This is part two of a Re/code Special Series about the new instant gratification economy. In five days of stories, photos and videos, we are exploring the explosion of tech startups that cater to our every need and desire, on demand.
I’m tagging along with Instacart personal shopper Dave Banse as he fills an order at the Rainbow Grocery co-op in San Francisco, which includes searching the aisles high and low for mung-bean pasta.
“We have tens of thousands of SKUs,” explains our Rainbow escort with an apologetic grin, before disappearing to find someone who might know which shelf the pasta is on.
Banse, who is an independent contractor and one of more than 1,000 Instacart delivery people in 12 different cities, grew up in San Francisco and graduated from UC Santa Barbara in 2010. He was briefly sponsored as a skateboarder. He says he doesn’t really feel like getting a full-time job, because he likes taking breaks to skate and travel.
We collect the groceries, mung-bean pasta included, jump into Banse’s two-door BMW M3, and zoom up to the Castro neighborhood to drop them off, well before the hour of our delivery window is up.
Banse says he was able to lease his car with Instacart earnings and some savings. “I figure if I use my car all the time, I might as well enjoy it.” He’s paid by the order and the number of items, which adds up to about $30 per hour on weekends, and $25 an hour during the week.
With no branding on the car, the only sign that we are associated with Instacart is Banse’s bright-green company T-shirt.
The branded shirt is optional, but it helps get him better tips, he says.
Buying something and getting it delivered is not a new concept. But today, due to a rush of recently launched on-demand services, delivery is becoming modernized and mobilized. In many American cities, you can now get just about anything delivered, at the touch of a smartphone button, within an hour.
But it can be too easy to forget that people make “instant” happen. And, generally, these people are not a traditionally stable workforce. They are instead a flexible and scalable network of workers — “fractional employees” — that tap in and tap out as needed, and as suits them.
It’s estimated that more than 100,000 of these jobs have been created, especially due to the largest on-demand mobile services: The ride-sharing companies Uber and Lyft, whose drivers provide alternatives to taxis and other forms of transportation.
The Uber-style model works when a company can turn that kind of disparate workforce into a reliable branded service. It’s not quantum computing, but after you click “buy now,” it falls to someone to do the hard and sensitive work of moving physical stuff around in the real world.
Uber says it is creating 20,000 U.S. jobs per month by allowing drivers to tap into its ride-hailing service in their local cities by renting a phone from the company (it used to be free).
And so, at its core, you might think of the instant gratification economy as a story about jobs — new kinds of jobs. Here’s how it works: People like to get stuff when they want it. And, because of smartphones and smart logistics software, deliveries can happen much more cheaply and quickly, especially in cities.
So, the availability of on-demand services generates more demand. To meet it, companies bring on more workers. And ultimately, finding one of these jobs — or often, more than one of them — can create living wages for people who might otherwise be out of work.
But it’s not all shiny happy job creation. It’s not terribly uplifting to think that the future of labor is delivering stuff to rich people.
And more practically, many of these delivery gigs require people to already have their own bikes and cars. Startups tend to be flaky; they change strategies and structures unexpectedly. There’s also a strong risk they’ll go out of business.
But the insta-gig does appeal to many people, and they tell me so when I meet them doing their jobs in San Francisco.
There’s Deliv driver Joana Micuda, whose dream is to open a movie theater with 35mm projections of first-run films. She says she thinks of Deliv — which ferries online shopping purchases from stores at local malls instead of shipping them from warehouses across the country — as working retail without all the crap of being a salesperson.
Cacau, a mom of three kids under 4, drives her minivan for Lyft because it allows her to be home with her kids when she needs to be — no questions asked.
And Marcia Dos Santos, the recent-college-graduate daughter of a cab-driver-turned-Uber-driver, has brought people meals on Sprig, given out rides on UberX and delivered groceries for Instacart. Dos Santos is now working her way up within Sprig as a driver manager.
The smartphone is at the center of the sharing economy. Every company mentioned in this series on the instant gratification economy runs on worker smartphones. GPS, texting and mobile-app notifications are the ways to make flexible work actually work.
In many ways, six-year-old startup TaskRabbit is a precursor of the current movement. But the early offline-gig marketplace was behind the times on mobile logistics until recently. The company just updated a system that now algorithmically matches jobs with people who are qualified to perform them, rather than relying on an open-bid system.
Previously, many workers who had already been inducted into the TaskRabbit system spent hours scanning for jobs and building their own schedules. It was a waste of time, and it didn’t help customers get what they needed any quicker.
“Taskers” had to set up gigs primarily on their computers, because the iOS app “wasn’t fully functional,” admits TaskRabbit founder and CEO Leah Busque. And TaskRabbit didn’t have an Android app, even though that’s the platform the majority of taskers use.
That didn’t make sense, Busque says, because taskers are out running around all day on jobs. And while many tasks make sense to book in advance, making things mobile opens the opportunity for on-demand booking.
“I feel like we could have gotten to mobile sooner, for sure,” Busque says.
That wasn’t TaskRabbit’s only issue. It was early to the space, but lacked focus.
Early investor Craig Shapiro says he sometimes kicks himself in retrospect, because from the beginning, TaskRabbit was used for cleaning, home repairs, courier services, even rides across town. It could be perplexing to figure out what to use it for.
