Faizan Ahmad
Analysis of Platform based Freelancing in Long Term from Independent
Worker’s perspective
BACHELOR’S / | ABSTRACT
TURKU UNIVERSITY OF APPLIED SCIENCES BBA: International Business
2020 | 45
Author: Ahmad Faizan
Analysis of Platform based Freelancing in Long Term from Independent Worker’s
perspective
This research aims to provide an insight to the Sharing Economy in platform based Freelancing work from a long-term point of view. As the sharing economy has become increasingly popular, the disadvantages are also becoming a major point of discussion and research. There is quite a lot of previously carried out research and analysis on this subject, both quantitative and
qualitative. Previous research shows workers in these platforms can be using them for both primary and secondary sources of income. While, casual workers are not that critical of the platforms, full-time workers have many issues and can be concerned about the security of their income. For this research, qualitative data collection method was used. The case companies are Wolt and Foodora. The data collection includes interviews of individuals working at these companies and online sources. The interviews were carried out through video and audio calls.
after combining the information from literature review and interviews, conclusions are given based on the data collected and analyzed. The findings suggest that the platforms in Sharing economy can be a short-term solution for an income but they are not ideal in long term due to the uncertainty of income and lack of benefits.
Keywords:
- Freelancing - Sharing Economy - Long-Term
- Platform Based Freelancing
Table of Contents
1. INTRODUCTION: ... 5
1.2. Background: ... 5
1.3. Motivation: ... 6
1.4. Hypothesis: ... 7
1.5. Research Objectives and Questions ... 7
1.6. Structure of the Thesis: ... 8
2 Sharing Economy ... 9
2.1. Case Companies ... 12
2.1. Wolt Enterprize ... 13
2.1.2. Courier partners ... 16
... 16
2.2. Foodora: ... 17
2.2.2 Couriers ... 18
3. Research Methodology ... 20
3.1 Data collection: ... 21
3.1.2 Wolt Couriers ... 21
3.1.3 Foodora Interviews: ... 24
4. Analysis ... 27
5. Limitations ... 29
6. Conclusions ... 30
References ... 32
Appendices ... 38
Table of Figures:
Figure 1: Sharing Economy 9Figure 2: Wolt Logo 13
Figure 3: Sceenshot Wolt App 13
Figure 4: Wolt Couriers 16
Figure5: Foodora Logo 17
Figure 6: Restaurant Selection Foodora App 18
Figure 7: Foodora Courier 19
Graphs
Graph 1 Sharing Economy Revenue 10
Graph 2 Wolt Sales 2015 – 2018 14
Graph 3 Wolt Profits 2015 – 2018 15
Appendices
Appendix 1: Wolt interview 1 38
Appendix 2: Wolt Interview 2 40
Appendix 3: Wolt Interview 3 41
Appendix 4: Foodora Interview 4 42
Appendix 5: Foodora Interview 5 44
Appendix 6: Foodora Interview 6 45
1. INTRODUCTION:
As the job trends have changed over the last few decades, new opportunities have opened due to advances in connectivity (Coon, n.d.), for example, multiple people can have a video chat from 4 different continents at the same time thanks to super-fast internet and software
development. This has also brought new opportunities in the job market; people may be working for clients in other countries for years and have a good relationship even though they never even met in person (Heaton, 2020).
Freelancing is one of the most recent trends, but it is not exactly new (Younger, 2018). People have been running their own businesses since the first civilizations, even the times of Pharaoh when carpenters, tailors, blacksmiths and so on ran their own shops and provided their services to clients, as the term Freelance means “a person who is self-employed” (Bianchi, 2017)
However, a new form of freelancing has become popular, which can be described as platform based freelancing in the sharing economy also known as independent contracting according to (Hawkins, 2018), and freelance workers can be found on tech platforms such as Uber, Upwork, Elance, Wolt, Foodora and Freska.
This research is aimed at providing an insight into platform based freelancing in the sharing economy for the purpose of long term career investment. The research analyzes Platform based freelancing and the information could be helpful to individuals of all ages and education
backgrounds in deciding whether to pursue work on these platforms depending on their circumstances and goals in long term.
1.2. Background:
The concept of having a job is a fundamental part of the social and economic structure of our society; there are exchange of values and services. That value is paid in currency -and the amount of money we receive is perceived through the value of work and results we provide to those who need it. Some of us receive a fixed amount of salary for the work we provide while freelancers are paid by task. The society where the human being lives nowadays has
experienced several changes and this continuously shapes it into its own necessities.
Therefore, the variety of jobs changes constantly, creating different necessities and demands along the changes society experiences.
Due to this advancement in how our system functions, the variety of jobs that are available and in demand have increased massively. It would be hard to explain to a cave man from the prehistoric era or a person from the 18th century that in this time of human history, a group of individuals survive by guiding a ball with their feet just to hit it inside a big rectangle made of bars, and therefore making their life very luxurious. Sometimes, a footballer`s work might not be considered as a job since sometimes it is not perceived as a job of big effort from a working person`s perspective, but being a successful professional athlete easily pays off basic needs and that`s the most important part of survival in modern society.
Nowadays, the Sharing Economy has become increasingly popular (Miller, 2019). The simplest way to describe the concept of Sharing economy is peer to peer (P2P) exchange of products and services, mostly short term (Investopedia, n.d.) Uber is an example of sharing economy and it has caused a major economic impact and the company has grown so rapidly that it has gained more value in six years than General Motors which is over a 100 years old (Petropoulos, n.d.).
