Serving Workers In The Gig Economy

nick's bookUSV’s very own Nick Grossman has co-authored an ebook for O’Reilly Media called “Serving Workers In The Gig Economy” and you can get the ebook here.

This book came out of a year or more of research that Nick has done on this sector for USV. We’ve been thinking that there are investments to be made in this sector and although we haven’t made one yet, we continue to think that’s the case.

Nick and his co-author Elizabeth Woyke cover a lot of ground in a this book, but it’s a quick read at roughly 50 pages.

If you are interested in the future of work, the gig economy, union 2.0, and/or related issues, you should give it a read.



Comments (Archived):

  1. awaldstein

    Fan of Nick’s and student of the topic. Downloaded and cued for an upcoming plane ride.Got to give a shout out to you and the USV crew about the price. I have mixed thoughts on books that come from very successful VC orgs that carry the high end of market pricing for ebooks.On one hand I believe that everyone should get their share. On the other the real payback is in the funnel of deals and investments and $20+ Kindle books always feel like a stretch.

    1. William Mougayar

      That book was free, you know that? It was such a quick read, you might be done with it after 10 blocks of your UBER ride to the airport 😉

      1. awaldstein

        That was my point!

        1. William Mougayar

          Got it. But it was a 50-page teaser. I wonder if the 300 page sequel would be free too.

          1. awaldstein

            Good point.Pricing is a forgotten art. The great discussion the other day on negative gross margins flip side is the bottoms up discussion on the relationship of price to brand at the point of sale and how you truly build markets.

  2. William Mougayar

    I remember Nick’s post on that topic. It’s great to see how quickly a 50-page e-book can follow a great blog post.The question on my mind is whether these services will continue to be offered separately or will they be bundled by the UBERs, Lyft, Airbnb and other big gig companies?A new company not mentioned in that book is targeting UBER drivers that want to get paid faster. But Lyft already offers that via Stripe.Another dilemma is that gig workers are very cost conscious. An UBER driver recently complained to me about the $1 per ride surcharge that UBER charges him. That’s $240 per month, and he didn’t like that, whereas Lyft doesn’t charge it. So if these new services will start charging gig workers $2 per day for this or that, I wonder how they will process the ROIs in their heads.

    1. awaldstein

      You can look at the cycles of business by the success and failures of platforms leveraging their brands.Can Uber own the gig economy–not a chance. Can they own the transportation sector in any logical extension of the word–they already do.Price is not a dilemma it is just price. I wouldn’t invest in a service that differentiated themselves from Uber on that area, they will just get crushed. Would I invest in a service that offered only electric cars–no but i sure would choose one for every ride.

      1. William Mougayar

        UBER has so many options from their position of strength, but I like how Lyft is challenging them by “trying harder” and hitting them in their weaknesses.

        1. awaldstein

          Someone sent me an invite for an Uber conference call for later this week!Is Lyft really challenging them? Used to be there was always more than one player but honestly today in search, social, ecommerce, transportation–is there?Is there a second tier that can monitize itself to the value of the capital put into it?Is there really room for the normal person to have more than one transportation app on their front screen?Things like Etsy exists because social platforms like Facebook are by dynamics transactionless. The way to win is not to carve out these feature based differences but to build what they platforms and brands just can’t do at their fringes.Gym and some writing calls. Have a great one.

          1. William Mougayar

            Just saying what I’m hearing and experiencing. From 2 UBER drivers who also go on Lyft, from another person who recommended I try Lyft for a particular area where they were better than UBER, then talks about their customer service being better etc…Recently, I waited 25 minutes at SFO for an UBER driver who never showed-up, then I cancel and re-book, and UBER charges me their petty $5, and I had to waste another 20 minutes explaining to them what went wrong and showing them screenshots of my SMS with an un-responsive driver. There’s always a #2 and #3. Maybe this space is more like Hertz, AVIS, National, Budget, and less like Google and nobody else.

          2. LE

            I agree with you but keep in mind that in the case of Hertz, Avis, National, Budget (and Enterprise) [1] there is airport counter space that is whacked up. So the decision is made, what, by both loyalty programs perhaps for some travelers, but also when you go to rent a car all of the counters are close together (with that “cars available” sign) and you can easily see and check out the competition. With a ride sharing app (and I don’t use them so let me point that out) it’s more of a habit, isn’t it? I think that is a key difference. Not as easily (“only 1 on the home screen”) to try both. Brand loyalty also comes into play, what you are used to doing becomes your habit.Look at it this way. Every day people make decisions to buy things. If it’s easy to compare offerings they can usually end up making a decision between competitive products. [2] However if it’s more time consuming or difficult then all of the sudden they start to satisfice. That is they take the low hanging fruit decision unless there is some compelling reason not to.[1] Who made their mark by initially I believe doing insurance rentals?[2] Easy means “3 toaster ovens, all on the shelf next to each other”. Not easy means “3 toaster ovens, in different parts of the store or in different stores”. The reason many businesses are able to charge a premium is simply because of the friction of clearly knowing all of the competitive products and doing an evaluation in a time and cost effective way.

          3. William Mougayar

            Check this report on Lyft vs. UBER…

        2. LE

          Keep in mind that when you have boatloads of money there are things that you can do to ward off any barbarians that smaller competitors can’t. So while you can’t “cutoff their air supply” [1] you can make it hard to breath.For example Uber could do some kind of loyalty or customer reward program (goes to check to make sure they aren’t doing this already…) [2] or even perhaps a discount based on usage. That would absolutely incentivize people to stay on the platform even if they had some bad experiences. The only question is really how to structure the reward or discount to have the desired benefit and nominal profit impact.[1]…[2] They don’t.

