The Last Mile 

When the Internet grocer Webvan opened a distribution center in East Oakland, it seemed that some of the area's e-commerce riches were beginning to trickle down to street level. Now, employees wonder if the salad days are over.

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Granted, Valentine has a bone to pick with Webvan. Not only was he terminated after he tried to claim worker's comp for his injuries, but he had previously applied for management positions three times, only to be turned down. Several other people in his department supported him in his repeated bids for management; they feel he was turned down because he is African American, and point out that Webvan's upper management is mostly white, and the rank-and-file mostly black. "Webvan was making them promises of advancement, training, higher pay, but instead of that we started getting subtractions, while the upper management itself was getting raises and promotions," he says. "It diminished morale; our sick leave started going up drastically. People quit, but Webvan was unable to replace these professionals because it was nonunion in the first place, and after word spread, nobody was going to touch Webvan with a ten-foot pole."

Once Webvan hit rough economic times, the relationship between management and workers only got more strained. "When I first got there, it was a fun place to work, but after a while they wouldn't tell you anything," says Stripling. "We would go ask managers different things, and they wouldn't look you in the eye. They would be looking down at your feet."

By the middle of last summer, the grocery industry professionals Webvan had originally hired started leaving, and the company replaced them with temps, or with less experienced workers. It got so bad that Webvan started offering a $2,000 bonus for bringing in a new recruit. In the customer-service department, where there were increasing complaints about incorrect grocery orders, the sentiment grew that new workers weren't quite as proficient as the old ones. "People in the DC were largely temps and always being cycled through, so there was no real continuity of someone having their job for a long time," says Lewis. "There were a lot of errors, missing items, and we'd end up apologizing profusely. A customer may or may not keep the incorrect item, and then we'd have to schedule another delivery which of course would cost more money."

In fact, customer-service reps would do more than apologize--they could issue coupons and refunds. By Webvan's own estimate, in 1999 they lost $1 million on make-goods to customers. There are tales of customer-service reps who, appalled at the egregiousness of certain errors, ran out to grocery stores and bought the missing items with their own money. And then there was that horrible Thanksgiving when a slew of customers just didn't get their turkeys at all.

Not all customers could be quelled with coupons. "Sometimes people would get e-mail letters telling them fifteen to twenty items were missing," says Machado. "Some people were like, 'If we can't get the whole delivery, we don't want it,' and that's a really big way to lose money." She feels that in recent months, service quality was truly beginning to slip. "Some people would say that they'd been having really good deliveries since the beginning, but lately the drivers weren't as clean, courteous, pleasant, or willing to help people unload, which I think was because they were getting a large delivery load and had less time to do stuff," says Machado. "Customers would say, 'I really love your service, but the last four orders had items missing, so the next time, that's it.'"

Even though Webvan is highly automated, there is still room for human error. After all, people working late at night can make mistakes, and the system was so complex that if someone accidentally dumped a product in the wrong bin at the beginning of the process--say, putting cans of Spaghetti-O's in the bin that should have held peanut butter--the error would permeate the whole system. Likewise, if a customer ordered an item that the Web site listed as in stock, but the next morning the vendor failed to deliver it to the DC on time, it just wouldn't get packed.

And then sometimes the high-tech system just wouldn't work as well as it was supposed to; a glitch in one part of the conveyor belt system, for instance, could stop operations throughout the DC. Rich Hedges, spokesperson for the United Food and Commercial Workers (UFCW) and a man who is used to the pitfalls of the grocery business, can cite a whole list of technical problems that Webvan encountered. "Their conveyor was supposed to keep things frozen till they were ready to go, but it didn't work right because the cold jammed it up," he says. "Their freezers have like forty-foot ceilings--the cubic feet that you're cooling compared to a grocery store is just tremendous. Every truck has to be a reefer, but they have no cool curtains, so every time they open the door they have forty feet of cool going out. It's the most energy-inefficient company. If all the greens would realize what an energy waste this company is..." he says, trailing off.

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