1.3. Motivation:
The researcher has been a part of many conversations where people regretted ending up in the wrong line of work. Moreover, the author grew up in a family with military background and then watched his parents and their generation go into banking, IT and medical fields due to the family driven choices that had to be followed. In 2019, people have even more choices but still may end up in the wrong career due to many issues such as lack of guidance, knowledge, financial issues, being desperate to find a source of income and competition. The motivation came from the idea of how valuable and important it is for a person to have a promising, progressive career and be pleased with their jobs. It is important to leave the current line of work and move on when there is an empty feeling about the future. Nowadays, more independent freelance platforms such as Upwork, Uber, Wolt, Freska, etc. have become increasingly popular.
The purpose of a career is learning and using a certain skill and keep exceling in terms of experience, financial situation, social status, retirement plans and long-term aspects which are now overlooked for short-term solutions to a considerably worrying extent.
1.4. Hypothesis:
P
latform Based Freelancing is becoming increasingly popular and the sharing economy is here to stay(Tabcum, 2019).
However, after many years of growing and expanding, several issues have been arising such as lack of benefits, no guarantee of fixed income, competition and constantly changing models. Due to these issues, the theory is that platform based independent work in the sharing economy is considerable option in short term such as being a student or using the platform as a secondary source of income, however they are not a reliable source of income on long-term.1.5. Research Objectives and Questions
The following research questions aim to find the answers to the hypothesis presented in this research:
1. How is the working environment of a job in the Sharing Economy?
2. Why would an independent worker pursue it?
3. Should it be long term?
1.6. Structure of the Thesis:
The structure of the research will start with introduction and background of case companies and detailed explanation how the work is in case companies Wolt and Foodora from a courier`s perspective. These companies were specifically chosen because they operate in Finland and they are example of companies functioning in the Sharing Economy.
Secondly, there is information on how the companies are doing at the time this research was being carried out. In order to understand first-hand the current situation of these platforms, certain individuals working with these companies have been interviewed regarding their experiences with the companies and suggestions. Based on the collected data analysis, a conclusion is given.
Introduction
Motivaton
Research Objectives
Literature Review
Methodology
Interviews
Analysis
Conclusion
2. Sharing Economy
What is the Sharing Economy?
The most common definition used to describe the sharing economy is the peer to peer exchange of services or products (Investopedia, n.d.) or the sharing of services and assets between private individuals (Lovick, 2020). The services are available on demand between two parties and there is no long-term ownership of assets or signing of contracts (Delloite, 2016). According to Rachel Botsman and Roo Rogers, the utilization of shared and open
resources across multiple platforms that we see today can
be described as the social revolution (Figure 1, Source: Shutterstock)
(Rachel Botsman, 2010). Uber and Airbnb are examples of companies functioning in the sharing economy. According to mid 2019 statistics Finland, around 180,000 people are self-employed (Yle, 2019). One of the major motivations for people to work in the sharing economy is the flexibility (Rosenblat, 2016). Some people use the platforms for earning extra outside of their traditional 9-5 jobs while some use it as a short-term source of income and some use it as a main source of income in sometimes in long-term (Rosenblat, 2016). In Finland, many companies such as Freska, Foodora, Wolt and Enjoy are functioning as part of the sharing economy and operating as freelancing platforms. According to Time Magazine, the Sharing Economy is one of ten ideas that will change the world (Time, 2011)
What are the origins of Sharing Economy?
The concept is not exactly new as the idea has been common in the past among communities through bartering (Miller, 2019). The market experienced a change in the economy after Ebay was launched in the mid 1990s, people had access to items they were looking for and this peer to peer exchange of products and services became increasingly popular (Belyh, 2015).
Furthermore, the technological advancements since then have had a huge impact on the market and has led to the formation of more ideas that we see today such as Uber or Airbnb (Belyh, 2015).
How has the Sharing Economy Impacted life:
The sharing economy has a reputation of effecting traditional established businesses (Miller, 2019). Several industries such as transportation, consumer goods, health and tourism are examples that have been disrupted by Sharing Economy (Miller, 2019).
(Graph 1) In 2017, the revenue of platform providers in the sharing economy was $18.6 Billion and is estimated to reach $40.2 billion by 2022 (Statista, 2017).
One of the big players such as Uber has many advantages over the traditional services it has replaced to an extent (Wihbey, 2016). Customers can now go around in a lower price than traditional taxis which has increased demand for workers (Wihbey, 2016).
The job offers flexibility and workers choose to work whenever they desire, some people use this kind of work as a secondary source of income while other use it as their main source of income (Wihbey, 2016). As one signs up as an independent worker, there are no benefits from the company itself that a regular employee has (Wihbey, 2016).
Upsides of the Sharing Economy:
The sharing economy has many benefits such as increasing sustainability, community trust, less ownership and more self-employment opportunities (CrowdHolding, 2017). As more and more people do ride sharing, sell used items they don’t need and rent items they would need for a short period, there is less waste being produced and everything is used for longer periods (Matofska, 2019). One may purchase a unique designer dress they only needed once and is now sitting and gathering dust in storage, that can be taken out for rent or selling to another person who needs to live its purpose again and see the light of day, many applications such as The Volte allows one to do that (Anderson, n.d.).
