Line Cooks, On Demand

December 12, 2019 Admin 0 Comments

Are hiring apps like Pared and Instawork the answer to restaurant staffing shortages?

Richard Thomas, the manager of a Halal Guys location in Uptown Oakland, says that a certain new technology is so important to his operation that he threatened to quit when his director of operations suggested slashing local budgets for the service to cut labor expenses. “Myself and several of the other general managers said, ‘No — if you do that, we will leave,’” Thomas says. “We’ll be the first ones out, because morale is going to plummet.” Thomas says that he uses the online app Pared seven nights a week to find dishwashers, which allows his staff to focus on their designated stations. “People are hired here to be a team member to serve, or to be a crew leader, or [to] be a cashier or a cook, and the last thing they want is to go back there and wash dishes,” he says.

In a sea change primarily occurring behind closed doors, restaurants across the San Francisco Bay Area are being staffed by gig-economy workers performing a range of on-demand tasks at the push of a button: cooking, serving, dishwashing, and even oyster shucking. Restaurateurs like Thomas say companies such as Pared, a hiring platform that connects hospitality businesses with temporary workers, are critical in keeping labor costs low in a sector with razor-thin margins and help ameliorate the shortage of hospitality industry workers.

It’s a seemingly simple process: Workers, so-called “Pared Pros,” download the app, create a personal profile, input relevant work history, and upload employer references. Pared can then approve the Pro, which allows that individual to sign up for shift-based gigs with a click of a button, months, weeks, or hours in advance. Restaurants, too, can post requests for workers instantly by inputting their location, a shift’s start time, and the position that needs filling.

The user experience for both Pared and Instawork is similar to that of ride-hailing platforms. While Uber and Lyft connect a driver with a rider for a particular trip, Pared and Instawork connect a business with a worker for a specific shift. With Pared, businesses can schedule a shift weeks and even months in advance, for which Pared collects a $5 fixed liaising fee. If the shift is scheduled for the same day or the next day, Pared’s fee is $10. Rates for Pros start at $17.95 per hour, and rise as a shift gets closer, which can result in per-hour earnings of $30 or more (think surge pricing for an Uber or Lyft). On average, Pared says that its Pros earn $20 per hour, roughly $5 more than San Francisco’s minimum wage, which currently hovers at $15.59.

To sign up for the app, workers must upload references as well as a resume that includes nine to 12 months of hospitality experience. Doing so allows Pros to flag their experience, and companies, in turn, are willing to pay more, says Pared CEO Will Pacio. In addition to netting temporary workers higher wages, some restaurateurs say that hiring apps are a much-needed tool. “It’s great as a last-minute option, or even if we’re short staffed,” says Cynthia Tran, general manager of Tratto, a modern Italian trattoria in downtown San Francisco. “The chefs use [Instawork] quite often for a dishwashing position. If someone leaves unannounced and the next couple days we don’t have coverage, and we haven’t hired anyone, we just put a gig out.”

But others in the hospitality industry aren’t convinced, and say that apps like Pared and its competitor, Instawork, actually siphon off workers from an already shallow pool of full-time candidates. In their opinion, giggers, who lack the benefits of regular employees, stand to lose, too.

Pared CEO Pacio believes Pared’s vetting function creates a win-win for giggers and businesses. “We see ourselves as a professional network, a LinkedIn for this industry,” he says. It’s a network that Pacio adds is expanding from an original core of fine dining clients to a far wider range of businesses with a common need for culinary assistance. “We’re working with McDonalds, we’re working with corporate cafeterias, we’re working with even retirement homes, because they have to serve food,” he says. And although Pared is focused on its East Coast expansion (launching in D.C. and Philadelphia in the past few weeks), additional California markets are still in the picture. “It’s always on our roadmap,” Pacio says of moving into other parts of the state.

The Bay Area restaurateurs that use Pared claim that these hiring apps play a key role in navigating a regional staffing shortage, attributable in part to wages that are not keeping pace with living costs. Mat Schuster, co-owner and executive chef of Canela Bistro & Wine Bar, in San Francisco’s Castro neighborhood, uses Pared and Instawork to find dishwashers, line cooks, and bussers. “If [the apps] were to go away, for me, it would make my business critically harder to do,” he says. “Because it’s not like by them going away, housing gets cheaper.” According to Schuster, the city’s labor shortage is so severe that restaurants could close without the support of hiring apps.

While the quality of giggers can vary, Schuster says, temporary workers provide a stop-gap if an employee calls in sick or doesn’t show up for work. Prior to Pared and Instawork, a staff absence would mean pushing his existing employees to cover, risking a decline in morale. “Even by them seeing that extra person in there, it takes away that stress of being understaffed,” Schuster explains.

Not all restaurateurs see hospitality industry hiring apps as a silver bullet for staffing shortages, and some believe they may even aggravate labor scarcity. “There are some restaurants that do feel it is taking from their pool,” Schuster says. But in Schuster’s view, the kinds of individuals who are attracted to gigging don’t necessarily value the stability that accompanies full-time work at a single restaurant. “They want to be able to take three weeks off and go to South America, without giving notice,” he says. “Or maybe they want to see how 10 different restaurants operate 10 different shifts.”

