2/17/2021 Coronavirus Brings Business—and Labor Strife—to Amazon and Instacart | Barron's

TECHNOLOGY

The Coronavirus Brought a Surge in

Business—and Labor Strife—to Amazon
and Instacart
By Evie Liu

Updated March 30, 2020 5:20 pm ET / Original March 30, 2020 5:02 pm ET

The Covid-19 pandemic has driven

up demand for online orders and
home delivery, but it also poses a
new challenge for online-retail
companies.

Their employees are demanding

more protection against the
coronavirus and higher
Photograph by Patrick T. Fallon/Bloomberg
compensation given the risky work
environment. If the tension persists, it could cut into the companies’ profit margins
and damage their public images.

Fulfillment and delivery workers have stayed on the job over the past few weeks,
while much of the country has been asked to stay home. Despite the sweeping
layoffs in other industries, many online-retail companies have announced plans to
hire tens of thousands of workers.

Some workers feel that their employers aren’t doing enough to keep them safe and
compensate them for the risks they are taking on.

At Amazon.com (ticker: AMZN), for example, workers in at least 13 warehouses

have been tested positive for Covid-19, forcing many of the facilities to temporarily
shut down for cleaning. Amazon says it has taken “extreme measures to keep
people safe,” tripling down on deep cleaning, procuring safety supplies, and
changing processes to keep workers at safe distances from one another.
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The company said it consults with health authorities and medical experts on how
to handle building closures for deep cleaning. The process evaluates where the
infected employee was in the building, for how long, how much time has passed
since they were on-site, and who they interacted with, among other items,
according to the company.

But not everyone is happy with those decisions. After one employee at Amazon’s
Staten Island fulfillment center was tested positive for coronavirus last week, a
group of employees at the facility walked off their jobs on Monday, demanding that
Amazon close the warehouse entirely for deep cleaning and maintain full pay for all
workers during the shutdown.

Christian Smalls, a process assistant at the facility and leader of the walkout, told
CNN that many more employees at the facility—as many as five to seven—have
tested positive for the virus than the company has publicly acknowledged. The
facility has become a “breeding grounds for this pandemic,” he said.

“These accusations are simply unfounded,” an Amazon spokesperson wrote in a

statement to Barron’s. “[...] We have heard a number of incorrect comments from
Christian Smalls, the hourly associate claiming to be the spokesperson on this
topic.”

The company said Smalls is alleging many “misleading things” and noted that he is
on a 14-day quarantine requested by Amazon with full pay–along with a group of
other employees that might have had close contact with the diagnosed individual.

Amazon didn’t answer the question whether it plans to shut down the Staten Island
warehouse or not, but noted the facility has recently implemented daily
temperature screenings.

Amazon has raised employee wages by $2 an hour through the end of April and
increased overtime compensation up to double pay from the previous rate of 1.5
times. The company noted that workers at the Staten Island facility are paid $23 per
hour, compared with $17.50 for many others.

Still, Smalls and his colleagues aren’t alone in their concerns over safety. A few
thousand Amazon employees have signed a petition, demanding hazard pay, child
care subsidies, relaxed productivity requirements, the closure of any facility with
infected employees, and expanded paid sick leave to all workers regardless of
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diagnosis, rather than limited to those who have tested positive or been placed on
mandatory self-quarantine.

Many employees have complained on the Internet that they can’t afford to take
unpaid leave before they can get official test results that would qualify them for
paid leave. Tests are hard to access across the country.

Workers at delivery startup Instacart also planned to go on strike on Monday,

asking the company to step up protection against health risks, offer better
compensation, and expand access to paid sick leave.

On Sunday, the company updated its safety measures, saying it would

manufacture hand sanitizer and distribute it to its shoppers within the next week,
and also launch a default feature in the app designed to help shoppers earn higher
tips. But the company didn’t update its paid-sick- leave policy.

The protesting shoppers and Gig Workers Collective, which is coordinating the
strike, weren’t satisfied. “Aside from simply not being enough, this is insulting for a
number of reasons,” the group wrote in a Sunday statement following Instacart’s
updates.

The shoppers said they had been asking for hand sanitizer for many weeks, but the
company did not act, while being fully capable of sourcing the sanitizer, until the
strike announcement. They also claim that the new tipping feature “provides no
meaningful benefit to shoppers,” and their request for hazard pay went completely
unaddressed.

“The average pay per order is well under $10,” a statement from the Collective said.
“Workers should not be risking their lives for pocket change.”

The Gig Workers Collective didn’t immediately respond to a request for comment.
Instacart didn’t answer an inquiry about whether the strike went ahead.

Instacart did say it respects shoppers’ feedback and will continue to make updates.
“Our goal is to offer a safe and flexible earnings opportunity to shoppers, while also
proactively taking the appropriate precautionary measures to operate safely,” the
company wrote in a statement.

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It’s not immediately clear how these strikes will end and whether companies will
make the changes that employees want. But tension between online-retail
companies and their staff is likely here to stay, especially if more workers are
diagnosed with Covid-19 as the pandemic worsens in the U.S.

Amazon stock was up 3.4% on Monday to trade at $1,964 per share. The S&P 500
rose by the same amount. Amazon shares have been holding up relatively well
amid the market selloff over the past few weeks. The price is up 6.3% year to date,
compared with the S&P 500’s 18.7% loss.

Write to Evie Liu at evie.liu@barrons.com

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