Downsides of the sharing economy:
There are several downsides to the increasingly popular sharing economy such as uncertainty, trust issues, unstable income and lack of benefits (Neuburger, 2019). As this idea is still in its early stages, there are lack of regulations from government and legislations, hence some safety related concerns are high (Neuburger, 2019). Moreover, even though flexibility sounds
convenient, the demand for services and products is not steady and unpredictable which creates problems related to a stable income (Neuburger, 2019).
What is the current impression of Sharing Economy from a freelancer`s perspective?
For the workers, the first and foremost aspect is the flexibility to decide how much and when they work (Rosenblat, 2016). Hence, many people who work in companies such as Uber and Lyft can be found using these platforms as their secondary source of income outside of their professional employment (Rosenblat, 2016). These individuals are less likely to be effected by reduction rates caused by updates in earning models of these ride sharing platforms as they are not dependent on these platforms as a primary source of income (Rosenblat, 2016).
On the other hand, full time drivers who depend on these platforms as their main source of income are motivated due to their investments such as a proper vehicle which is within company guidelines (Rosenblat, 2016). However, since the work depends solely on demand and that determines what one earns, the drivers are in an insecure position regarding their
income (Rosenblat, 2016). A common experience among the drivers is continuous update of earning models (Rosenblat, 2016). Many drivers start from a positive perspective and they are very satisfied from the beginning, however, as time goes on and the company`s constantly changing earning models result in a negative outcome regarding income and the drivers lose trust overtime (Rosenblat, 2016). Moreover, casual drivers who use the platforms as a
secondary source of income are a threat for full time drivers as the level of demand decreases due to higher number of drivers (Rosenblat, 2016).
Another group of people that takes advantage of these ride sharing platforms are people with lack of higher education or criminal record which lowers their chances of finding a job
(Rosenblat, 2016).
The above information shows that there are varied impressions of these platforms in the sharing economy and the people who seem to benefit the most are the casual workers who use the platforms as their secondary source of income (Rosenblat, 2016).
Effects to currently existing systems:
In terms of Uber for example, the industry which is certainly effected is the Taxi industry which has forced many taxi businesses to innovate and be more competitive (Taxiinsurer, n.d.).
According to the writer, Edward Ericson Jr, the business models of these ride sharing platforms are not concerned with drivers making a living and they are no better than a regular taxi for drivers (Zaleksi, 2015). These drivers are considered as micro entrepreneurs and the platform takes around 20% of their earning while the drivers are not entitled to any kind of benefits (Zaleksi, 2015).
2.1. Case Companies
To answer the research questions, two companies functioning in Finland have been selected.
They have been chosen as they have been operating in Finland for many years and a lot of independent workers have signed up. These two companies were specifically chosen as they are big players in the market and have gained popularity among their customers during recent years.
- Wolt - Foodora
2.1. Wolt Enterprize
Wolt is a tech company that specializes in food takeaway and delivery. It was founded in 2014 by Mika Matikainen, Juhani Mykkänen Elias Pietilä Lauri Andler and Oskari Pétas CEO of slush; Miki Kuusi. (Go-Grow, 2017)
The platform runs on an application which is available for (Figure 2) smartphonesand tablets running on IOS and Android operating
systems and customers have to sign up. In the beginning, the company focused on takeaways and in 2015, they started offering home deliveries.
Anyone can order food from all the available choices of restaurants willing to prepare the order.
The order will be delivered to the customers by the couriers working with Wolt as long as the customer`s location is within a specific and fixed delivery range. At the moment, Wolt is functioning and running in cities of 22 countries which are mentioned below:
• Azerbaijan
• Croatia
• Cyprus
• Czech Republic
• Denmark
• Estonia
• Finland
• Georgia
• Greece
• Hungary
• Israel
• Japan
• Kazakhstan
• Latvia
• Lithuania
• Malta (Wolt App Restaurant Selection) (Figure 3)
• Norway
• Poland
• Serbia
• Slovakia
• Slovenia
• Sweden (WOLT, 2019)
Expansion of Wolt:
According to statistics, (NewsNow, 2019) Wolt has become popular due its expansion in Europe; investors have poured in €110 million to expand it to even more countries. The company started in Finland in 2014 and since then, it has expanded to 19 countries. With the recent investments, the expansion is expected to grow more. For example, in April 2017, they started delivery in a new city in Finland, Oulu. They were expecting and quote “a good demand”
but the demand was much greater than the expectations. (Passanen, 2017).
The new city launch was more of a rocket launch when the demands came flooding in during the new weekend (Passanen, 2017). Customers were already aware of the company due its presence in other major cities of Finland such as Helsinki or Turku. The demand was apparently way more than expected, as mentioned earlier (Passanen, 2017)
Financial Information:
Figure 1: Source: (Finder, 2018) (Graph 2)
From this figure above, the company`s sales in 3 years have gone from 0.2 million to 20 million, which is a major increase. It is obvious that the idea, the outcome, the creation and the overall process concluded successfully from an economical perspective was a success for the company and all parties involved. Therefore, the number of employees and independent freelancers have obviously also increased. The company started their business with 6 people and by June 2019 there were 450 freelancers. (WOLT, 2019) The latest funding size has been
€130 Million which is a substantial amount and 11 investors have been involved including 83North, Iconiq Capital, Niklas Zennström, Inventure Oy, Risto Siilasmaa, Ilkka
Paananen, Lifeline Ventures, EQT Ventures, First Fellow Partners, Highland Europe (Craft , 2019)
However, according to financial figures, the company has been accumulating more and more loss every year (Finder, 2018). The figures below show their profits in the previous years:
(Finder, 2018)
(Graph 3)
2.1.2. Courier partners:
Over the years, just like Uber, independent freelancers working for Wolt has become a popular place for many such as students, immigrants and people trying to earn extra outside of their usual jobs. It works well for many since they can choose their working hours. Moreover, since there is no time limit and the demand is reasonable most of the time, their earnings cover their needs.