          1. William Mougayar

            Yup, boatloads of lawyers & lobbyists too.

    2. The Rideshare Guy

      agree that workers are cost conscious but last point is not true.

      1. William Mougayar

        OK. What is closer to the truth on your opinion?

        1. The Rideshare Guy

          Uber used to charge $1, it now ranges from about $1 to $2 or so. Lyft’s fee has been/currently is $1.50. I have a full list/comparison by city on my site.…There isn’t much transparency when it comes to pay, etc for drivers and this is just one example. Uber charges a 20% commission right? Not quite…On a $4.65 minimum fare ride in LA, after Uber’s $1.65 safety fee and 20% ‘commission’ (up to 25% in some cities now), the driver gets $2.40 so barely more than 50% of the total fare. I can’t tell you how many people e-mail me pissed off about this…

          1. William Mougayar

            Hmm. My story was from a ride in SV about 3 weeks ago. The driver who uses both told me UBER charges him $1 per ride extra whereas Lyft doesn’t but he gets more calls from UBER, so he has to use them. I’m going to follow your blog, Harry. Thanks.

  3. reggiedog

    Disappointing to see that the authors swallowed the obvious red herring/self-serving narrative that Homejoy’s (and Zirtual’s) demise was due to worker classification. They had business model problems from the beginning.It is really hard in this world to figure things out when false narratives are so pervasive. But we (VC’s and entreprenuers) are story-telling animals. If we weren’t, the success rate of VC investments would be much higher (or generally closer to USV’s 😉

    1. Richard

      From my exoereicne, Homejoy had leadership/management issues.

  4. JimHirshfield

    The title reminds me of the Twilight Zone episode, To Serve Man……What’s for dinner?

    1. Anne Libby

      That’s what I’m talking about.

  5. sigmaalgebra

    Ah, taxi cabs and radio active decay!For Uber, okay, they saw a way to use smartphones to improve the process of hailing cabs. Then they got a lot of equity funding and used that to expand to nearly every medium to large city in the world and maybe more.Problems, MaybeBut, I wonder if Uber is actually making money? I’m not seeing a significant network effect, a “large network of engaged users”, or much of a barrier to entry. While they are in, at least, the US, Europe, and Asia, they still look like a local business: E.g., even if they are popular in NYC and Chicago, that doesn’t give them much advantage in Boston, Philadelphia, DC, St. Louis, Memphis, … LA, SF, Seattle, London, Paris, Rome, Moscow, etc. So, it looks like they are vulnerable to attack in any one city, e.g., maybe Boston, St. Louis, ….Yes, their brand name and whatever quality monitoring they do may let them do well for frequent fliers: They used Uber on their last trip, used Uber to get to the airport this trip, so will try Uber on this trip from airport to their hotel, but I wonder if that effect is significant. E.g., in the cab business, what is the fraction of customers who are frequent fliers on the way to/from an airport? My guess: Not enough to be important for Uber to be successful.If the Uber app is quite good, then likely other app software developers could duplicate or equal their app.Advantages, MaybeUber may get an advantage in economy of scale: So, have a network effect in a city, i.e., nearly all riders call Uber because they have the most cabs and, thus, can give the fastest service and because they have the most cabs they can do better cab dispatching where an Uber cab does less driving on the way to or from a ride. Maybe.But, from some of my background in vehicle scheduling and from a few months ago some communications with a guy at Uber about scheduling strategies, I wonder if Uber is much interested in that approach to economy of scale.Yes, there’s another approach to economy of scale — see below on the Poisson process.Struggle of a Gig WorkerHere’s maybe part of what is going on: Joe is in a town of 75,000 people and would like to drive a cab. But the town has only one cab company, and they pay their drivers poorly. So, Joe would like to be a cab company of only one, but for that he has a dispatching problem. The old solution was for him to have a wife at home who answered the phone from people who wanted a cab and to have a two way radio in his cab to communicate with his wife. Well, a smartphone can handle the role of the two way radio. Maybe Uber can handle the role of his wife in the dispatching.But, again, if Uber becomes nicely profitable but without a barrier to entry, then they will stand to get some competition, e.g., supply what Joe needs. Or maybe Joe will team up with three other guys in town so that they can be big enough to have a good brand name (and see below on the Poisson process) and software, use some software written to compete with Uber.Uber SummaryMaybe smartphones are terrific for cab users and drivers, but I’m not seeing where Uber is in line to make a lot of money. Spend a lot of money from equity now, yes. Make a lot of money, no.I never used cabs very much and haven’t been in one in years, know next to nothing about Uber or how they use a smartphone, and may be, am likely to be, missing some important points.On the Gig EconomyFor the gig economy otherwise, there can be Web sites, replacements for the old Yellow Pages, lists, indexes, recommendation systems, etc.The Poisson ProcessThere’s a long recognized, fundamental problem with a gig economy: Customers call for some work and mostly the customers act independently. Presto, bingo, with next to nothing more, from a result in stochastic processes called the renewal theorem, e.g., in W. Feller’s second volume, what the worker sees, say, each hour, is calls from customers arriving like a Poisson process. There, time until the next call has exponential distribution, with some rate, and is independent of all the past of the process. There’s an axiomatic derivation and a good treatment of the Poisson process in E. Cinlar’s book.Result: Commonly in practice, on average, (A) the customers get low response times or (B) the worker has a lot of idle time, or both of (A) and (B).Industrial Engineering and Queuing Theory 101So, can do better if have a bigger operation, that is, more workers and more customers. That way, say, from just some elementary work in queuing theory, can get on average both (A) faster response time for the customers and (B) less idle time for each of the workers. And, yes, that’s one reason why a solo cab driver will have a tough time and why, in a geographical area with sufficiently dense population, a cab company with 20 drivers can do much better for both the customers and the drivers (but still isn’t a good reason for Uber to make money). In a town with only 75,000 people, cab service stands to be poor for both the drivers, who have a lot of idle time, and riders, who have to wait a long time for a cab.There’s been plenty of work in industrial engineering, etc., on stochastic arrival processes and associated queuing theory, e.g., at Bel Labs and likely Western Electric. Various parts of the Internet have to be just awash in these effects.More PoissonThe classic, vanilla example of a Poisson process is clicks in a Geiger counter. So for some radioactive element with a half life of some years, the clicks in an hour will be quite close to the simple math. And, right, the sum of two independent Poisson processes is again a Poisson process so that clicks of a Geiger counter from several different radioactive elements, each with reasonably long half lives, will again be a Poisson process.The Poisson process is also the vanilla approach to when a Markov process changes state. Then have a Markov process subordinated to a Poisson process which once I used while in grad school with a part time job on some work for the US Navy’s SSBN fleet to estimate how long the SSBN fleet would last in a special, controversial, scenario of global nuclear war limited to sea! Ah, some of what was in the movie The Hunt for Red October was realistic!Physics question: The Poisson process and exponential distribution we see from radioactive decay and more in quantum mechanics in physics suggests that somehow nature has one very good random number generator going, and this suspicion lets us ask how the hack that generator works.Is this post long enough for an e-book! :-)!

