- Mirroring conditions at Amazon in the US, at Coupang employees are being literally worked to death to keep up with delivery deadlines
Early on the morning of October 12 last year, 27-year-old Jang Deok-joon came home after working his overnight shift at South Korean e-commerce giant Coupang and jumped into the shower. He had worked at the company’s warehouse in the southern city of Daegu for a little over a year, hauling crates full of items ready to be shipped to delivery hubs. When he did not come out of the bathroom for more than an hour and a half, his father opened the door to find him unconscious and curled in a ball in the bathtub, his arms tucked tightly into his chest. He was rushed to the hospital, but with no pulse and failing to breathe on his own, doctors pronounced him dead at 9.09am. The coroner ruled that he had died of a heart attack.
Jang was the third Coupang worker to die that year, adding to growing concern about the nature of the company’s success. And Coupang has been astoundingly successful, having risen to become South Korea’s third-largest employer in just a few years, harnessing a vast network of warehouses, 37,000 workers, a fleet of drivers and a suite of artificial intelligence-driven tools to take a commanding position in South Korea’s crowded e-commerce market.
Coupang is everywhere in South Korea: half of the population has downloaded its app, and its “Rocket Delivery” service – the company claims 99.3 per cent of orders are delivered within 24 hours – has earned it a reputation for “out-Amazoning even Amazon”.
Coupang’s use of AI to shorten delivery times is especially striking. Its proprietary algorithms calculate everything from the most efficient way to stack packages in delivery trucks to the precise route and order of deliveries for drivers. In warehouses, AI anticipates purchases and calculates shipping deadlines for outbound packages. This allows Coupang to promise delivery in less than a day for millions of items, from a 60 US cent face mask to a US$9,000 camera.
Such innovations are why Coupang confidently bills itself as the “future of e-commerce”, and the driving force behind the company’s recent launch on Nasdaq that valued the company at US$84 billion – the biggest initial public offering in the United States by an Asian company since e-commerce giant Alibaba, which owns the South China Morning Post, in 2014.
But what does all this innovation and efficiency mean for the company’s workers?
Like Jang, who had told his mother that workers were treated like “disposable objects”, several more warehouse and delivery employees had experienced the dehumanising effects of Coupang’s algorithmic innovations. Some talked about a bruising pace of work hitched to the expectations of superhuman delivery times. Others said it was difficult to even go to the bathroom at work.
In 2014, when Coupang began offering Rocket Delivery, its on-demand delivery service, it had promised stable careers with above-average benefits even to bottom-rung workers. But somewhere along the way, it seemed, the workers had been reduced to what South Korean labour journalist Kim Ha-young has called the “arms and legs of artificial intelligence”.
It is no coincidence that much of this criticism mirrors reports of working conditions at Amazon. Although Coupang was founded in 2010 as a Groupon-like deals platform, it switched to Amazon’s vertically integrated fulfilment model in 2014, pledging to become the “Amazon of Korea”. In doing so, it ran into the same problems as Jeff Bezos’ juggernaut.
They make it very clear as soon as you’re hired that if you cause any kind of problems, you won’t be getting a contract extension
Former Coupang warehouse worker Jeon Woo-oak
What makes Rocket Delivery work is certainty, a promise that Coupang’s algorithms will determine exactly when a batch of deliveries needs to leave the warehouse to make it to the customer on time. In the company’s warehouses, these delivery deadlines come about every two hours.
“I realised when I started working there that the sole priority was meeting Rocket Delivery deadlines,” says Go Geon, one former warehouse worker. “We were just robots.” Go went on medical leave from his job at Coupang in May last year after tearing his left hamstring while running to meet a deadline. He has since been let go by the company.
Like Amazon, Coupang has used a “unit-per-hour”, or UPH, metric to measure worker productivity in real time and maintain the gruelling pace in its warehouses. Although workers are officially given one hour of rest for every eight-hour shift – the legally mandated minimum break – one driver no longer with the company says most people simply worked through their breaks to stay on schedule.
In an emailed statement, a Coupang representative said that the company no longer tracks UPH at its warehouses. But one current worker says some warehouse managers are still openly monitoring work rates this way. “They rarely use the term ‘UPH’ any more,” he says. “But they’ll still hector you for being too slow, presumably based on some form of concrete proof.”
During the pandemic, from which Coupang has handsomely profited, the casualties of this obsession with hyper-efficiency stacked up. From 2019 to 2020, work-related injuries and illnesses at Coupang and its warehouses nearly doubled to 982 incidents. Since Jang’s fatal heart attack, three more Coupang workers have died from what labour activists say was overwork (there have been no official rulings on their deaths).
Despite the concerns these deaths have raised, none of them have caused so much as a blip in Coupang’s operations. Although it employs its workers directly rather than using subcontractors, most are reportedly hired on a day-to-day basis the night before via an app called Coupunch, or on temporary contracts that usually last a few months.
For those who voice dissent, report a workplace injury or fall short of their productivity requirements, Coupang is known to withhold contract extensions. The company stated that it “complies with the Labour Standard Act in every aspect including hiring and termination”, and that “the rate of renewal for the contract worker is more than 90 per cent”. However, courts have ruled in the past that the company unfairly fired a worker who submitted a workplace injury claim.
