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Blog - 22.02.2021 klo 08.24

Wolt, the exploiter or Robin Hood?

Photo: PAM's archives/Lassi Kaaria

The media reported a couple of weeks ago that the Finnish platform company Wolt has received a record capital financing of 400 million euros.

The money is to be used to expand Wolt's services to sectors other than the transportation of restaurant food. It is clear that this news was received in the media with joy, after all, it is a historical event in Finnish business history. Particular praise is given to Wolt’s business model, which allows immigrants without language skills to find themselves a low-threshold job. Everyone wins, or do they win?

Based on the messages that came to PAM, Wolt also leads and divides the work in practice.

Wolt does not directly provide jobs in food courier positions. The couriers are partners, “partners,” who, however, depend on assignments from Wolt. Sure, you can work on other platforms as well, but it may drop you into a lower category for your partnership. Based on the messages that came to PAM, Wolt also leads and divides the work in practice. Shifts are distributed to those who have been most active and the phone may be contacted if they do not receive the gig often enough during the shift. The company has so far justified its model on the grounds that it is flexible and that the employment relationship would stiffen operations. Food couriers appreciate being able to independently choose their own working hours and locations. This argument is in conflict with how the work is managed, however.

The issue of employer status has been addressed with the authorities. The Labor Council is a special authority working under the Ministry of Labor, which last autumn, at the request of the Regional State Administrative Agency, took a position on whether the food courier's work should be subject to the Working Hours Act and whether this is an employment relationship. The answer was unequivocal: yes hold and the food couriers are actually employed. The Regional State Administrative Agency gave Wolt and Foodoora (who were the subject of the statements) half a year to bring their activities into line with the decision of the Works Council. The time expires in May. The decision can be appealed to the administrative court and in PAM we consider it quite certain that this will happen.

In the platform company's business model, the financial result is made in two ways: by taking a share of the restaurant's margin and by making the courier service as affordable as possible. For the latter, the work is done almost purely as human labor, so somehow it has to be made cheaper. The share of ancillary work costs for the employer is less than one third of the gross salary. When this saving is repeated for thousands of couriers, the savings obtained are quite significant. The portion paid by the restaurants is, of course, a trade secret, but we estimate it to be about 20-30% of the sale price of the food. This is much the case in the low-margin business, and we predict that larger players in the restaurant and retail sector in particular are already considering setting up a similar service of their own.

"Light entrepreneurship exists only in advertising, for the Finnish system only knows entrepreneurship and paid employment."

So what is the consumer's responsibility or is it at all? Everyone can think in their minds whether they would be ready for the same as food couriers are: being an entrepreneur, but at the same time tied to the practices that the commissioning company dictates. Light entrepreneurship does not exist except in advertisements, as the Finnish system only knows entrepreneurship and paid work. As an entrepreneur, you take care of and pay all your obligations yourself. Would you be willing to drop a third of your income but continue in the same job as an entrepreneur?

Afterword: Wolt is not the only company operating under this business model and is not intended to accuse them of exploiting the weakness of the legislation. Similar companies include e.g. Foodora, Uber, Deliveroo and Freska. The legislation should be revised so that it is no longer possible to disguise the employment relationship. I wish platform companies the best of luck, on a sound basis.

uutisen-teksti: Ismo Kokko, Collective Bargaining Manager at PAM