    1. Michael Elling

      Yes.Having seen paging and cable and clec markets get built out in the 1990s, success in one market doesn’t always guarantee success in others. And further the growth masks deteriorating or poor fundamentals to begin with as you suggest. In a post on Taxis, Uber and Subway 2 months ago, I suggested 4 ways to fill the “pipes” better:1) plan ahead option: I’m going into a meeting from 12-2pm and want an Uber waiting at 2pm to take me to a 2:30 meeting. 2) buy bulk blocks of rides for a discount. As more and more heavy users do this, Uber can manage it’s algorithms to estimate typical usage. usage builds and maintains the “directory” of pathways for advanced planning.3) work with car rental companies or car owners (drivers or just sharers) to deliver car rentals directly to someone’s door for extended, personal use.4) Coordinate with Citibike and even provide mass transit alternatives which might be faster and cheaper than using Uber. I know this latter one sounds heretical and antithetical but it will actually increase usage and reliance on the service over time.Queuing theory (capacity planning) in general suggests that networks should collaborate and share resources. Knowing the true marginal cost to clear supply and demand ex ante is critical. But this internet is every man (silo) for himself and god against all.

  6. awaldstein

    If indeed the world is becoming a gig economy seems like the questions is how do gigs find giggsters if you will.Is Linked in passe and what will replace it?

    1. pointsnfigures

      Building relationships create the best gigs. Platforms that enable relationships to be built will be better than job boards. I was thinking about this earlier today. A lot of people think they can go to universities and simply mine the research there to find good companies. The reality is you probably need to build a relationship with the scientists and skirt the university process (tech transfer etc).

      1. awaldstein

        yup and maybe…Yup–no question.Maybe as this is a different type of data than our social platforms or certainly LI provides.Ran into someone that was doing a vertical around this (can’t say which one) and I wonder. On one level great idea. On the other, where does the community dynamic go.Great topic though.

      2. Matt Zagaja

        Almost all my consulting projects that I do come from Facebook. I got my current job because of Twitter. I am in a few slack teams that have “#jobs” channels. The LinkedIn/jobs board model is broken. Why?1. Job descriptions are not a great way to get a qualitative sense of job fit. Sometimes job descriptions are written hastily, or by people who do not know the field. Sometimes they list things and those are the minimum requirements, sometimes they list things and they are being aspirational. Usually if I have a connection into a job, besides asking for a referral, I will ask the person if they can give me a better sense of the thinking that went into the creation of the job posting so I can decide to spend time applying or not. If I don’t have an idea then I’ll just apply anyways if I’m interested.2. On twitter/slack/facebook if I’m friends or follow people i can get a better sense of what they’re thinking and talking about. This gives me a better idea of whether I’d want to work with those kinds of people and also what the project work would be like. If your software is on GitHub I know exactly what tools you’re using. Presumably this works the other way as well. Anyone can go to my GitHub and see I know Ruby on Rails and Meteor.js.

    2. laurie kalmanson

      i found someone to pressure wash my house on thumbtack

  7. pointsnfigures

    Was thinking USV made a few investments in what enables or could be gig economy companies: Hailo, Sidecar, Etsy (sort of because it’s an enabler of gig) Work Market, Skillshare, Dronebase, and Kitchensurfing

  8. Matt A. Myers

    At AVC’s 10th anniversary party in NYC (3 years ago now?) I had talked with Nick about my plans and ideas relating to the “gig economy” and how to support it.I’ll certainly get and read a copy of this. Will be interesting to see his and Elizabeth’s take on it or if it ventures away from my original thesis.

    1. Timothy Meade

      Was it really that long? I guess so, I’d only been dating my girlfriend a few months and we’re about to have our own 3-year aniversary. Facinating thread, so much I don’t know about retail or the hidden aspects of business.