Marie Holvick, an employment law specialist and partner at Gordon & Rees Scully Mansukhani, agrees that apps like Pared provide a crucial source of on-demand labor; still, she admits there are downsides, which she hears from clients in the restaurant industry. “People can abuse the paid sick leave in order to go work a gig, and then get paid twice that night,” she says.

Flexibility, too, sometimes translates to a lack of reliability. “I’m just afraid that they are not going to show up,” chef and caterer Kitiya Ditpare tells me. “That’s always my fear.” After working as a tax planner, Ditpare left behind a decade of corporate experience to found Taco Thai, a catering business inspired by her family’s Thai home cooking. As a new business owner without employees, Ditpare says that she sometimes uses Pared to fill temporary staffing needs.

Ditpare’s concern stems from experience — she was jilted by a Pared Pro while working her first-ever food festival, Thai New Year San Francisco. Prior to the event, Ditpare posted a request through Pared for a prep cook who could help her prepare for the event and run her booth. When the Pro didn’t show, despite accepting Ditpare’s request, she called Pared to ask for backup; there wasn’t a standby, she says. Thankfully, Ditpare was able to enlist help from a festival attendee and colleague she knew through La Cocina, a San Francisco-based kitchen incubator. “If they were not there, then I would be in very big trouble,” Ditpare explains. “It affects my business because I can’t run it effectively without a helper.”

Despite her criticisms, though, Ditpare says she will continue to use Pared. She can’t justify employing someone full time, as some weeks are busier than others. According to Ditpare, looking for temporary help through Pared is her best alternative to a permanent hire, even if it means depending on someone who is less reliable (she adds that Pared offered her next shift free to compensate for the worker’s absence in April). “It’s an okay short-term solution, and it’s good for people who are starting their business,” she says.

David Barzelay, executive chef of the two-Michelin-starred Lazy Bear, seems to share that view. While hiring apps can be a valuable makeshift, he says, there are structural limitations that prevent restaurateurs from relying on them exclusively. If a gig worker bails on a shift, Barzelay explains, there’s no time to utilize traditional (some say old-school) options for finding someone to fill in, such as reaching out to friends or former employees. “So with a position like a dishwasher, or a polisher, in a restaurant like ours, we’re large enough that we can reasonably absorb being one person down, two people down, even three people down, without it completely killing us for a night,” Barzelay says. “But we’re in the minority on that — in most places, that really, really hurts.”

Lazy Bear was an early adopter of Pared to find dishwashers and polishers (not cooks, Barzelay clarifies) when regular team members went on vacation or missed a shift. And though Barzelay says he doesn’t use the app as frequently these days, he’s been impressed with the quality of candidates. “We saw a lot of people, especially early on, that previously held really high-level positions in kitchens, like sous chefs, chefs de cuisine, executive chefs, who were looking for extra cash, or who were between other jobs, or were looking for flexibility in their schedules.” Barzelay says he’s seen a wide mix of personalities. “We’ve frequently had people who we, under no circumstances, would have hired personality-wise,” he says. But, their skills have been adequate for washing and polishing. “And in many cases they were over-qualified for those positions,” he adds.

Barzelay says that restaurateurs are unlikely to replace full-time employees with temporary workers, even if hiring apps are on the rise. “The rates we pay for Pared or Instawork are well over the rates that we pay for full-time employees, even including all of the benefits,” he says. Plus, even if gig workers are skilled, Barzelay explains, it’s difficult to integrate new workers into a kitchen, especially if they are coming in for just a single shift, and while a new gig worker is in the kitchen, regular staff must provide critical oversight and training. According to Barzelay, the operating environment is, if anything, skewed in favor of long-term employees: “They know that if they leave today, they can have work tomorrow.”

Victor Aguilera is a former sous chef at San Francisco’s One Market and a now frequent Pared Pro (so frequent that after Pared connected us, Aguilera asked to proceed quickly because he was on a gig at the University of California, Berkeley). Aguilera says that he works at least two Pared gigs per week, primarily to diversify his cooking experience, and has a full-time job at the Bohemian Club in San Francisco, though he won’t disclose what he does for the private, men’s-only institution.

“There is the gamble if you’re going to have something more steady,” Aguilera admits, when asked if there are challenges to gigging full-time. But he adds that the most he’s ever earned over 13 years of cooking came from daily “doubles,” working back-to-back Pared gigs, after he moved from Florida to San Francisco. “It was kind of mind-blowing,” Aguilera says. “I’ve just never been used to getting paid so well.” Aguilera notes that, at the time, he made between $300 to $400 each day, a figure that he says substantially declined when he later accepted a full-time position as a sous chef at One Market. “I put myself in a hole because I was working almost 140 hours and making less than two grand every two weeks,” he explains.

