Uber Eats Classified as Employer by Geneva Administrative Court

According to a ruling by the Geneva Administrative Court, Uber Eats is classified as an employer and operates as a personnel leasing company. This means that Uber Eats must employ and compensate its couriers according to the collective labor agreement (CLA) for personnel leasing. The ruling is considered groundbreaking. However, one can also question how sensible it is to deliver ready-made food to homes and whether it can be made profitable.

By Andreas Müller

The ruling issued by the Geneva Administrative Court states that Uber Eats is considered a personnel leasing company and must accordingly compensate and employ its couriers. The union Unia celebrates this as a great success.

However, the ruling only addresses the labor law aspect of the home delivery model for ready-made food. While the delivery of groceries in large quantities to one’s doorstep may have its justification, the delivery of cooked meals is more questionable. Is food delivery a logistics service or merely an addition to the core business?

While the venerable “Corriere della Pizza” is an ancient story from Italy, the pizza itself is apparently an invention of the Etruscans and Greeks, later adopted by the Romans.

The first pizza delivery took place in 1889

Raffaele Esposito, owner of the famous establishment Pietro il Pizzaiolo (Naples), made the first pizza delivery to King Umberto and his wife Margherita in 1889. The queen particularly enjoyed the simple pizza with tomatoes, mozzarella, and fresh basil. Patriotically colored in the Italian national colors of red, white, and green, the “Pizza Margherita” was born and became one of the most ordered pizzas in the world.

Pizza delivered in a box to homes or offices is a customer service that meets all the requirements of a logistics service, even if it is not directly perceived as such. Pizzerias quickly realized that they could also offer wine and other ingredients, such as salad. However, pizza always remained the core business.

In the meantime, there are several providers that deliver all sorts of ready-made dishes. One can have a burger menu, costing around CHF 6.90, delivered for a delivery fee of CHF 2.90. And this raises the question of whether the food or the delivery is the focus. While the delivery for pizza couriers has always been a pure customer service, for companies like Uber Eats, delivery is the business.

However, the Geneva court ruling raises questions about how food delivery must be structured in the future. Where a pizzeria is the main business and delivery is a service, this will not be a problem. Often, these are family businesses, and the son, sister-in-law, cousin, or uncle delivers the pizzas in their spare time. The couriers usually belong to the family or the company. In the case of pure delivery services, they merely act as intermediaries between food producers and consumers. The couriers are mostly self-employed, doing this on the side. Whether it is profitable or not is irrelevant to the platforms. If these couriers now have to be employed, then this business model is at least called into question. It may no longer be profitable.

If delivery, not food, is the business model

If the focus of the business is on delivery rather than food, it naturally raises questions. One could already ask whether transporting a pizza is beneficial and whether a hot pizza from the oven in the restaurant tastes better than the lukewarm, rubbery mush from the box; this question can be asked even more so for all other dishes.

Can this guarantee utilization if one delivers food from various restaurants to different consumers? Are the restaurants all located nearby, and do the customers really live within a reasonable distance? And do I really have to employ the deliverer, or can I not leave it to them if they want to drive around delivering a burger for a compensation of perhaps CHF 1.00 to 1.50? Additionally, there is the packaging, which is elaborate to keep the food warm. Whether disposable or exchange boxes, the effort is still enormous.

Delivering food to seniors is standard

Senior care services have been offering such services for a longer time. The costs are correspondingly high, as food is delivered in boxes with dishes and cutlery, both of which are exchanged during the next delivery. For seniors who are not very mobile, this is a valuable service, especially since many no longer enjoy cooking for themselves. Here, the focus is not on delivery, but on customer service, in this case for those in need of care.

Due to the COVID-19 pandemic, such services have increased, but on the other hand, many have also realized that it can be enjoyable to shop for oneself and then cook. When time is tight during lunch, it still feels good to move a little, even if it’s just a walk to the nearest sandwich shop. Ultimately, as always and everywhere, the market will decide whether the service “Delivering Ready-Made Food” prevails.