  9. Anne Libby

    Got it, read it. Great start!It would be great to see more “user voice.”First, the so-called gig workers. You might want to know why someone like me, an owner of a one-woman business, would avoid participating on a platform. Like the plague.You might want to consider grey areas in the lived experience of being a 1099 employee. (Spoiler alert: it’s about scheduling as it relates to how work gets done. The example about “build me a fence,” vs. “come in from 8-5 every day and build a fence” is pretty clear. Much that we call work requires choices about process that are not so binary. )Second, employers. Where do they see themselves advantaged by having gig workers, and where do employees make sense? How do they/will they want to interact with workers who use these services? Will any employers refuse to participate, and/or fight against these services? What might that look like?(Finally, copy-editing note: .mobi to Kindle formatting is kind of funky, hard to read. A lot of text rendered as right aligned.)(And lol, I came back and edited a bunch of my own typos/unclear statements in this comment.)

    1. Matt A. Myers

      I’d love to chat with you about to hear your thoughts. Would you mind Skyping sometime with me?

  10. Pete Griffiths

    It’s the human equivalent of ‘microservices.’

  11. billyjoerob

    Heck, you can buy caredotcom in the stock market for about 1x revenues, and that’s the grandmama of gig-economy marketplaces and it dominates a valuable niche.

  12. daryn

    This is going to be a messy space to work in for the near future, but a hugely important one. Hope you find some great companies to get behind.

  13. Ben Bear

    Great job on this Nick and team! As a co-founder of one of the companies profiled in the report (, I found the breakdown of the 7 different aspects of the job being unbundled particularly useful. Having a clear framework will make things much less confusing for everyone, speeding up the space’s development in the process.

  14. The Rideshare Guy

    Interesting report on the unbundling of work. It’s somewhat amusing though to see just how out of touch most people are with the realities of actually being a worker in the on demand economy.I’ve never even heard of half the companies profiled in this report, yet the author makes it seem as if they are right around the corner, ready to save the day. I know just how hard it can be to reach drivers and I can tell you, most of these companies have a long ways to go.I do like a lot of the ideas and themes presented though and they sound great on the surface, but asking workers who are already getting by on razor thin margins to pay for it all is highly unlikely. Instead, I think the responsibility should clearly lie with the companies like Uber, Lyft, etc. to provide portable benefits, training and more.But my biggest question is why would a company like Uber, valued at a rumored $60-$70 billion ever push for a change like this that’s going to cost them money unless they’re forced to?Guess I’ll have to wait for the next e-book though to read about that one..

  15. Hingle McCringleberry

    great information i gained

  16. Michael Elling

    Such a shame that “gig” is used to describe work function and not bandwidth. It would be really great if we were in the “gig”abit economy.

  17. William Mougayar

    So, giving your email is a small price for free, no? it was really seamless. Email and name. It could have been worse. I won’t be surprised if they use these emails to promote a full version of a book, which would be OK with me. I’d like to know about it, if that’s their plan. I realize this isn’t a bread sampling….you don’t know if they sample because they are hungry or because they are interested 🙂

  18. LE

    I agree with almost all of your comment. I only say “almost all” because I want to reserve the right to change my testimony at any time should I find a nit.I can easily see a a formerly mediocre taxi company promoting it’s new self (accurately) as a reliable, honest, well-trained, clean, known, accountable, responsible local alternative to the opportunistic, brazen, law-evading unbundlers at Uber. Know your driver. Know your farmer. Know your baker. Know your coder.Exactly. A definite opportunity to stand out. And I also suspect that the competition from Uber will eventually cause any taxi company to get their shit together and provide better service. Isn’t that obvious? [1] Kind of like people typically quit smoking when they find out they have lung cancer.[1] When I was a kid I saw this in practice at the local lunch counter located near my Dad’s place. When they were the only place on the street, the fat lunch lady waitress, who had a lock on the business with all of the wholesalers in the district, was truly surly and ignored you (like a bartender ignores a short balding jewish guy trying to get his drink). Next thing a new place opens on the same street offering steak sandwiches, fast service, a smile and a thank you to boot! It didn’t take long until that bad attitude was completely wiped off the fat ladies face. Like overnight. I might have been 10 at the time who knows. Was a great lesson in human nature, complacency and motivation. Remember that to this day.

  19. ShanaC

    Sort of – some platofrms don’t check.That said they do screen in other ways for self similarity

  20. PhilipSugar

    The first thing you do if you want to commoditize something is unbundle it. We all hate cable and technology companies try and try to unbundle it.Why??? Because that is how they keep their prices up.But, I give them respect. If I want to watch Football highlights because I have been all over god’s green earth today: IAH, CLT, LGA, PHL, then I pay their bill.

  21. Michael Elling

    Horizontal scale with vertical completeness, not vertical integration. Demand is too diverse and capex/opex gets wasted in vertical integration models that serve narrow niches.

  22. awaldstein

    You are cranky my friend!What I hate is free when it means signing up for a limited trial offer that you need to cancel.Amazon is doing that alot with free downloads of books. To me this really sucks.

  23. LE

    No you are just not as smart as I am.You can just makeup a name and download.To wit (There is no Ben Magarki):…

  24. PhilipSugar Love their tag line “flicking a booger at spam”

  25. awaldstein

    Ahh….Whole Foods.On my mind alot lately.The matrix for the markets view of what whole foods is.

  26. LE

    Samplings? You mean standing at a table and letting people try the bread? Well make sure to be cranky and ornery. It’s great way to get people to try your product. Get ‘yer shit together.