“They make it very clear as soon as you’re hired that if you cause any kind of problems, you won’t be getting a contract extension,” says former warehouse worker Jeon Woo-oak.
Jang’s mother, Park Mi-sook, said that as a day labourer who applied for shifts every night via Coupunch, Jang had been anxious about his precarious employment status. But he had hoped to stay in the company’s good graces and apply for permanent employment. In the months leading up to his death, Jang had worked the 7pm to 4am shift, in addition to frequent overtime, for up to 59 hours over seven consecutive days, earning minimum wage (the equivalent of about HK$59, or US$7.60, per hour). “He would be completely wiped out after the end of each deadline,” says Park.
In 2019, as Coupang ramped up its overnight delivery service that offered a 7am delivery guarantee for orders made the previous evening, the number of deadlines during a typical night shift in the Daegu warehouse increased from about three to seven, according to one worker. Meeting them took a physical toll: athletic and sturdily built, Jang had lost about 14kg since starting at Coupang in June 2019. Park says the rapid weight loss caused him to develop wrinkles on his face.
This is really about the future of work. People are managed by an algorithm. They’re disciplined by an app on their phone. And they’re fired by text message. People have had enough
Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union
In February, South Korea’s government officially attributed Jang’s death to overwork. The final report noted that Jang’s body bore signs of severe muscular breakdown. Coupang issued an apology and promised to improve working conditions, such as expanding employee medical check-ups.
In its emailed statement, a Coupang representative pointed to the fact that Jang’s death was the only one to be officially ruled work-related in the company’s history. And it said its recent investments in warehouse automation “increases efficiency and decreases workload for our workers”.
It reads like Groundhog Day for any who have followed the criticism Amazon has faced for a punishing pace of work, algorithms that surveil and fire workers, oppressive productivity requirements and disposable employees.
In the US, discontent around these conditions fuelled a historic unionisation drive at Amazon’s fulfilment centre in Bessemer, Alabama, earlier this year. Union organiser Stuart Appelbaum, the president of the Retail, Wholesale and Department Store Union, talked about the “unbearable” pace in the company’s warehouses and explained: “This is really about the future of work. People are managed by an algorithm. They’re disciplined by an app on their phone. And they’re fired by text message. People have had enough.”
In response, Amazon launched a large-scale anti-union blitz while denying allegations that its delivery drivers were forced to urinate in bottles. Amazon has since walked back its denial of these reports, but ultimately won the Bessemer vote.
In a letter to Amazon shareholders published soon after the unionisation vote in early April, Bezos announced the company would be rolling out a new “job rotation programme” to address the issue of high injury rates. The programme, wrote Bezos, will use “sophisticated algorithms to rotate employees among jobs that use different muscle-tendon groups to decrease repetitive motion and help protect employees from MSD risks”. But underlying this scheme is a problematic view of injuries as a mere efficiency problem, rather than the warning signs of deeper dysfunction. The plan seems less like a solution for overwork than an extension of the performance-obsessed micromanagement that created the problem in the first place.
In an emailed statement, Amazon spokesman Max Gleber declined to offer additional details. “Our scanning process is to track inventory movement, not people,” he said. “We know these are physical jobs but we do all that we can to ensure the safety and health of our employees.”
In South Korea, Coupang has managed to navigate the blind spots in South Korean labour law to keep its workers on insecure contracts, thus less likely to organise, while subjecting them to ever-intensifying workloads, repeating the same Amazon line, that the company’s direct employment model allows it to offer better benefits compared with the rest of the industry. But as former warehouse worker Go insists, the biggest problem isn’t even contracts, it is an unreasonable promise of speed – “the source of all these problems are delivery deadlines and Rocket Delivery”.
Coupang’s promises to address its own labour issues have been muted as the pandemic has worn on. Global e-commerce exploded thanks to store closures and social distancing, and the industry is projected to record close to US$5 trillion in sales worldwide by the end of this year.
In its IPO prospectus, Coupang acknowledged its core existential dilemma: pursuing “speed and reliability” – the two pillars of its business model – while controlling its labour costs, which have grown fourteen-fold between 2014 and 2020. (Meanwhile, the company has yet to turn a profit with Rocket Delivery.)
Jang Kwi-yeon, a researcher at the Labour Rights Research Institute, compares Coupang’s warehouses not to Amazon, but the infamous sweatshops in 1970s South Korea.
“I think the logistics system itself should be overhauled,” she says. “The right to rest and the health of workers should be set as fixed preconditions, and then the algorithms should be put to work to calculate how fast deliveries can be made.”
The chances of an e-commerce company whose entire business hinges on being fast choosing to be slower are, of course, slim. And to keep up with Coupang, competitors such as internet giant Naver and department store chain Shinsegae are promising ever-faster deliveries that will likely place an even greater burden on their workers. In the past year, more than a dozen Korean delivery drivers have died on the job, echoing Jang Deok-joon’s case, say families and unionists.
In the US, Walmart has recently begun offering same-day delivery, suggesting the same story will play out there, too. The only new element is that the pandemic has pushed already desperate workers into near complete dependence on these cutthroat companies and the billionaires who own them.