What started as an experiment to solve short staffing issues at Toronto-based Freshii, has turned out to be the global way to go. Freshii’s “virtual cashiers” make $3.75 an hour as compared to the regular $15 (CAD). But the business is thriving.
Toronto-based fast-casual brand Freshii is known for its health-forward offerings available across its 384 stores in 172 cities on multiple continents. Freshii founder Matthew Corrin left the fast-food chain two months ago to focus on Percy, a video-calling device that replaces cashiers. It now has more than a dozen clients in North America and employs nearly 100 workers in Nicaragua, Pakistan and Bolivia.
Last year, amid severe pandemic-related business restrictions, senior members of Freshii’s management team – including founder and the then-CEO Matthew Corrin – quietly began testing “Percy,” a video calling device attached to the cash registers of some franchises.
The software was designed to connect Freshii customers with cheap outsourced workers based in countries thousands of miles away. The idea, the creators said, was to help franchise owners reduce labour costs while keeping their doors open in case local staff were sick.
The pilot project went relatively unnoticed until April, when Percy’s business model drew fierce criticism from union organizers and senior politicians on grounds that “virtual cashiers” based in countries like Nicaragua, are paid $3.75 (US) per hour. But now, despite the backlash, Percy’s founders say they hope to grow their start-up into a multinational with offices around the world – completely independent of Freshii.
Corrin, one of Percy’s early investors, officially became CEO of Percy after stepping down as CEO of Freshii in May. Angela Argo, former vice president of Freshii, left the fast-food chain in June to join Percy along with Ali Aqueel, a former senior product manager at Freshii who joined Percy in January.
Responding to criticism of Percy’s business model, Argo explained in an online interview that the software is meant to offer a solution to chronic labour shortage facing Canada’s service industry without relying entirely on automation.
The latest data from Statistics Canada shows that the food and hospitality sectors have lost around 171,300 workers since the start of the pandemic. In search of higher incomes, job security and a change of scenery, many shift workers have taken up new jobs in new industries and vacancies in restaurants and fast-food chains have exploded.
For a restaurant owner in Ontario, the difference between paying the local minimum wage and an hourly wage of $3.75 in Nicaragua is hundreds of dollars in savings every day.
Although these salaries have drawn criticism, Argo notes that they are considerably higher than the minimum wage standards in the countries where their workers are based. In Nicaragua, for example, the minimum wage is estimated at around $0.64 (US) per hour.
“It’s not about replacing people or jobs. It is not about lowering wages or working conditions. This is about a labour shortage in the restaurant industry,” reads the company’s website.