(Image Source: Wolt.com) (Figure 4) How the delivery and earning model works?
In Finland, the model is the following one: a delivery would pay €4.3 up to 1.5 kilometers from the restaurant and after every 250 meters the rate would go up by €0.425
(partnersfinland@wolt, Personal Communication, Dec 04, 2019).
For example, if a customer`s order is from a location which is 2.7 Kilometers from the
restaurant, a courier would be paid €6.425. However, the distance is not measured based on journey taken by roads but instead it is measured in a straight-line displacement from restaurant to customer`s location and according to Wolt, this is the only measuring method they can use at the moment (Wolt, 2020).
Moreover, a courier is not bound to one delivery at a time and they can receive multiple pickups at a time and then deliver them in an order (Wolt, 2020). This is possible due to the cleverly designed system which decides based on location of the customer, time for preparation and the experience of a particular courier based on their past achievements (Wolt, 2020). If one or more customers are based in a similar location or one is on the way towards the next, the system would instruct the courier to pick both orders and drop them off one by one depending on whose location is closer (Wolt, 2020). This allows the courier to use one journey to drop multiple orders and the earning does not drop (Wolt, 2020).
For example, in case of Turku, a courier may pick up 2 orders, one from Burger King at
Aurakatu 12 and another from Kawaii (Aurakatu 6) 5 minutes apart. Then he`s instructed to drop
one off at Itäinen Pitkäkatu 19 and the next at Tilhenakatu 21, so the system decided to give instructions based on customer location. The courier also earns the full amount from both deliveries and the case would be the same if two orders are dropped in the same building 5 kilometers from the restaurant, he/she would earn €11.7 combined. On a normal day, a courier can expect to receive 3 deliveries per hour so that would go from €12.00 to €16 per hour on average during weekdays. Therefore, 8 hours of work could return €90-140 in earnings if demand is between normal and high.
The pay per delivery is even better during the weekends because the starting price jumps from
€4.3 to €4.7 and demand is considerably higher during the weekend especially Friday night and whole of Saturday. The weekend earning model begins at 18:00 on Fridays and ends at 22:30 on Sundays. So, due to the higher pay and increased demand, a courier can expect to earn
€15-20 per hour increasing the 8 hours return to average €160. However, since one is working as a freelancer, there is no health insurance, paid holiday, paid sick leave and retirement benefits, which means all these aspects have to be covered by the courier themselves.
Booked Hours:
Sometimes the work can be slow due to low demand; for example, at 8:00 AM on a Sunday or on a Monday morning, which is why couriers can book hours beforehand with guaranteed payment even with no deliveries. On weekdays, €8/hour will be guaranteed and on weekends the price will go up to €10/hour. Moreover, couriers have to be online and in the hot zone during booked hours.
2.2. Foodora:
Foodora is an app based food ordering company based in Berlin, Germany. It was founded in 2014 (Foodora , 2020). The company is functioning as a sub brand under Delivery Hero (DeliveryHero, n.d.).
(Figure 5)
Just like Wolt, one can take advantage of Foodora’s services through their application on devices running IOS and Android. Anyone within the delivery range can order from the list of available restaurants willing to prepare the given order. By May 2020, Foodora is functioning in the following countries:
• Finland
• Norway
• Sweden
(DeliveryHero, 2020)
Expansion & Current Status:
There have been a few ups and downs in the past few years, for example the recent termination of operations in Canada due to strong competition and the profits were not sustainable enough to stay in the market (Westol, 2020).
(Restaurant Selection Screenshot) (Figure 6)
Financial information:
The company`s current estimated revenue is €18.96 Million (Owler, 2020)
Background of Foodora:
Following the year Foodora was founded, the company was acquired by Rocket internet in April 2015 (CrunchBase, 2015) and a few months later in September it was acquired by Delivery Hero (DeliveryHero , 2015). Finally, in December 2018 Dutch food delivery group Takeaway acquired both Delivery Hero and Foodora and since then Foodora has been functioning under Takeaway (Ecommerce, 2018).
2.2.2 Couriers
How the delivery and earning Model Works?
Foodora has a different working model than Wolt, couriers have to have a fixed number of hours of shifts per week depending on their agreement (Bajorowicz, 2019). As the couriers are working as freelancers, they can cancel the shifts one week in advance if needed (Bajorowicz, 2019). There is a guaranteed amount of payment per hour of €7 that couriers receive regardless of how
many deliveries they make. Over the hourly pay, they receive a (Figure 7) starting amount of 2.2 euros plus distance over that (NewsNow, 2018).
