On an otherwise busy stretch of Brooklyn’s Greenpoint neighborhood stands a black-painted former autobody shop. Long papered-over windows hide its internal workings and lend a gloomy presence to a street otherwise bustling with brunchers. A hopeful shopper stands over the threshold, taking stock of shelves lined with Doritos, Kettle Chips and sodas as a worker explains that it’s closed to the public. “You can order on the app for delivery, though,” he says.
This store-like expanse is a micro-fulfilment center, or “dark store”, for Gopuff, one of numerous hyper-fast delivery companies to launch over the last few years in large cities across the US as the pandemic switched consumer focus – for those who could afford it – to ordering in.
These companies offer delivery in 10 to 30 minutes of everything from candy and alcoholic beverages to coffee filters and batteries. It’s a speed that sets them apart from regular grocery delivery apps such as Instacart and FreshDirect and is achieved by opening dark stores in the communities they serve.
Earlier in 2022, near the height of their prevalence, there were 115 dark stores peppering New York City’s five boroughs. according to a map commissioned by city councilmember Gail Brewer, mostly concentrated in wealthier, whiter neighborhoods.
Backed with billions in venture capital funding, hyper-fast delivery companies – including Getir, Gorillas and FastAF – promised shoppers speed and ease. But critics have argued that they are bad for workers, local businesses and communities. And in New York, local officials have accused some dark stores of violating zoning and consumer protection laws by setting up in areas not zoned for warehouses, for not allowing customers in to shop, and not accepting cash.
Apps – including Buyk, Fridge No More and 1520 – are already pulling out of cities or have declared bankruptcy, some without ever becoming profitable; 23 remained in Manhattan, according to the most recent count by Brewer’s office.
Their exit may create a more favorable playing field for those holdouts with extra determination or more burnable cash. The market is already seeing consolidation with just a handful of main players left in the US, including Turkish company Getir, Germany-based Gorillas and US-based Gopuff.
Infusions of capital have flooded in. Getir raised $768m in March 2022, while Gopuff brought in $1bn in 2021. Between 2020 and the beginning of 2022 investors plowed more than $5.5bn into instant delivery companies based in New York City alone – despite the fact that they hemorrhage money. Jokr, for example, was losing $159 an order almost a year before it shut down US operations this June, according to a report in the Information. The company did not respond to a request for comment.
Bill Herman, who teaches business ethics at Metropolitan State University of Denver, says rapid delivery apps want to be for groceries what Amazon became for books and are willing to lose out on profits in the hopes they will emerge victorious. “Imagine being an early investor in the grocery delivery app that becomes the dominant player and ‘disrupts’ the space,” Herman says.
But the apps’ quick coming and going raises questions about the responsibility of the broader tech industry and its countless other “disruptions” to provide fair, stable jobs and equitable cities.
While these companies have an obligation to do right by the communities, customers, employees and suppliers they interact with, says Herman, very few take that seriously. The economic trend that has led to so many precarious jobs “is unethical and actively harmful to people”, Herman says.
They also benefit from the “casualization” of labor, he says. Once upon a time, a delivery job could offer decently paid hourly work with employers absorbing risks such as on-the-job injuries. These jobs now look very different.
At first glance, ultra-fast delivery companies appear to offer their workers a better deal than many other delivery companies. Classified as employees, workers receive hourly wages and are promised a 100% payout of tips.
It’s a contrast with restaurant delivery companies such as DoorDash, whose gig workers – classified as “independent contractors” – can end up earning less than minimum wage. (A DoorDash spokesperson said workers make “more than $25 per hour on average while on delivery”.)
But workers at instant delivery apps have said that when tips or paychecks go missing – a consistent worker complaint – it’s often unclear who to go to, making it hard to ensure they are paid all they are owed. “I got tired of them just giving me the runaround,” a delivery worker for the now defunct Buyk told New York Focus in May. “They told me to speak to my manager about the tips. When I spoke to my manager, he told me he had nothing to do with our tips.”
The companies treat workers, “not as a source of profit that keeps the company going, but just another expense on a spreadsheet to minimize the costs of and reduce when times are slow”, says Shelly Steward, director of the Future of Work Initiative at the Aspen Institute.