  27. Richard

    At just 365 stores, the key to this space may be teaching the other 95% of stores to buy smarterIts not like WF has a great team, particularly at the store level.

  28. Matt Zagaja

    Went to Whole Foods for the first time a couple weeks ago. Cool place. It’s like an overpriced Stew Leonard’s without the maze. It seems easy to rack-up a bill if you do your regular shopping there but if you’re strategic you can actually get some good value out of it.

  29. awaldstein

    Amazing company and one of the great entrepreneurial ideas that shaped the marketplace.Big fan. Where the wellness market shops for certain. And a partner through an investment.

  30. LE

    Stew Leonard?Perhaps people wonder why I am such a cynic and skeptic. It’s because over time I have noticed patterns in behavior that I feel attempt to dupe one into thinking all is well when it is not.I went to Stew Leonards in the early 90’s when I was in CT and it appeared they had a good gig going on and you would have thought they were all wholesome and squeaky clean if you thought anything.Stew Leonards was one of the companies iirc that Inc. droned on about in the 80’s as being super fantastic in every way shape and form.Turns out not the case (October 1993):…To the world at large, Stew Leonard was the smiling face on posters at his Connecticut dairy store, the man who made sure customers got what they wanted and who sometimes roamed the aisles in a cow costume, giving them warm hugs.But court papers filed by the Government this week in Mr. Leonard’s $17.1 million tax-fraud case show that he played another role behind the scenes. As mastermind of the scheme, he directed his top managers to bundle stacks of cash into $10,000 piles and place them in a safe hidden in his office fireplace. He then carted the money off to the Caribbean stashed in suitcases or camouflaged as baby gifts. Mr. Leonard was sentenced on Wednesday to four years and four months in prison for his role in the fraud, which used an elaborate computer program to keep two sets of books, one listing Stew Leonard’s Dairy’s actual revenues and another, for the Internal Revenue Service, listing reduced revenues minus skimmed profits. Conspiracy and Betrayal

  31. ShanaC

    prices have been dropping at WF consistently. It is now one of the cheapest yet best places to get fish in nyc.

  32. awaldstein

    I can’t agree.Amazing org that is for the first time coming to grips with a somewhat changing market.They’ve won to date cause they’ve created a lot of regional and store authority–not to mention buying power–but economic climate is pushing a move towards regional control.That is the key dynamic they are going through.I’m a believer in them.

  33. JLM

    .Not even close.WF is an ATX homegrown company which has employees who are zealots and true believers — may be different where you live but here near the mother ship, they are very, very, very good.None of this suggests that they are not expensive or other things that may be fairly thrown through their windows — but employees?Some of the best ever. Well tattooed and thoroughly pierced, also.JLMwww.themusingsofthebigredca…

  34. Richard

    Ive spent a lot of time on the floor of whole foods (as a consumer) starting with the first in TX, from very mediocore prepared foods and team leaders who still eat fast food, ive never been impressed. The bar was pretty low (partuculalry in nyc ). Id give them a B-.As a vendor, watch your back

  35. LE

    Oh and of course I forgot about that it was featured in “In search of Excellence” a 1982 book that I read way back:Word of the sentencing quickly spread today to the store, which has been hailed as a model of retailing that is sensitive to customers’ desires. It was praised in the 1982 book “In Search of Excellence,” by the management experts Thomas J. Peters and Robert H. Waterman Jr. The store — which sells 10 million quarts of milk and 100 tons of cottage cheese a year — has long captivated adults with its free samples and bins brimming with produce, and has wowed children with its singing, mechanized farm animals and petting zoo.

  36. Matt Zagaja

    Never knew that story. Though I am cynical enough to believe that most companies I buy things from are probably engaging in some kind of behavior that I either disagree with or is illegal. Did some data analysis projects for a union that really opened my eyes to the kinds of things that lots of local and national businesses try to avoid costs and regulations on.

  37. PhilipSugar

    I love that people don’t know that. You know those are strange behaviors like Martha Stewart.

  38. awaldstein

    Always do.In NY we didn’t really have supermarkets before them–well a few like Fairway, D & D, Gourmet Garage but certainly not cross city.The answer to all of them is the Green Market and that is where the city shops.

  39. LE

    As a vendor, watch your backWith WF to me (with the little that I know I will admit) is that there is always a new guy chomping and creating that is ready to take your shelf space. Maybe not this month but it will happen. New products are being born everyday because of the ease of bringing things to market.One of the truisms in business is that if it’s easy for you to get a customer or distribution (in this case store shelf space) then it would be easy for someone else to take your place. So for example as I was explaining to my wife the other day when you first go out and cold call, the orders that you get (not in food but in selling to offices let’s say) are the pain and the ass customers (who nobody else wants or who don’t pay their bills) or the nice guys who will give anybody a try. But those same people also will take the call from the next guy who knocks as well. The hard to crack people (I am one of those types) puts up all sorts of barriers and generally once you are in it’s much more difficult to unseat you. Once again the potential opportunity is inverse to the effort.At the local Whole Foods clone god knows every week I see new products taking the place of old products. In just lox alone I have seen great turnover. And I buy the packaged lox (when I can’t get fresh cut) and had no problem with the brand that was on the shelf. Just another source came along and they thought “ok let’s give this brand a shot”.

  40. awaldstein

    The other thing Rich is that basically they have a monopoly.And other smaller chains like KIngs for example–margins are the same, need to demo the same but the demand for free fills at start higher and freakin set up charges!I simply won’t pay set up charges for accounts, No roi that makes any sense.