“TaskRabbit was the catch-all,” Shapiro says. “If you looked at the Top 10 tasks then, there are probably startups for [each of] those Top 10 tasks now.”
Even so, with 25,000 workers active on its site, TaskRabbit outsizes most every other service, so it’s important to check in on its progress. By contrast, the get-anything-delivered-in-an-hour service Postmates has 4,000 couriers. TaskRabbit reports that 10 percent of workers use the service as their full-time jobs.
But the revamp around algorithmic assignments has had its hiccups, including taskers who complained to Valleywag recently that their assignments have actually gone down — the opposite of what the company was going for.
(Reached for comment, a TaskRabbit rep disputes that charge, saying that the company’s active taskers are now getting four times more work opportunities than they were before the redesign.)
TaskRabbit workers are just the latest to call attention to their issues in the on-demand marketplace.
In the midst of price wars between the ride-hailing apps Uber and Lyft, one San Francisco driver complained to me, “I don’t want to be the butt-end of a VC fantasy, I want to make a living.”
Independent contractors at startups take on all the risk and pay all the self-employment taxes. There’s rarely a chance to build a career.
But that is starting to change at some of the young firms. More of them, like the meal delivery service Munchery, its competitor Sprig and the personal storage company MakeSpace, are bringing fractional workers on board part-time, and helping them upgrade to full-time.
For Munchery CEO Tri Tran, it’s a matter of ethics. “We have the mindset: These are real employees, we give them the same benefits, we treat them well. We give them credits so they actually eat the food that they deliver, so they have an authentic, intelligent answer when someone asks what to order.”
Meanwhile, MakeSpace is a company that ferries storage bins back and forth, on demand, from small New York apartments to a larger facility. “We are creating real jobs for real people, not white males who care about an ergonomic chair,” founder and CEO Sam Rosen tells me. “I like being in the class of blue-collar jobs.”
Rosen elaborated in a recent op-ed piece for Re/code that he thinks technology is helping to reverse the tide of jobs it is replacing, by connecting blue-collar workers — drivers, delivery people, housecleaners — into systems that help them efficiently find work.
Meanwhile, Postmates, which gets knocked a lot for low wages (delivery fees start at $4), has stepped up its efforts to protect contractors. In July, the company announced new benefits for its workers that include liability insurance for bikers, $50,000 coverage for medical expenses, and free OneMedical membership.
And TaskRabbit and Lyft have both partnered with AnyPerk to give workers discounts for childcare, gyms and entertainment, at a cost of $10 per worker per month.
It’s very common for people to pick up gigs from multiple services — in the morning, grab some grocery orders on Instacart; then when you get tired of lifting large bags, run a shift during Sprig’s prime lunch hours; then when you get lonely from ferrying around inanimate objects, sign into Lyft to interact with an actual person.
NYU business school professor Arun Sundararajan’s summer research project is counting the number of jobs created by the sharing economy. He doesn’t have an estimate yet, but he points out that the U.S. workforce is already 20 percent to 25 percent freelance.
Sundararajan says he sees a lot of good in the sharing economy. “It will lead people to entrepreneurship without the extreme risks.” He thinks of platforms like Uber as gateways. “It’s even easier than finding a full-time job, which is easier than freelance.”
Rafael Monterrosa has been a UPS driver for the past nine years, and he is concerned about the instant-gratification-oriented state of San Francisco. “I picture in my mind a big intersection with all these cars crashing into each other, all bringing someone’s toothpaste to them,” he says.
Monterrosa, 50, has lived in the city’s Noe Valley neighborhood since 1971. He doesn’t have a college education, and earlier in life he was a truck driver in the Marine Corps, and a cook at Red Robin. Last year, he made $80,000.
“It’s an old-fashioned company, and a good job,” he said. He likes it.
It’s a weekend morning, and we’re having coffee outside a neighborhood cafe near Monterrosa’s house. It turns out he’s a bit of a bridge between the tried-and-true ways and the new. He tells me he considers himself a tech lover, though he prefers Bing search and Apple Maps so he can avoid Google’s Skynet. He likes Leo Laporte’s podcasts, and would love to go see one of them being taped at the studio in the North Bay, but he doesn’t own a car.
Monterrosa says the large majority of deliveries on his route are from Amazon. He appreciates that online shopping has evened out the seasonality of delivery — in the old days, there were often layoffs after Christmas.
The one complaint he has about the job is he hates carrying people’s big boxes of toilet paper up their flights of stairs. It’s like … c’mon.
Monterrosa is not particularly worried about startups displacing his job. “Any startup thinks they’re way ahead of UPS as far as logistics, they’re not,” he said. “You want to be the next Uber, really? You want to be a company that doesn’t exist. UPS is based on assets.”
There’s more skepticism where that came from. “Self-driving cars? As far as delivery goes, you still need someone to carry something up the stairs.”
But Monterrosa admits that even though UPS tracks his trips down to every time he opens the truck door, the company doesn’t even provide its drivers with GPS navigation systems, or a phone with maps. It’s up to him to figure it out on his iPhone.
What Monterrosa doesn’t get is why I’m interested in what he does.
“To me, delivery seems like grunt work,” he says. “It’s real-life stuff, not tech stuff.”