“Dark Stores” offer everything you need in 30 minutes. But there is a human price – The Guardian | Hot Mobile Press

OIn an otherwise busy section of Brooklyn’s Greenpoint neighborhood stands a black-painted former body shop. Long, wallpaper-covered windows hide the interior, lending a somber presence to an otherwise brunch-bustling street. A hopeful shopper crosses the threshold and takes stock of the shelves lined with Doritos, kettle chips and sodas while a worker explains that it’s closed to the public. “But you can use the app to order and have it delivered,” he says.

This store-like space is a micro-fulfillment center, or “dark store,” for Gopuff, one of numerous hyper-fast delivery companies launched in major U.S. cities in recent years as the pandemic shifted consumer focus — to those who could afford it – to order.

These companies deliver everything from candy and alcoholic beverages to coffee filters and batteries in 10 to 30 minutes. It’s a speed that sets them apart from regular grocery delivery apps like Instacart and FreshDirect, and is achieved by opening dark stores in the communities they serve.

As of early 2022, at the peak of its proliferation, there were 115 dark stores across the five boroughs of New York City. They’re mostly concentrated in affluent, whiter neighborhoods, according to a map commissioned by City Councilman Gail Brewer.

A dark Gopuff store, painted black with wallpapered windows
Gopuff’s Dark Store in Greenpoint, Brooklyn. Photo: Lela Nargi

Funded with billions in venture capital, hyper-fast delivery companies — including Getir, Gorillas, and FastAF — promised speed and ease to shoppers. However, 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 locating in areas not designated for warehouses, not allowing customers to shop, and not accepting cash.

Apps — including Buyk, Fridge No More and 1520 — are already pulling out of cities or have filed for bankruptcy, some without ever becoming profitable; 23 remained in Manhattan, according to the latest count from Brewer’s office.

Your exit could create a more favorable playing field for those holdouts with extra determination or more burnable cash. The market is already consolidating with just a handful of major players left in the US, including Turkey’s Getir, Germany-based Gorillas and US-based Gopuff.

Capital injections have flowed in. Getir raised $768 million in March 2022, while Gopuff raked in $1 billion in 2021. Fact They Bleed Money. Jokr, for example, lost $159 per order almost a year before it ceased US operations in June this year, according to a report in Information. The company did not respond to a request for comment.

Chart showing the largest digital grocery stores outside of China, with Gopuff at the top.

Bill Herman, who teaches business ethics at the Metropolitan State University of Denver, says rapid-delivery apps want to be for groceries what Amazon has become for books, and they’re willing to forfeit profits in the hopes they’ll emerge victorious. “Imagine being an early investor in the grocery delivery app that’s becoming the dominant player and ‘disturbing’ the space,” says Herman.

But the quick coming and going of apps raises questions about the responsibility of the broader tech industry and its myriad other “disruptions” to create fair, stable jobs and just cities.

While these companies have a duty to the communities, customers, employees, and suppliers they interact with to do the right thing, Herman says very few take it seriously. The economic trend that has led to so many precarious jobs “is unethical and actively harmful to people,” says Herman.

They also benefit from the “casualization” of work, he says. In the past, a delivery job could provide decently paid hourly work, with employers able to absorb risks such as work-related injuries. These jobs look very different now.

At first glance, ultra-fast delivery companies seem to offer their employees a better deal than many other delivery companies. Classified as employees, workers are paid hourly wages and are guaranteed a 100% return of tips.

It contrasts with restaurant delivery companies like DoorDash, whose gig workers — who are classified as “independent contractors” — can end up earning less than minimum wage. (A DoorDash spokesman said the workers “are making more than $25 an hour on average while they’re delivering.”)

But instant-delivery app employees have said it’s often unclear who to contact when tips or paychecks go missing — a constant complaint from workers — making it difficult to make sure they get everything paid for what they owe. “I was tired of them just driving me around,” a delivery man for the now-deceased Buyk told the New York Focus in May. “They told me to talk to my manager about the tips. When I spoke to my manager, he told me he had nothing to do with our tips.”