  41. awaldstein

    It is extremely hard to get your product into whole foods and amazingly difficult to get distribution in the perishable goods business.You stay on the shelf if your margin per facing inch warrants it.If you sell you stay.Distribution is distribution.The idea that it is hard cause it is easy to compete is not correct.

  42. Richard

    I know food. i dont think that they are expensive, what i am pointing out is that there value and values arent enough to keep competition at bay. Ask the supplements team how much training they have? Ask the grocery team leader if they know why avacado oil is good for you vs soy oil?

  43. LE

    At the local WF in the past it used to annoy me that they reserved the spaces right next to the store for the employees. With signs. Not because I wanted to park there (I park far away not near any cars) but because it just seemed like stupid platitudes of manipulation. Makes no sense to have employees take up close spaces instead of your mom (when your mom doesn’t have a bogus handicapped tag). They actually got rid of that and the employees park in the back like they should now. But it was there for some time.The local starbucks otoh has employees taking up the front spaces with reckless abandon. I actually complained about that (for the benefit of, um, others of course, not me) because I just thought it was stupid to not monitor behavior and be clueless like that. The problem went away and then predictably came back. Same with the sidewalk which is messy and never steam cleaned. Nobody notices apparently. Not even the other stores in the small upscale strip. Other management issues come up from time to time at this particular Starbucks and to me it just shows poor management oversight.

  44. LE

    which has employees who are zealots and true believersYeah they are good at filtering and hiring people that somehow believe they are doing something other than working at a supermarket. A nice supermarket with perhaps a little better pay but still a supermarket. My guess is you can earn 2 to 2.5 times the amount hauling trash in NYC with overtime.Of course money isn’t everything that’s obvious but it’s kind of funny how people will assign a great prestige and brain candy to a particular low end job when they work for a known brand. Which raises an interesting question. If you had a chance to earn $x as a checkout clerk for Whole Foods vs. 1.2$x doing the same job for Walmart (where you had to stare at Walmart Customers under fluorescent lights all day) and assuming benefits were equal what would you choose to do?Whole Foods: Says 40k Average.…NYC Sanitation: Close to 70k after 5 years of employment. And that’s without overtime which my guess is quite possible and likely. That probably pushes (I have heard) pay close to 100k.

  45. Dave Pinsen

    If you’re not a natural wine connoisseur like our friend Arnold, WF’s Three Wishes wine is a steal ($3 per bottle locally).

  46. Richard

    Its not about being professional. Its about knowing the details of your craft. Whats in their hot bar today? How many of their options are made with canola oil? How many are fried? How many organic?

  47. awaldstein

    Layoffs are a challenge for certain.We’ve been asked to present to North Atlantic and deciding whether to or not.

  48. awaldstein

    Store by store it changes. Also is dependent on both the knowledge and the power of the Forager who sources 3rd party brands.NE Forager is a force of nature and extremely knoweldgeable and dedicated to her brands.

  49. awaldstein

    With WF where there are many people with authority and very few in charge–team in an interesting definition, it is very much like enterprise sales.You need to put in the time to know the people, get access their portal and use their numbers to talk to them AND make their life’s easier.

  50. ShanaC

    they also are a huge brnading play – for many small “natural” brands they can basically make a market for the products, and they definitely support them bringing to market, much more so than other supermarkets (or so what I have heard on the street)

  51. LE

    Funnier than the guy who normally jokes here. Love your dry humor as always.You need to bring that guitar and play while you are handing out the bread.

  52. LE

    Not only smart but honest as well. [1][1] After your comment it was more of a challenge to beat the system and not comply in some way. My first thought was simply to put in a bogus gmail that I use for things like this. After your comment I decide to just try a random address.

  53. Richard

    If you believe in the new economy the gig economy and the artisan food maker then you will see that whole foods along with it main distributor uNFI do more to prevent more foods and more of a diverse selection of foods from making their way from d the independent startup food manufacturer to the tables of the community to which they are meant to serve

  54. awaldstein

    Hmmm…Are you suggesting that WF will change its charter to bring in a smaller selection of artisanal products and switch the balance of store brand to third party brand on the shelf?I think they are too smart for that.Why would they do this unless they want to alienate the high end wellness shopper?

  55. Richard

    You are missing the point (whole Foods is far from a wellnessmarket) , my point is that there are thousands of wellness products and foods that will never see the shelves of Whole Foods or the trucks of uNFI because of their artisinal Small scale.and as you have pointed out in previous post, The xx basis points that go to a broker / distributor and the 20 basis points that go to uNFI make it prohibitively expensive for these artisanal food makers to get any retail traction.head over to the next Fancy Food Show at the Javits Center or the natural food Expo East and see and here from the startup alley

  56. Richard

    Eaiest way is to shop in the store every day

  57. awaldstein

    LEThere is only a percentage of check out clerks at whole foods who do only that.Many of the people at the registers at any time are team members doing a variety of service tasks who part of what they do is that. Constantly cycling in and out.Comparing that to a garbage picker is a bit crazy!

  58. Dave Pinsen

    Not really fair to compare a unionized city job with a retail job today, but it’s worth noting a lot of supermarkets used to be unionized. I worked at one in high school. Full timers had pensions and everything.

  59. awaldstein

    You are right and you know this business well. I’m sure better than I.