For example, if a courier receives 2 deliveries in an hour, they will earn minimum €11.4 amount for that time. Majority of Foodora`s couriers use bicycles as their mode of transport
(DeliveryHero, 2020).
3. Research Methodology
The goal of this research is to determine whether pursuing a long-term career in the sharing economy platforms is a desirable option over previously existing ways of having an income. The share economy is increasingly growing; however, it has some downsides (Piletic, 2018). In order to answer the research objectives, there is detailed information on the case companies regarding their background and work environment in order to understand the nature of these companies. There are interviews with specifically chosen individuals who have been working on case company platforms for many years. Qualitative data gathering methods have been used.
As there could be some drawbacks with information collected from quantitative data approach (Nielsen, 2004) , qualitative data allows one to be more flexible and not be bound to the
limitations of quantitative data and also incorporates human emotion into the research (Brandon Gaille , 2018)
In order to get detailed information regarding personal experiences and thoughts of freelancers working on case company platforms, specifically chosen people have been interviewed about their experiences with the case companies during the period they have been working.
3.1 Data collection:
Qualitative Data:
For this research, qualitative data collection methods were used to collect information through interviews.
Interviews:
The information gathered in qualitative research is primary and is collected through interviews.
The individuals selected for these interviews were specifically selected due to their experiences working with the case companies. The interviews were carried out by direct phone call or video call. The questions were open and respondents were free to express their opinion and
suggestions. The first questions were about their reasons for joining the company and then there were questions related to their experiences working with the company and suggestions, lastly there was there age group and education background. The purpose of the interview was to find out answers to these five main questions concerning their work experience:
• Why they started?
• How the work is now compared to when they started?
• The upsides and downsides of the work?
• Would they recommend this work to others?
• Would they consider it in long term?
3.1.2 Wolt Couriers
A total of 3 people with years of experience working with Wolt were interviewed. In order keep their identities anonymous their names are not mentioned, only age group and education background.
Background of Interviewees:
Respondent A has been working since 2015 and has the most experience of the three respondents. His education background is BBA (Bachelors: Business Administration), age group 35-50 and works in Helsinki.
Respondent J started at the beginning of 2018 and has been a top earning courier of the week several times, the respondent is currently a student getting his degree in BBA (Bachelors:
Business Administration) age group 25-30 and lives Helsinki.
Respondent M started in February 2017 and has three years of experience working for Wolt.
The respondent recently acquired an MBA, lives in Helsinki and age group 25-40.
Why they started working for Wolt?
Respondent A started due to the flexibility and convenience, as there is potential for earning a lot depending on the time and effort one is willing to put. Moreover, the job is not boring and one keeps moving around which also gives one a physical advantage of not being stuck at one spot.
According to respondent J, the freedom of working at any time convinced him to sign up. The independence allowed him to be flexible with working hours and be able to focus on his studies on the side. Furthermore, the company was also expanding and becoming popular which increased demand for couriers.
Respondent M signed up since he saw the opportunity of earning satisfying income while being an independent contractor.
Benefits of Working for Wolt:
According to respondent A, the local knowledge improves due to driving around to random addresses of customers, moreover, sometimes customers can give tips, for example one customer gave the wrong address and the respondent offered to deliver to new address, the customer was very thankful and gave €20 tip. The support team is also very helpful, according to respondent J, there is no requirement to be bound with time, one can possibly earn as much as they want depending on how much time and effort they are willing to put. Furthermore, any mistakes are covered by the company for example, if the food items trip over during transport and it becomes a mess. Customers sometimes give very good verbal feedback. One example is when once the food was delivered much earlier than expected and the customer gave a tip and even Wolt acknowledged that and rewarded a tiny bonus (Respondent J).
Respondent M started while being a student and according to him, the flexibility allows one to focus on studies, the income is acceptable and the work is not very demanding. It doesn’t matter what sort of vehicle one uses so one is also free to choose whichever type vehicle they would prefer (Respondent M)
Challenges:
The respondents also expressed their criticisms about the company, for example according to respondent A, the communication is bad meaning the feedback and improvement suggestions from long term couriers is not given the importance it needs. Moreover, the earning model has been continuously updated and has become worse overtime and the income has reduced for the same amount of effort and working hours (Respondent A). The compensation for one`s own investments such as fuel costs and vehicle ownership and the work is physically demanding if one has to work for long periods.
As there is no earning limit, one could get stuck for a longer time if they start without an earning limit. There is no such thing as progress, no promotions, no direction or goal to reach
(Respondent A). The application is a mess in terms of distance payment, as the distance is measured in straight line displacement, the compensation for the journey is unfair since the actual drive is always longer than the displacement (Respondent A). Moreover, parking can be an issue in central areas. (Respondent A).
If one sick or on holiday, there is no coverage for that and there is no health insurance so one is pretty much on their own (Respondent J). If there is no available work and one is online, that time is wasted and there`s no earning, especially in summer (Respondent J). Respondent J had an unfair, unusual experience when he reached the wrong address, and the resident took the food anyway, later on the actual customer obviously was not happy (Respondent J).
The company has been over hiring couriers making it problematic to receive enough work (Respondent M)
Recommendations:
The answerers had recommendations in terms of which kind of individuals under what
circumstances can benefit most from this sort of work. All respondents recommended this work to students due to the flexibility. However, according to all respondents it is not recommended it to people looking to use it as a main source of income because it can take too much of
everything such as time, effort, stress and own investments (Respondent A). According to the longest running courier for the company among the three answerers, the company has drifted towards a negative side for couriers (Respondent J).