Companies treat workers “not as a source of profit that keeps the company running, just another expense on a spreadsheet to minimize and reduce costs when times are slow,” says Shelly Steward, director of Future of Work Initiative at the Aspen Institute.

“One of the things that has drawn people into this type of work is how broken the larger job market is,” says Steward. There aren’t enough good jobs, she says, meaning workers have nothing to turn to except “jobs where the conditions are dire, the risks are high, and income is fluctuating and unpredictable.”

Fast delivery companies also have an impact on the communities in which they are based. Residents around Gopuff’s dark shops, whose employees deliver in partnership with Uber Eats as well as by bike, complain of idle trucks, extra traffic from vans and late-night noise pollution from car stereos. Bike suppliers rushing to fill orders have been injured at work and accused of endangering pedestrian safety.

Bodegas owners — staples of New York City neighborhoods — have expressed fears of being undercut by the apps’ lower prices.

Entrepreneur Jose Bello – who has teamed up with two New York bodega associations to try to develop a bodega-specific app for quick deliveries but succumbed to a lack of funds – says when Gopuff 2021 was near a bodega in Chinatown opened, the store owner did not initially see it as competition. “I went through the whole thing [Gopuff shopping] list and showed it to him. You sell that for $5 and they sell it for $3. At that point he said, ‘That’s a problem.’”

According to Bello, there are some apps that seem to want to help smaller businesses. He’s been 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,” says Bello.

Sharon Zukin, Professor Emeritus of Social Anthropology and author of The Innovation Complex: Cities, Tech, and the New Economy, says, “There’s this tremendous contradiction that’s built into all kinds of digital businesses.” While they operate locally, the money they make often “flows from the neighborhood, from the city, from the region,” she says.

Businesses and investors feel little connected or accountable to the communities in which they operate, Zukin says. “You really can never look for ethics on their side,” says Zukin, “start at the bottom level by not…cleaning the sidewalk, [or] contribute to local events or… limit noise.”

Gopuff and FastAF did not respond to a request for comment from the Guardian.

A spokesman for Gorillas said, “We have opted for permanent positions and hourly wages above minimum wage from day one.” Riders will be equipped with e-bikes, have access to sick leave, paid vacation and fair wages, the spokesman said, adding that the company also supports small businesses, including bodegas, “to reinforce their community-driven missions and allow them to compete with established industry giants.”

Adam Wacenske, Gorilla’s US general manager, said, “We staunchly deny suggestions that we are not part of the New York community,” adding, “We always comply with all applicable laws…including zoning regulations.”

Langston Dugger, Getir’s head of US operations, said its employees “earn benefits and keep 100% of their tips” and receive training, “quality safety equipment” and e-bikes and e-mopeds. The company has integrated stores into cities, Duggan says, “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 “complies with all applicable laws”.

But worker groups are pushing for more spotlight on these instant-delivery companies and their impact on workers and neighborhoods.

Hildalyn Colón Hernández, director of policy and strategic partnerships for the advocacy group Los Deliveristas Unidos (LDU), wants fast food delivery companies to be clearly defined — whether as grocery stores or something else — and then made to comply with existing guidelines. Grocery stores in NYC have to follow a variety of rules and regulations, which the apps managed to circumvent, Hernández says, “it’s like the law doesn’t apply to them.”

In July, the New York City Council introduced three bills to regulate these companies, including the ability to penalize deceptive advertising violations and prevent apps from guaranteeing delivery in 15 minutes or less. Outside the US, European cities like Amsterdam and Rotterdam in the Netherlands have frozen new dark store openings for a year after complaints about its impact.

The experts who spoke to the Guardian called for better local and national regulation and for workers to organize. Perhaps most importantly, Steward says, is “a focus on promoting good jobs in all industries and in all communities,” rather than allowing poor-quality jobs and working conditions to proliferate.

“There’s nothing inherently bad or dangerous about work being arranged by an app for tech-centric companies,” says Steward. “The business model and the decision-makers behind the apps are bad.”

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