  60. LE

    No I was deliberately choosing a ridiculous example by picking “garbage man”.With respect to “respect” that is a double edge sword. Many people (at least in the past) would work at a bank branch for example because they felt that it was some kind of a prestigious job. So instead of working for you (for greater pay) at your production facility in one of the boroughs on a gritty street with an ad hoc office they would rather work at a shiny bank branch and think that they are important because they have a title of “branch manager” or “vice president”. [1]WF employees are great compared to what I would call the average person doing that type of job. Ditto for Starbucks barristas vs. someone doing same job at, say, Dunkin Donuts. But in the end it kind of reminds me in a way of someone who is behind the podium at a top end restaurant. I mean great. Better than a shitty or average restaurant but in the end you are just standing there and checking in reservations you are not part of the class of people that you are serving.How many WF employees can afford to shop at WFs like you or I might? A piece of Chilean Sea Bass is what $18? That is more than an hours pay (more when you figure in taxes obviously). Ditto for Starbucks. I must spend close to $1200 there per year. That is what 2 weeks work for a Starbucks employee?Btw, trash picker ranks above toll taker (the ones that are left that is).[1] I noticed when I was younger how the people who worked at office buildings in “Center City” were different than the people who worked in the wholesale district. They would take less pay in order to work in a nice clean environment. In a shiny law office for example. They would never consider a crappy office on, say, the lower east side. My point is how much does that matter? Perhaps the opportunity to learn from the business owner on the LES (or any cities equivalent) is actually much greater even though the floors haven’t been washed in 30 years.

  61. Richard

    Thats not accurate

  62. sigmaalgebra

    Arnold,Ah, since we’re talking foods, and LE, wines, since it’s the weekend, and you’re in the house, time for me to ask:With dinner I had some ChileanConcho Y’ Toro, Frontera, Cabernet Sauvignon Merlot 2010.Some years ago I bought a case of 1.5 l bottles, and they have been on their sides in the basement since then.The color was dark. Sure, it seemed reasonably dry but not like “licking dust off window panes”. After 30 minutes in the glass, the flavor was good: Didn’t seem highly acidic and instead softer. But there wasn’t much in bouquet. Curiously, there is some sediment! No, I didn’t decant it!I’m no good describing wines in words!I liked that Chilean wine with dinner, with a tomato sauce I stirred up — virgin olive oil, onion, garlic, salt, pepper, bay leaf, oregano, basil, parsley, tomato paste, red wine, canned, peeled, tomatoes, canned crushed tomatoes (I liked it!) — but that Chilean wine wasn’t much like anything else, not likeChianti, Badia di Morrona I Sodi del Paretaio(which actually I like, more than the Chilean effort) but certainly not like anything from the Haut-Médoc, Côte-d’Or (e.g., Pommard, Nuit St. George, Chambertin), or Châteauneuf-du-Pape.I’ve never had any Merlot by itself; I hear that it is good as a wine easy to like. So, maybe the Chilean growers mixed in some Merlot to soften what from Cabernet can be some astoundingly flavorful wines of Haut-Médoc?Can you explain what I seem to have encountered in that Chilean blend? Is there something known that the Chilean growers shooting for? As I happened to notice in some old records, that Chilean wine was surprisingly inexpensive; maybe I didn’t get nearly the best of Chile? Does any of the Chilean Cabernet compare with good CA Cabernets or the Haut-Médoc? Maybe the Chilean growers are trying for something like Saint-Émilion?

  63. LE

    the new birth of the instore cold pressed juice brand built out of expiring produce.Great idea. But Geez I hope there is a better thing to call that.Maybe “classic cold pressed juice” with an asterisk * [1][1] * = “made out of mature term produce”

  64. awaldstein

    Whole Foods employee shop at a discount.The mark ups at WF are not at all higher than a normal chain the quality is and that costs.andNo one within reach of a farmers market (everyone in NYC that is) buys anything at a super market that they can buy at a green market–including fish or meat.By definition better and cheaper.

  65. awaldstein

    I will and i take your comments to heart.Haven’t yet spent much time at the shows.BTW–WF is not the major revenue line for Luli and neither that nor distribution will ever be the major contributor of margin dollars.If it can be managed!!!

  66. Lawrence Brass

    Hi Sigma. You asked Arnold but let me into into the conversation to give you a few clues and try to answer the question. I am a red wine enthusiast not a wine expert but I am a chilean, so I know a thing or two about chilean wine. In Chile the price and quality of red (and white) wine produce spans an incredible distance between the lower priced to the higher priced bottles. I often hear from people in the US and the UK that chilean wines are considered a cheap and good quality alternative when buying. When I hear this I always ask about their favorite brand, name, wine stray and average price, to check and try to correlate with the wines I like and know. What I have found is that chilean wine that gets to the world markets, is not the best chilean wine nor the cheapest. There are mainly wines tuned for international taste and in the exact quality/price range, not the same versions we get in Chile for local consumption. This is changing though, big wineries as Concha y Toro are aiming at more sophisticated market segments without leaving the segments where they have already succeeded, and starting to offer the real chilean wines.About your question, the main wine strays in production in Chile were introduced during the 19th century. During the bloom of chilean wine exports during the 90s some “lost” wine strays were rediscovered. One of those lost wine strays was Carménère, and it was not really lost, in fact it was confused with Merlot and planted or mixed together for more than century. A theory is that this mixing could have produced slight variations in both Carménère and Merlot wine strays, which have been reintroduced and even exported. Scientific proof of this would require a lot of careful sampling and a genetic map of the current and originating wine strays, I don’t know if such a thing exists. So, the Merlot you had might be this natural blend with Carménère. Or perhaps just a preserved for most than a century Merlot wine stray. The beauty of wine is that every bottle is really different, the nuances depending on many variables: the genetic variations we were talking about, climate variations from year to year, rainfall, the oenologist in charge.Had a really nice Napa Valley cabernet sauvignon yesterday, don’t remember the winery, it was on the list on the menu at Porter House restaurant in NY, perfect company for an excellent piece of beef to celebrate. As California climate is very similar to Chile central zone, I thought that the wine could be similar too, but not. It was softer that chilean cabernet sauvignons, which are thick and dark like red ink. Wine talk is endless…Cheers.