Recently, Aguilera worked a gig at Petit Crenn, Dominique Crenn’s seafood-centric tasting menu concept in San Francisco’s Hayes Valley. He was then offered a stage at its Michelin-starred sister restaurant, Bar Crenn, and after that, a part-time job there. “Pared has helped me to make these types of moves,” Aguilera says, adding that he’s still mulling over Bar Crenn’s offer.

As similar apps proliferate (New York-based Jitjatjo was founded in 2016), and as Pared and Instawork expand their East Coast presence in cities like Washington, D.C., Philadelphia, and Boston, the debate around hiring apps could reach a national stage. But in California, Pared’s answer to chronic restaurant understaffing may not be a solution at all come January 2020, when Assembly Bill 5 (AB5), a new state law that defines who is considered an “employee,” goes into effect. In September, the California legislature passed the legislation, which codifies existing state court precedent requiring a business to show that a worker is properly classified as an independent contractor under a three-pronged “ABC” test: (A) that the worker is free from the hiring entity’s control in relation to the work performed; (B) that the work performed is outside the hiring entity’s usual course of business; and (C) that the worker is customarily engaged in an independently established business or trade of the same nature as the work performed. If an independent contractor doesn’t fit any of these prongs, then the business would need to reclassify that worker as an employee.

AB5’s passage and worker reclassification could make it more expensive for California restaurateurs to use hiring apps like Pared and Instawork. As employees, workers are entitled to the protections of the California Labor Code, including minimum wage and overtime requirements, and benefits, such as health insurance and paid family leave. As the “employer,” temporary staffing platforms would be responsible for paying these labor costs. Barzelay, and others paying attention, believe the apps may pass this additional cost onto restaurants in the form of higher rates for workers who could, in turn, shift this cost onto diners in the form of higher meal prices. Reclassification may also affect or cut into contractors’ lucrative hourly rates, which can rise as high as $30 per hour. Whether restaurateurs will give up on the apps due to a price hike is still an open inquiry. “I think we would continue to use it out of desperation,” says Tran, of Tratto, when asked if her restaurant would tolerate a price increase.

Pacio insists that AB5 doesn’t apply to Pared, and it seems unlikely that the company will voluntarily reclassify its workers. Thus, it may ultimately be a court that decides whether AB5 would apply. (Representatives for Instawork declined to comment on the point.) “I think there’s just a misunderstanding,” Pacio says. “Not all tech companies are the same, and we’re certainly not the same as Uber and Lyft.” According to Pacio, Pared workers benefit from flexibility and earn more as giggers than they would otherwise, unlike drivers on ride-hailing platforms, who, he says, make less and less over time. “We’re not trying to take advantage of these people,” says Pacio.

But Pacio’s intentions aside, there’s an argument to be made that workers who use Pared aren’t contractors under the new law. “There’s no question that these workers who are going into restaurants, even on a part-time or temporary basis, are anything but employees,” says Carole Vigne, director of the Wage Protection Program and a staff attorney at Legal Aid at Work, a nonprofit that focuses on workers’ rights. Take dishwashers, for example; Vigne argues that under Prong A of AB5’s test, which considers the hiring entity’s degree of control over the worker, dishwashers are likely employees because the person washing dishes doesn’t typically decide when and where they wash dishes; rather, this is something that the hiring entity determines. And under Prong B, dishwashers facilitate food service, and thus arguably perform work within the hiring entity’s “usual course of business.” So too with Prong C, as temporary workers who act as dishwashers don’t typically have their own dishwashing companies on the side, such that they would be engaged “in an independently established business or trade of the same nature as the work performed.”

For Vigne, then, the real question is who is the employer (the hiring app and/or the third-party business), and consequently, who is liable if workers are misclassified? “These apps very much are working as a staffing agency, and there’s a long line of cases here that say both the staffing agency and the actual employer can be on the hook for labor law violations,” Vigne explains. In other words, it’s not just Pared and Instawork that might be liable for worker misclassification — restaurants and businesses that use contractors on these platforms could face claims from temporary workers alleging that they’ve been misclassified.

It remains under debate whether AB5 will usher in a new wave of misclassification claims by restaurant workers after January 1, when the law takes effect. Vigne seems to think so. “There is going to be some very aggressive enforcement of AB5 come early 2020,” she says. “The Supreme Court has said it; now the legislature and the California government has said it. I think there’s very little room left for interpretation about what California intends for its workers.”

Holvick isn’t so sure. Although gig workers can already bring misclassification claims in California under existing precedent, it’s not something she’s seen in the restaurant sector. “I think that lawsuits stem from unhappy workers, and the workers aren’t unhappy yet,” she says. “When the workers are benefiting and happy, they’re not the ones testing the law.” With multiple stakeholders benefiting from apps like Pared, the litigation landscape remains quiet for now; over the long term, only time will tell.

Kathryn Bowen is a writer and lawyer based in Oakland, California.
Zoë van Dijk is a freelance illustrator based in Los Angeles, California.