3.1.3 Foodora Interviews:
Similar to the other case company, a total of three interviews were carried out for Foodora. The respondents have a number of years of experience working for the company. They were active couriers through their time with the company:
Background of Interviewees:
Respondent ‘S’ had 2 years of experience working for Foodora and education background is MBA (Masters: Business Administration) and age group 35-40. Respondent ‘P’ has 4 months of experience with Foodora and is currently getting his degree in Masters in Computer Science.
Respondent U has a Master’s in Business Administration and has 2 years of experience working with Foodora. All respondents live in Turku.
Why they started working for Foodora?
Respondent P wanted to join Foodora as he needed a part time source of income and the company offered working hours that were suitable for his schedule, moreover, he had some experience in delivery work. Respondent S signed up as he needed a part time, secondary source of income. According to respondent S, the work is not demanding and partly flexible in terms of time and it suits his current circumstances as a student. Respondent U joined Foodora to learn about the company and experience the environment in terms of, “management
strategies including team management, marketing, leadership, competition, customer relationship management, business development and administration”.
Benefits of working for Foodora:
All respondents had 25 hours per week contracts hence they were classified as part time workers. One of the main benefits of the work according to all respondents is that it is easy and simple, moreover, as there are shifts and one is guaranteed to receive a minimum amount for every hour of their availability, hence they cannot go home empty handed (Respondent P).
Respondent S expressed that there is independence to some extent as one can choose their own shifts a week in advance. Furthermore, there is a lot travelling around and as the work is physically demanding, one stays in good shape. The equipment given by the company is very well thought out and useful according to respondent P, moreover the training is helpful and the management is focused on micro managing and that avoids couriers from exploiting loopholes.
According to respondent to U, there is good sense of teamwork among the couriers as there are teams which altogether have shifts at given times and each team has a leader who is chosen due to their experience. Respondent U started working for Foodora
Challenges:
There is no compensation for a customer`s mistake such as wrong address and the courier has to go to the actual address according to respondent S, that is an inconvenience sometimes as there is loss of extra time and effort with no compensation. Moreover, the application is not good enough at making efficient location based decisions regarding tasks for couriers.
If a courier has to cancel or is unable to come for their shift, their rank is negatively affected according to respondent S, this of course is applied to all couriers. The company is struggling financially and their policies keep changing time to time hence making the future quite
unpredictable. Respondent S also expressed the problems of working as a freelancer for a company like this, as one is not their employee, there is no paid or sick leave and no kind of insurance.
According to respondent P, even though the company pays per hour a minimum amount when there are no tasks given, the amount is not enough to cover basic expenses and since the work is unpredictable, this aspect can create salary related concerns. Respondent U expressed his concerns about the leadership being unstable and weak management issues, the team rating system is unfair, micro managing attitude is irritating and work has become less convenient after the removal of office premises where couriers could stop for a toilet break and have coffee or tea.
Recommendations:
Respondents S and P suggest this job for students as it is simple and convenient. The company offers 25 hours per week which is the maximum allowed by Finland`s government for students.
According to respondent S, platform economy is unpredictable and the work and earning models in this company is not sustainable and reliable for a long-term source of income.
According to respondent U, it depends on an individual`s requirements and expectations from a job.
All the respondents also say this is their secondary source of income as the working hours do not provide enough income to cover all their living costs.
4. Analysis
The sharing economy is gaining popularity and it seems there is no turning back. From the customers side, these platforms are offering the services at a very affordable rate with much more choice. It clearly seems the sharing economy platforms are here to stay and there are certainly many upsides to it as mentioned in the research. It is helping us to be more
sustainable, there is more use of materials than before, there is more freedom and flexibility.
Previously carried out research shows these freelance platforms started with very promising business plans and earning models and the future looked promising. Many independent workers who signed up were satisfied for many years with the work and earnings. However, these
companies kept updating their earning models which had a negative effect on worker earnings and satisfaction.
Foodora has shifts for every worker and micro manages the couriers while providing them no benefits. Some argue that Foodora should treat their workers like employees and provide benefits since they are not treated like independent workers. Hence many Foodora workers have gone on strike in other countries such as Australia (Chau, 2018)
Previous research also shows that these platform jobs are considerable options as a secondary source of income and the interviewees from this research also say the same. The data from interviews shows that the work itself is easy, flexible and not demanding most of the time but due to the lack of benefits and unpredictable income, majority of respondents would prefer to not work for these platforms in the long run due to their experiences.
In case of Wolt, the first respondent A had the most experience since he joined when Wolt was in its startup phase. They were also testing a lot while he was working and he was a key person in giving feedback and suggestions for making the system more feasible and efficient.
Respondent A described those early years as the “Good old days”. Now, since a couple of years, he has been mentioning about leaving this job, this was only a part of our personal conversations and his answers to this interview reflect that.
Respondent A made it clear the company`s earning model for couriers has been plummeting in terms of offering their couriers the best value for their time and investments at this point. With
this job, there is no such thing as promotions, paid holiday, sick leaves with pay or health insurance, you are pretty much on your own while you earn the salary of an average worker.
