently touted an average order prep time under ten minutes on a call with investors and analysts, noting that a few quarters prior, prep took over 12 minutes. The financial sector might like it, but workers are clearly struggling.
Regardless, the methods and metrics that are working on paper are not working in practice, at least not at the levels that require human labor, and, you know, a little bit of empathy and understanding in service of the corporate bottom line.
“It’s like being ripped in two,” one Chipotle employee told MarketWatch.
Federal eyes [clap], They’re watching you [clap clap]
The FTC wants gig economy giants like Uber to know that it’s watching them. Last week, over 1,000 companies received notices warning against misleading potential gig workers about how much money they can make on the platform. Uber, DoorDash, and Instacart all received the notice, per coverage in the Wall Street Journal ($), though the FTC said that doesn’t mean that the companies are under any sort of investigation.
What it does mean is that the federal government is paying attention to gig work, scrutinizing what these companies say the model can do vs. what it actually does. Fines can exceed $43,000 per offense, though as the WSJ notes, this could be “a slap on the wrist” for a company worth tens of billions of dollars.
Still, there’s sometimes a difference between what these companies say drivers and couriers can earn and what they’re actually earning. At the same time, labor and hiring challenges mean that all companies, including those that rely on gig work, must incentivize prospective workers.
What else is happening?
Uber Eats just released its annual “cravings” report, offering often-cheeky highlights from its business over the last year. I’m actually fairly surprised that the most-ordered restaurant item on Uber Eats is french fries (second: pad thai). Also hello to Sacramento, Palm Springs, and Tampa Bay, the markets who order the most booze.
It also contains a little grocery update: over 1,000 active grocery stores in the U.S. are active on Uber Eats, and its business is growing. And apparently one person ordered almost $8,000 of groceries in a single order once.
This startup wants to help gig workers buy into the companies they drive for: A Toronto-based startup wants to make it easier for companies who use gig labor to reward workers with stock. Moves Collective launched last month as a way to make gig workers shareholders in the companies they drive for. The thought: if workers become shareholders, they might feel more connected to the platforms they work for. (I.e., if DoorDash does well, I, too, do well.) Another benefit, per TechCrunch coverage: if enough workers own stock in these companies, they may be able to influence company decisions in the future.
It’s worth noting that Uber did consider giving stock to drivers before its IPO, but regulations got in the way. Instead. Uber set aside 5.4 million shares — 3 percent of its total — for drivers to purchase, some with cash furnished by the company.
DoorDash backer Softbank sold $2 billion worth of shares last week. The huge investment company is still holding 11 percent of the company.
Would you eat food from a modular restaurant? Is it just a vending machine? Restaurant food is too expensive, say three Stanford grads working on fully autonomous modular restaurants — 10-foot by 20-foot boxes that make bowls for $7 a pop. (Well, right now the autonomous part is only a portion of the operation and the whole thing is supplemented by an actual human chef but the company says its next version will be ready for public launch in 2022.) One it launches, the company plans to mass produce the “restaurants,” hitting 1,000 locations “faster than other restaurants due to our production method,” per a founder.
Is there anything Amazon can’t do? Food, maybe. Amazon’s short-lived foray into restaurant delivery didn’t end well years ago. Now, a recent Insider article suggests its grocery business is just okay. It’s looking to expand its Fresh grocery business, including its “just walk out” technology. But according to reports, Fresh workers are complaining of toxic culture and burnout as the company grows. (By now, sadly, a familiar story.)
And, finally: The McDonald’s McRib has been a source of contention: what is it? Where are the bones? Well, now it’s an NFT.