“One of the things that has kept people turning to this kind of work is how broken the larger labor market is,” says Steward. There aren’t enough good jobs, she says, meaning workers have nowhere to turn except “jobs where the conditions are horrible, the risks are high, and the income is volatile and unpredictable”.
Rapid delivery companies also have impacts on the communities in which they are sited. Residents around Gopuff’s dark stores, whose workers deliver in partnership with Uber Eats as well as by bike, complain of idling freight trucks, extra traffic from delivery cars and late-night noise blaring from cars’ stereos. Bicycle delivery workers, rushing to fulfill orders, have been injured on the job and accused of endangering pedestrian safety.
Owners of bodegas – New York City neighborhood staples – have expressed fears of being undercut by the lower prices offered by the apps.
Entrepreneur Jose Bello – who partnered with two New York City bodega associations to try to build a bodega-specific rapid delivery app that failed through lack of funding – says that when Gopuff opened near a Chinatown bodega in 2021, the shop’s owner initially didn’t see it as competition. “I went through the whole [Gopuff shopping] list and showed him. You’re selling this for $5 and they’re selling it for $3. At that point he said, ‘It’s a problem.’”
Bello says there are some apps that seem to want to help smaller businesses. He was in talks with Gorillas about selling bodega sandwiches through their app. “Their founder is also an immigrant and he didn’t want to harm bodegas,” Bello says.
Sharon Zukin, a professor emerita of social anthropology and author of The Innovation Complex: Cities, Tech, and the New Economy, says “there’s this enormous contradiction that’s built into all kinds of digital businesses”. While they operate locally, the money they make often “goes out of the neighborhood, goes out of the city, goes out of the region”, she says.
Companies and investors feel little connection to, or responsibility for, the communities they operate in, says Zukin. “You really can never look for ethics on their part,” Zukin says, “beginning at the lowest level with not … cleaning the sidewalk, [or] contributing to local events, or limiting … noise.”
Gopuff and FastAF did not respond to a request for comment from the Guardian.
A spokesperson for Gorillas said: “From day one, we have opted for permanent jobs and hourly wages above the minimum wage.” Riders are provided with e-bikes, have access to sick-leave, paid vacation and fair wages, said the spokesperson, adding that the company also supports small businesses, including bodegas, “amplifying their community-driven missions and allowing them to compete with established industry giants”.
Adam Wacenske, Gorilla’s US general manager, said “we strongly contest suggestions that we are not part of the New York City community”, and added, “we always comply with all applicable laws … including zoning regulations”.
Langston Dugger, head of US operations at Getir, said its employees “earn benefits and retain 100% of their tips” and receive training, “high-quality safety gear” and e-bikes and e-mopeds. The company has integrated stores into cities, says Duggan, “by encouraging walk-in shopping in many of our stores, getting to know our neighbors, and beautifying our storefronts”.
Getir “welcomes regulations” around dark stores, says Nico Probst, head of government relations and is “compliant with all applicable laws”.
But worker groups are pushing for more of a spotlight on these instant delivery companies and their impact on workers and neighborhoods.
Hildalyn Colón Hernández, director of policy and strategic partnerships of advocacy group Los Deliveristas Unidos (LDU), wants rapid-delivery grocery companies to be clearly defined – whether as grocery stores or something else – and then made to comply with existing guidelines. Food stores in NYC have to follow a host of rules and regulations that the apps have been able to skirt, Hernández says, “it’s like the law doesn’t apply to them”.
In July, New York’s city council introduced three bills to regulate these businesses, including the ability to issue violations for misleading advertising and prevent apps from guaranteeing delivery in 15 minutes or less. Outside the US, European cities such as Amsterdam and Rotterdam in the Netherlands have implemented a freeze on new dark store openings for a year, after complaints about their impacts.
The experts that spoke to the Guardian called for better local and national regulation and advocated for workers to unionize. Perhaps most important, says Steward, is “focusing on advancing good jobs, in all industries in all communities”, rather than allowing poor-quality jobs and working conditions to proliferate.
“There’s nothing inherently bad or dangerous about work arranged from an app for tech-driven companies,” Steward says. “It’s the business model and the decision makers behind the apps that are bad.”