People familiar with the matter said that Gopuff, a $15 billion express delivery startup, has not only recently cut the salaries of its drivers, but it also pays drivers that are often lower than their income. This is a sign of operational inefficiency and makes people doubt the company’s ability to expand its business. .
A driver in the company’s busy Philadelphia area estimated that about one-third of her salary from Gopuff was lower than her calculated take-home salary. She said that the company once owed her about $800 in arrears. Drivers in other cities said that this practice is also common in the local area. They asked to discuss sensitive internal issues anonymously.
Gopuff has a system for drivers to compete with company representatives for their salaries, and when a dispute arises, Gopuff usually pays the difference. But the drivers said that it may take several weeks for the replacement pay to appear in their bank accounts.
The company cut the minimum guaranteed wage for drivers shortly after raising $1 billion from investors such as Blackstone, so it has already faced strong opposition. Payment errors are a more common complaint among drivers, which may be a problem for Gopuff as it tries to expand its business globally.
The warehouse manager who handled these compensation complaints stated that fixing each complaint is a time-consuming process and a symbol of Gopuff’s inefficient operations. This problem may get worse as the scale increases, and hinder efforts to make the business sustainable—and disrupt relationships with contractors and other workers.
“Gopuff is committed to creating the best delivery partner experience,” a company spokesperson said. “As we grow, we continue to invest in our communication channels with delivery partners, and actively work to strengthen delivery partners’ communication, applications, customer support, websites, etc.”
Gopuff said it has been able to expand its business to more than 500 warehouses across the United States, and that the company refutes the view that the issue of driver compensation has been an obstacle.
In other parts of the gig economy, it is relatively unusual to provide supplementary pay for drivers and other workers. Drivers from ride-hailing companies such as Uber and Lyft occasionally dispute their wages, but this is usually because technical failures are rare.
The problem with Gopuff is that, unlike the ride-hailing service, which pays drivers mainly through a combination of distance and time spent in the car, its system is more complicated. The company pays drivers through fees paid for each piece of luggage delivered, promotional fees paid on top of these fees, and a one-time bonus for luggage delivered during busy periods.
In addition, if the driver signs up for a specific shift, Gopuff will guarantee the driver’s minimum hourly wage. The company calls these minimum subsidies and is the fuse of the tension between the driver and the company. Gopuff recently cut these subsidies for warehouses across the country.
Due to this complex system, drivers often pay close attention to their delivery and intercept their completed orders. If their weekly payroll or the money into their account is lower than their calculated income, the driver can file an objection.
A manager working at Gopuff’s warehouse said that the process of handling these claims was chaotic. A former warehouse manager said that in many cases, the salary of every driver in the warehouse was wrong, and the company had to compensate the driver in the subsequent salary. The person, who asked not to be named, said that the company tried to pay extra cash in the next paycheck, but it sometimes took longer.
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Post time: Oct-19-2021