By many accounts, 2015 was the year of the gig economy. Instead of relying on yellow cabs, we turned to Uber. Instead of buying groceries ourselves, we turned to food delivery companies. Instead of handling online orders themselves, restaurants turned to services like GrubHub. Independent workers (categorized as freelancers, contractors and temporary employees) became a pivotal cog in the American capitalism machine.
Upwork estimates that some 54 million Americans are freelancers. That number is expected to grow at a steady clip, with an Intuit report estimating that 40% of the American workforce could be independent workers by 2020. I'm not sure anyone could predict this shift away from traditional corporation jobs to work that fits Americans' specific time constraints. Rarely a day passes by that the Food Institute's Today in Food newsletter doesn't carry a story about a delivery company expanding its footprint to a new service area. The companies are myriad, and we only cover businesses directly linked to the foodservice and food retail industries.
In fact, the freelancer mindset is starting to propagate in corporate chains. Yum! Brands CEO Greg Creed recently revealed that an "easy beats better" mantra could help energize its Taco Bell, Pizza Hut and KFC chains. He noted that previous efforts to focus on quality over convenience hurt the company's operations. When looking for inspiration to help the chain, can you guess where he looked?
"If you think about the Uber experience, it's easy to use, it's easy to pay, it's very easy to track," he said in a telephone interview after Yum! Brands' investor day. Creed's name drop helps illustrate the increasing importance of Uber to the gig economy, even for industries that are not directly associated with transportation. Foodservice and food retail executives would be wise to keep an eye on the company, as it serves as a blueprint for other gig-economy services and companies that seek to follow in its footsteps.
A pivotal aspect to Uber's success is the fact that it can classify its workers as contractors. However, that classification is currently in jeopardy as numerous lawsuits have been filed by workers that claim they should be treated as employees due to their duties. In response, Uber amended its worker contract to ensure that new workers are prohibited from participating in current or future class-action lawsuits. A variety of states are also working on legislation to ensure that Uber classifies its workers in each state as employees, opening up discussions for healthcare, scheduled raises and other benefits for employees.
What happens to Uber often happens to other companies in the gig economy, as evidenced by worker class-action lawsuits filed against Instacart, Caviar and DoorDash shortly after similar lawsuits were levied against Uber and Lyft back in September. How these lawsuits work out will likely influence how the gig economy continues to evolve in 2016. Do you think the gig economy will continue to expand in 2016 within the foodservice and food retail sectors?
Ninety-eight bankruptcies were filed by companies with at least $50 million in liabilities year-to-date, the highest since 2009, reported Bloomberg (May 28).read more
Chris is a business writer and market analyst that focuses on the Markets, Legal and Washington sections of the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He invites you to contact him via email at email@example.com to talk about anything food-related.
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