Wolt Findings:
This interview produced interesting results. The most common answers are below:
• This work is recommended to students and people looking for secondary income
• The flexibility and freedom of working time is an upside.
• There is no insurance or paid holiday
• There is no guarantee of work and fixed amount to be received in the end
• The earnings are less than they were years ago
The respondents also expressed they would change job if they find something in their fields.
Foodora Findings:
As Foodora requires couriers to have shifts, the respondents express there is still guarantee of payment when there is no demand, however it is the minimum amount. The respondents had some similar answers which are listed below:
• Just like Wolt, this work is also recommended to students due to the 25 hour per week contract
• The work is easy and physically healthy
• The company micromanages a lot
• It is a considerable secondary source of income
Just like respondent S commented, platform economy is unpredictable and Foodora for
example is struggling to sustain itself in the market, which is why he would not recommend it in the long run.
5. Limitations
There is lack of information and previous research available online on case company Wolt, which is based in Finland and expanding to more countries. In case of Foodora, the company is a sub brand of Takeaway and finding financial information on Takeaway is not been issue but Foodora`s data apparently is combined with Takeaway`s all other sub brands.
6. Conclusions
The purpose of this research to find out why independent contractors chose to work on these platforms, who should consider working on them in what circumstances and if these freelance platforms are considerable and reliable source of full time income in the long run.
The analysis shows that Wolt and Foodora is an ideal option for students and others who wish to earn an extra secondary income. Previously carried out research in Harvard Business review article titled, “What motivates gig economy workers” also showed that the people who benefited the most were part time casual workers (Rosenblat, 2016). The information from interviews shows similarities with that previously carried out research and the respondents were concerned about the unpredictable nature of work and lack of benefits. The freedom and independence allows workers to focus on other tasks which is why these platforms are ideal options for students and casual earners. However, the findings suggest that these platforms are not a reliable long-term solution for a steady sustainable income.
Moreover, there is the issue of being unable to work due to medical reasons, any kind of freelancer has very little to no benefits such as medical coverage, paid holiday and retirement benefits. When they are unable to work, there is no earning at all and a worker could get into financial difficulties. Moreover, if there is a large medical bill on the freelancer`s hands, they are completely on their own to cover it. If the medical issue last`s long then they will be facing loses due to not making any earnings for sick days. these independent freelance platforms due to their competitiveness and short-term benefits are not an ideal place to pursue a long-term career.
Furthermore, the sharing economy is quite unpredictable and these platform enterprises are constantly updating their terms and conditions to meet demand and make profit. This practice sometimes does not go as a company plans as it showed in terms of Foodora, the company`s operations were not sustainable enough to keep running in Canada and they had to terminate operations. Moreover, even if a company manages to maintain a strong position in the market, motivated full-time workers do not wish to stay after they lose trust in the company`s treatment of workers (Rosenblat, 2016).
Competition within among these platforms is also an issue, as an interviewee pointed out, the platform lets more people join than needed and the demand can be generally less compared to availability of workers. As flexibility and independence is a key factor about these platforms, the demand and the number of workers available to work is always unpredictable especially for a company like Wolt, because anyone can come online whenever they feel like. This kind of flexibility is problematic for motivated full-time workers who have invested a lot for this job as their earnings are affected by casual workers (Rosenblat, 2016).
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Appendices
Appendix 1: Wolt Interview (A)
- When did you start working with Wolt?
A: 2015 fall
- How many hours do you work per week?
A: 54 hours
- How is the situation now compared to when you started?
A: It is much worse
- Why did you start doing Wolt?
A: I started due to the flexibility, and seemed feasible and convenient at the time.
- What are the positives about the job?
A: One can earn a lot of income if they put the time and effort, not boring, you keep driving around, not stuck at a location. Local knowledge improves due to driving around.
- What are the negatives job?
A: The company communication is bad, earnings model is rubbish and the income has reduced overtime for same amount of effort and working hours, compensation for your own investments such as fuel, vehicle, insurance is not good enough, physically demanding if you have to work for long periods. One could get stuck for longer time if you start without an earning limit. There is no such thing as progress, no promotions, no direction or goal to reach. Application is a mess, they made it worse overtime. No paid holidays, no insurances, you`re on your own. Parking issues for cars.
- What was your best experience while working?
A: A customer gave the wrong address and I offered to deliver to new address, he was very thankful and gave me €20 tip.
- What was your worst Experience?
A: Once I was invited to take part in a meeting by Wolt management and I explained many things that made our job easier during the work. However, later I found out they had used that information against us and updated their model.
- Would you recommend this job to someone? If yes what about in long-term?
A: I recommend this to students due to flexibility but I would not recommend it to full time earners because it can take too much of everything.
- Age group
A: 35-40
- Education Background
BBA (Bachelors in Business Administration) - Did you do any other kind of Job before?
A: Yes, Posti
Appendix 2: Wolt Interview (J)
- When did you start working with Wolt?
A: 2018 January
- How many hours do you work per week?
A: 45/ week
- How is the situation now compared to when you started?
A: It is worse now, less work less salary If you find work in my field, I will quit - Why did you start doing Wolt?
A: No time bound, freelancer, freedom and allowed me to give time to studies.
- What are the positives about the job?
A: Very good dealing with helpers from HQ, now time boundness, earn as much as you want, whenever you want. Mistakes are covered by the company and no
- What are the negatives job?
