Sunday, October 4, 2015

The fiction of brands - how Apple, Hilton, McDonald's, Uber, and others are not single entities, but thousands of independent companies and contractors

"Repetition," Jeena Paradies. Creative Commons Attribution 2.0 license.

Apple. Hilton. McDonald's. Uber.

Four well-known brands that work very hard at protecting their brands.

Except in one significant respect.

I'll illustrate this by taking some information from a Neil Nisperos article that appeared in my local paper, the Inland Valley Daily Bulletin, on Friday.

According to Nisperos, four housekeepers who worked for - and were fired by - an Inglewood company named Pro Clean have filed a lawsuit. The suit alleges that they were fired for engaging in protected union organizing activities.

So they filed the lawsuit - against Doubletree Hilton Ontario Airport.

But if they were working for Pro Clean, then why did they fire the lawsuit against a Hilton-branded entity?

Because Pro Clean is a staffing agency that assigned the four to work at the Doubletree, where things were allegedly not all that great.

We wear the same uniforms, have the same supervisors, and eat in the same cafeteria. We also suffer under harsh working conditions,” said Maria Sanchez, one of the subcontracted housekeepers fired from the DoubleTree by Hilton.

(Nisperos noted, precisely, that the four were not fired BY the Doubletree, but FROM the Doubletree.)

The Doubletree itself has provided a response to the allegations.

“The Doubletree Ontario Airport Hotel complies with all local and federal labor laws and is an equal opportunity employer. The hotel is committed to providing a positive and supportive environment for all of its employees.”

The general manager who provided that response was also very precise. Note that the response states that the hotel provides a good environment for its EMPLOYEES.

Maria Sanchez and the other three, of course, were not employees of the Doubletree. They were employees of Pro Clean.

But the Doubletree is not the only establishment that has non-employees providing services. A year or two ago, someone that I know went to an Apple Store for a training course. Apple's brand image relies not only on the quality of its products, but the quality of the services that it provides. Thus Apple Stores have Genius Bars, training courses, and the like.

The person who provided the training course - a course upon which Apple's brand image is highly dependent - was not an employee of Apple.

Which brings us to McDonald's, which is kind of a mixed bag. Fast food outlets are a target for the living wage folks, who berate McDonald's and other employers in the industry for their low wages. McDonald's recently responded as follows:

On July 1, 2015, starting wages at McDonald’s company-owned restaurants in the U.S. will be one dollar over the locally-mandated minimum wage. The wages of all employees up to restaurant manager will be adjusted accordingly based on tenure and job performance. By the end of 2016, McDonald’s projects that the average hourly wage rate for McDonald’s employees at company-owned restaurants will be in excess of $10.

Also on July 1, full- and part-time crew employees at company-owned restaurants, with at least one year of service, will begin to accrue personal paid time-off. For example, an employee who works an average of 20 hours per week will be eligible to accrue approximately 20 hours of paid time off per year. If these employees don’t take the time off they’ve earned, they will be paid for the value of that time.

These two benefit enhancements apply to McDonald’s company-owned restaurants, which represent more than 90,000 employees and about 10 percent of McDonald’s restaurants nationwide. The more than 3,100 McDonald’s franchisees operate their individual businesses and make their own decisions on pay and benefits for their employees.

Another precisely worded statement, with repeated mentions of the words "company-owned" - as well as a note of the fact that 9 times out of 10, that so-called "McDonald's" restaurant that you are visiting is not owned by McDonald's.

Last but not least, this brings us to Uber. Uber clearly has a brand, and Uber has an app that allows you to obtain a ride from over 160,000 independent companies in the United States alone.

Yes, 160,000. That's roughly the number of Uber drivers in the U.S. as of last December - and as you've probably heard, Uber drivers are not employees of Uber, but independent contractors. So that "Uber driver" isn't an Uber driver, but just someone who has agreed to take requests from the Uber app.

Of course, that's not the way that Uber - or Apple, Hilton, McDonald's, or other large companies - want you to see it. When you get a ride in an Uber car, or take a training course at an Apple Store, or pick up a cookie at a Doubletree hotel, or get a Big Mac at a McDonald's, the companies want you to think about the Uber, Apple, Hilton, or McDonald's experience. And the companies lay down strict rules for their independent contractors and franchises - the age of the car that you use for "Uber" trips, the quality of the parts assembled for your "Apple" phone, the number of "Hilton" rooms that have to be cleaned, the size of that "McDonald's" Big Mac.

But when push comes to shove, these companies - and most others - say that the entities providing those products and services are legally distinct entities. We're not responsible for the criminal record of the driver, or the working conditions that the Chinese factory worker encounters, or the number of rooms that the room cleaner must clean, or for the wage that the Big Mac assembler makes.

But the companies aren't the only beneficiaries of that brand fiction. The four Doubletree workers could have only sued Pro Clean for firing them, but they saw an advantage in going after the Doubletree itself. Living wage proponents don't want to deal with all of the 3,100+ independent franchisees - it's much easier for them to pressure one entity, McDonald's, into mandating that franchises pay a particular wage.

Where does this leave the consumer? There are countless other examples of cases in which we think we're dealing with Company A, but instead are dealing with some other company that we've never heard of.

The answer is to stay educated. Some things are not what they appear to be.

Oh, and by the way, that Doubletree Hotel in Ontario, California is owned by the Blackstone Group. So do you deal with Pro Clean (no website), the Blackstone Group, or Hilton Worldwide if you have a problem with your room?
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