Your correspondent had tried to keep an open mind and hence the previous article based on Wolt’s paying customers’ feedback and headline news immediately after their €7 billion sale to DoorDash.
But, every story always has three sides, and the second side is not so nice…
Wolt’s management has always said that their delivery people are independent entrepreneurs who enjoy the freedom to work when they feel like it, without all the hassle of being employed. The CEO has described the work performed by his delivery people as a “new type of work” – or that the present employment laws are outdated since they were written for work that existed 100 years ago.
Let’s take a look at this viewpoint based on figures given to FinnishNews by several active Wolt delivery men.
- A typical Wolt delivery person earns approximately €4 on every delivery with a maximum of three deliveries each hour, but one or two deliveries are the most common. Food gets cold after 30 minutes which stops them making 4 deliveries each hour. Most of the time they can only secure 2 deliveries each hour.
- They are never busy for the 10 hours a day the average they need to undertake to secure sufficient deliveries. Business is concentrated around lunch and dinner time which account for some 3 to 4 hours respectively. The average good day has around 16 deliveries, for which they receive some €64.
- From this amount they must pay for the car, with gas costing some €10 to €12 a day, and financing the car, insurance and maintenance around €5 a day giving a total cost €15 a day. If a car breaks down then they cannot work and a parking fine of €80 requires two working days to be covered.
- Most of the men said that they work all day from morning until late evening and generally put in 10 to 12 hours a day for five or six days a week.
- Assuming the above means that they earn some €49 a day – meaning that their net income before taxes is some €5 an hour, and that is without holidays, healthcare, pensions, and no hope of promotion or training. Nobody in Finland is would work for that kind of money without some chance or earning more through selling your company. Who would be willing to buy a Wolt delivery man’s company with that work load and such a small hourly payment?
- Their hourly pay of €5 is not a living wage – only those people who have no other possibility to work elsewhere and who desperately need cash to support their family here or abroad work under these conditions. In fact, Wolt’s business rational is built on this pyramid of enslaving the desperate, and they must be perfectly aware of this exploitation.
This deliberate policy allows customers to afford food deliveries, and permits an expansion of their business empire, whose high volumes generate the potential for profit which has yet to be achieved.
If Wolt paid a living wage this business would dry up in a day!
Wolt’s app is not a wonderful digital innovation. It is nothing more than a very ordinary piece of software that is built on Google Maps infrastructure and uses a mobile phone’s location hardware and software. Thousands of companies have been using such real time GSP digital solutions for years.
Restaurant owners also confirm that they make very little profit from Wolt, that is also now busy in building its own kitchens in competition with the restaurants! Most of the restaurants pay Wolt 30% of the sale of each order. Larger restaurants pay a little less. Many restaurants do not choose to deal with Wolt because the business is not sufficiently interesting.
DoorDash’s decsion to buy a big competitor like Wolt aims at beating the competition to grow the fast and end up as being the biggest player in the global markets. Is that strategy going to end in tears when they discover that the whole business logic is built on sand?
The final question, one must ask, is why the two Ministers above were so pleased to congratulate Wolt’s founders. Their business model is built on taking advantage of ordinary workers, many of whom are so desperate that they have little choice in finding alternative work. Would the Ministers be willing to see more working folk employed on these terms?
Yes, the CEO of Wolt was right when he said that the employment laws need to be changed!
Change is needed to stop this type of abuse, and one can only hope that the two Ministers take that responsibility seriously.