A: Negative: No routine, if you’re sick or on holiday, no coverage, no insurance, you`re on your own. If there is no work and you`re online, your time is wasted and no earning, especially in summer.
- What was your best experience while working?
A: Very good verbal feedback from a customer because food was delivered much earlier than expected and gave a tip and even Wolt acknowledged that and gave me a tiny bonus.
- What was your worst Experience?
A: I once reached the wrong address, and the resident took the food anyway, then actual customer obviously was not happy.
- Would you recommend this job to someone? If yes what about in long-term?
A: Recommend to students yes, due to freedom of work time. In long-term only if there are no other options.
- Age Group A: 25-30 - Education
A: BBA (Currently Studying)
- Did you any do other kind of job before?
A: Yes, I did cleaning
Appendix 3: Wolt Interview (M)
- When did you start working with Wolt?
A:
February 2017
- How many hours do you work per week?
A: 40+
- How is the situation now compared to when you started?
A: It was better in 2017 but it has become worse at this because of changes to earning models and increasing competition.
- Why did you start doing Wolt?
1. A: Easy, and freedom of time.
- What are the positives of the job:
Freedom, for 5 years it`s fine, you can manage but after that your expenses are balanced out, the support is very helpful, foreigners can use this to cover expenses very well. Good options for students, unlike taxis it doesn’t matter what mode of transport you have. Very few limitations from the company.
- What are the negatives of the job:
There is no constant amount of money made, no job guarantee as we are not employees, less money to be made when there's too many people working, unending employment as a delivery person, no insurance or other benefits at all.
- Worst experience:
A: Getting a parking ticket - Best experience:
A: Positive verbal feedback from customer.
- Would you recommend this job to someone? If yes what about in long-term?
A: I would highly recommend this work to students, immigrants and those people who do not want to be bound with working hours, in long term probably not since there is lack of
guarantee of work, and no career advancements.
- Age Group A: 25-30
- Education Backgdround
A: Masters Business Administration (MBA) - Did you any do other kind of job before?
A: Yes, I did Posti and cleaning, advertisements. Internship in Subway and sales &
marketing in a company.
Appendix 4: Foodora Interview (S)
- When did you start working with Foodora?
2 years
- How many hours do you work per week?
25 hours
- How is the situation now compared to when you started?
The situation has gotten worse for couriers due to the company becoming stronger in market, they have to increase profits, we have to work more for same amount of earnings, the company is
- Why did you start doing Foodora?
Part time income, there is good interaction and the work is not demanding, a bit of independence. One can choose their own working hours.
- What are the positives of the job?
They pay for fuel on extra distance. Mistakes are covered by the company. If the - What are the positives of the job?
Driving constantly, restaurants are a bit strange during Covid, work is a bit dangerous during Covid, you get shifts according to ratings and badge, safety, security law, parking issues.
- Worst experience:
Wolt support is better, Foodora does not compensate that easily. App is not that good.
Foodora`s orders are not given location based as closest. If one`s shifts are lost or there are issues with picking shifts, one loses there ranking. If the address is wrong, and one has to go to new address, there is no compensation.
- Best experience: -
- Would you recommend this job to someone? Why and why not?
Platform economy is unpredictable, the work style and the model is not good and
sustainable for long term in my opinion. Some people are okay with working. There is no security, no insurance, no paid leave, no sick leave. Most people use it as a student or other short-term source of income but it is not a long-term source of income. Policies keep
changing, the company`s profits and loss are unpredictable and therefore the company`s future is unpredictable. There is no constant source of income, it is a good secondary source of income for short term. If one has to travel or is sick it is not a good source of reliable income. One is sacrificing their rights that one gets as an employee.
- Age Group 35-40
- Education Background:
MBA
- Did you any do other kind of job before?
Cleaning.
Appendix 5: Foodora Interview (P)
- When did you start working with Foodora?
A: April 2020
- How many hours do you work per week?
15-20 hour
- How is the situation now compared to when you started?
Not valid
- Why did you start doing Foodora?
Needed it at as a secondary source of income, could not find work in field of specialization, so in the meantime.
- What are the positives of the job:
If you deliver 3, they will pay 15-16 euros and if there is no work at all then they will pay 9 euros per hour or for overall. The driving part is nice, especially in summer. The delivery area is not big, in Turku it is quite easy to navigate around and locations are easy to reach.
The equipment they give is useful and just enough to carry out the tasks. The training is quite satisfying before one starts working. Their management is quite strict and sometimes that’s a positive thing as they don`t allow couriers to exploit loopholes. The application is synced very well with the navigation app.
- What are the negatives of the job:
There are lots of bugs in the app, it hangs a lot. 9 euros per hour is not exactly enough.
There is no insurance, no paid holiday fees, no sick fees, one is a freelancer.
- Worst experience: Restaurant owner said there are 2 drop offs to one location, but system did not allow.
- Best experience: People are waiting sometimes outside to receive the order, and that`s a good thing especially when there is no parking outside.
- Would you recommend this job to someone? Why and why not?
I would recommend this to students, the job is simple, it is not a burden. Foodora does not offer enough hours so it would not be a considerable option for full time earners. Like I said in the beginning they give 25 hours of work per week
- Age Group 30-35
- Education Background
Masters in software engineering
- Did you any do other kind of job before?