  67. awaldstein

    @lawrencebrass:disqus knows more than I do.I encourage you to look at these things is less general stokes.What we get here from Chile and what we get from let’s say Marsala or Puglia are driven by the market and are true to a degree.It’s easy to make generalities about climate, grape and culture. They are true to some degree but be careful to stylize the region. In every one there are people doing things differently. Uniquely.What I like is that you are asking questions with your head and your palate both.With that you have a lifetime of exploration ahead of you.Read my wine blog some time for a different view of wine as a lens into culture and a connector to a broader community of change.

  68. sigmaalgebra

    Thanks Arnold! I encourage you to look at these things is less general stokes. Yup! Guilty as charged! Last night after I asked my question, on the Internet I saw a map of Chile and its Central Valley: It’s huge! And from Lawrence Brass as you suggested and he nicely posted also, Chile has been growing wine in their Central Valley back to the 19th century, at least. So, that’s a lot space for growing wine and a lot of time to get good at it.So, from one wine I was trying for a general stroke over 100+ years in a huge area, not promising!And thanks for sending me to Lawrence Brass — good direction!

  69. sigmaalgebra

    Thanks Lawrence!Okay, grape variety Carménère! I had to look it up and found…So, the Wikipedia picture has that grape as a gorgeous dark red. Also sure, it is the species Vitis vinifera.Yes, the origin is Bordeaux: Along with Cabernet Sauvignon, Cabernet Franc, Merlot, Malbec and Petit Verdot, Carménère is considered part of the original six red grapes of Bordeaux, France. Gee, I hadn’t known that!So, broadly, thatConcho Y’ Toro, Frontera, Cabernet Sauvignon Merlot 2010.I had last night, seems intended to be something at least started in Bordeaux.There in Chile, they have been at this wine growing thing for a long time and have gotten good at it. So, for the wine I had, it likely was not just some recent effort by some amateurs and, instead, was from some darned good wine making.As Arnold said, that wine was “driven by the market and … true to a degree”, and as you explained was made “for the international market”: So, the Chilean wine makers aimed at a target and were good enough as wine makers to hit that target — wine easy to like, nice flavors, not too acidic (good with or without food), and ready to drink.So, don’t have to store it in a wine cellar for 20 years before drinking it.Looks like perfectly made wine and easy to enjoy as I did last night.But wine making in Chile has lots of good land, lots of good expertise, some of the world’s best grape varieties, at least from Bordeaux, and can hit a target with perfectly made wine. So, no doubt the Chilean wine makers could hit other targets! I suspect so.Looks like I should go to my wine store and ask for something red, with body, complexity, acidity, bouquet from the Central Valley of Chile. And, gee, I have some scallops in the freezer — should also ask for a white wine from Chile, dry, delicate flavors, some acid?Now I know that the Chilean wine makers have terrific land and grapes, know very well just what they are doing, and are shipping some good to great wines at bargain prices. A lot to like!Thanks!

  70. LE

    Early on I identified how this type of thing happens. Nobody starts off doing massive fraud. They start off doing little things, build a tolerance (“nothing has happened”) and then increase the risk. So at one point it’s demininis and they are under the radar. (And also at the “slap on the wrist” or minor penalty phase). Latter they advance to full blow “worth the while to prosecute fraud”. Because the additional fraud is only incremental in their brain.So the only way to not go down that road is to pretty much never start or if you have some will power (like with drinking I guess) know your limits and call it quits. Pigs get fat, hogs get slaughtered.So for example if I go to Delaware and buy an Apple computer and don’t pay sales tax on it, ok 1 computer no big deal. But if I then buy more computers and start to send employees down then it’s a different story. (First there is “loose lips sink ships” and 2nd the crime is much larger). This is stuff they don’t teach in school. They might teach ethics but they don’t tie it into the psychology of weakness.I had a case recently where I used the same contractor to do work at my house and at a rental property. Would have been super easy to get the invoices so I could run the majority of the work through the business entity. Was actually pretty tempting since I was fairly certain it would never be caught and I would save a ton of money that way. Didn’t do it. Ditto for trying to write off my wife’s new car for business purposes which in a stretch I could have done (I could have said it’s used to check on rental properties..)

  71. Lawrence Brass

    My pleasure. As I said, I am not a wine expert just a red wine enthusiast. I even have red wine when etiquette dictates the contrary. I enjoy your posts and was just trying to give back and wave the chilean flag a bit. I have just realized that I used ‘wine stray’ instead of wine or grape ‘variety’ througout the post. I was trying to express/translate ‘cepa’ from Spanish.As Arnold points out there are unique efforts and creations going on. This is happening mainly in smaller boutique and family wineries that are targeting more sophisticated markets and that are building upon the Chile brand that the bigger wineries as Concha y Toro have championed.@awaldstein: Thanks for the reference. This evening I will look for your wine blog.

  72. Michael Elling

    Alert: Pathmark is closing and WF is coming to Harlem. We’re on the upswing! Parking lot at Fairway under WSH will have lots of empty spots!