Red flags for Checkers Sixty60 and Uber Eats in South Africa

On-demand delivery services have been called out for their practices in South Africa, which allegedly prioritise profits at the expense of the safety and financial wellbeing of their workforce.

Driving.co.za managing director Rob Handfield-Jones recently criticized services such as Uber Eats, Woolies Dash, and Checker’s Sixty60 for hiring their drivers as third-party contractors rather than full-time employees, thereby allowing the companies to avoid paying for a significant portion of their operating expenses.

A race to the bottom

Handfield-Jones described the practices of South Africa’s delivery services as “a textbook case of big business capitalising profits and socialising risk.”

He pointed out that, if their riders were actually classified as employees, it would require the companies to pay the minimum wage, rather than the current system where riders are usually paid a commission on a per-trip basis.

Additionally, if the riders were registered employees, their motorbikes and scooters would have to be supplied, fueled, and maintained by the business.

Instead, e-commerce drivers are responsible for their own operating expenses and, in some cases, rent their bikes, which takes a significant chunk out of the revenue they earn each day.

Handfield-Jones criticized these companies for “lacking even the slightest respect” for their drivers, who are required to work under “horrendous” conditions for “negligible” pay.

He described the practice as a race to the bottom where businesses are competing to cut costs, and workers have no choice but to go along with it, lest they be replaced in a heartbeat.

Motorcycle Safety Institute founder Hein Jonker has expressed similar concerns with on-demand commerce apps, stating that companies should provide or at least subsidize appropriate training and equipment for their drivers.

Furthermore, he wants the companies to conduct regular equipment safety checks, and subsidize medical or life insurance policies of their riders.

Safety is one of the most commonly cited concerns with the industry, as the per-trip payment structure means drivers are incentivized to make as many trips as possible – something that is exacerbated by consumer expectations for speedy deliveries.

This often results in reckless behaviour with drivers taking chances at traffic lights to save time, leading to accidents and even fatalities.

“Call round to a few trauma units and ask them how many dead riders they get per week,” he said. “Now multiply that by the number of trauma units countrywide and the scale of the disaster will become clear,” said Handfield-Jones.

“That is part of the socialised cost of the race to the bottom in the delivery industry.”

When e-commerce drivers are injured on the roads, it places a heavy burden on the victim’s family, as well as the hospital and insurance industries.

This is ultimately passed onto taxpayers in the form of emergency services, traffic delays, infrastructure damage, and post-mortem and pathology costs.

The delivery companies can replace a dead rider instantly, and the cost of the crash to them is negligible; nothing more than a re-delivery and perhaps product replacement. All other costs are outsourced to society at large.

On-demand services have argued that their business model would not be viable with full-time employment and vehicle purchases, but industries like pathology labs, which have an in-house fleet with trained staff, arguably prove that it can be done.

There’s also the matter of how e-commerce drivers are classified under South African tax law.

Handfield-Jones believes that the definitions of employment provided by the South African Revenue Service (SARS) would strictly disqualify on-demand delivery drivers from being considered contract workers.

Instead, they would be classified as employees of an online store or service, meaning they should be on the payroll and registered for tax.

“It’s strange that SARS has this big stick which could provide protection to the abused gig economy workers at a single stroke, yet doesn’t use it,” he said.

“Perhaps, since they’re all minimum wage or a little better, SARS sees no tax benefit in doing so and couldn’t be bothered.”