Tempers flare as Gopuff slashes driver pay at warehouses around its Philadelphia headquarters ab

Publish date: 2024-07-25
2021-08-09T14:02:25Z

In recent days, Gopuff drivers across Philadelphia received notes that they were about to get an hourly pay cut — down around 30% for at least one warehouse, according to multiple Gopuff drivers and emails reviewed by Insider. The drivers say the move is part of a continuing decline in driver pay at the company's oldest and busiest locations.

Tensions have been running high between drivers and Gopuff managers in the area, with the drivers complaining that the company has been shortchanging them and refusing to hear their demands for more consistency and clarity about how much they're set to make on a shift. 

Tempers flared in a company-run online chat room where drivers communicate with each other and management at the warehouse. The company later blocked workers from entering the room. One driver who spoke out said his contract was terminated the next day.

"Given the fast moving nature of our industry, we will make adjustments to partner compensation to balance a continuously changing supply and demand dynamic in each market we serve," a Gopuff spokesperson said. "This is industry standard and we do so to work to ensure our delivery partner earnings are not adversely affected. We will continue working to communicate any changes clearly, transparently and proactively to our delivery partners."

The debate around driver pay is playing out at the same time that the convenience store delivery service has been on a torrid growth spurt, raising capital, staffing up its corporate ranks, and planning international expansion. The scheduled date when Philadelphia-area drivers are set to receive a pay cut comes about a week after Gopuff announced it raised $1 billion in fresh capital, pushing its valuation to $15 billion.

Unlike other gig economy companies like Uber, Instacart and DoorDash, Gopuff drivers have more direct interaction with the company. Throughout the cities where it operates, the company runs mini warehouses stocked with items such as pretzels, ice cream and alcohol. Drivers typically sign up for shifts, wait in line outside the warehouses to be given bags to deliver, and interact there with managers. 

The pay issues for drivers in the Philadelphia area may be a particularly painful one because the region is one of the oldest and most lucrative in the company's network. Gopuff was co-founded in 2013 by two students at Philadelphia's Drexel University. Its headquarters remain in the city, and one of its busiest and oldest warehouses is in the Ludlow neighborhood.

Gopuff cofounders and co-CEOs Rafael Ilishayev and Yakir Gola Gopuff

Pay for Gopuff drivers is a complicated mix of hourly wages, one-off incentives and customer tips. Typically drivers who sign up for shifts are given fees for each bag they deliver, plus occasional promotional incentives. They also can receive a guaranteed subsidy to ensure they make a minimum amount if orders are slow during a shift. Customer tips are extra, though drivers say they're fairly small given that order sizes are small and Gopuff customers are often college students.

At its best, a few years ago, driving for Gopuff was a fairly lucrative gig-economy option. Some drivers say they've been able to consistently earn well over $1,000 during a weekend. One said he quit his full-time job as an HVAC technician because the Gopuff money was better. But they say payouts have fallen by more than half in recent weeks. 

This week, drivers working out of a warehouse in the Passyunk Square neighborhood of Philly received an email that said their wage, known internally as a "subsidy," was dropping from $12 an hour to $8.50. In the email and correspondence between Gopuff drivers and a driver-operations manager, the company explained that the higher $12 rate was only temporary, but implied that the increased efficiency in its operations (i.e. more bags delivered) would make up for any losses in driver wages.

But drivers working from this warehouse and others in the Philadelphia area told Insider that their pay has gone down substantially, chiefly because more drivers have been coming to the warehouses, spreading the bag bonuses across a larger group. Some who had been making more than $1,000 over a weekend said they are now making about $400 or less. Drivers in the Ludlow warehouse also complained that some drivers were being given larger bag delivery bonuses than others. Gopuff representatives responded that some drivers had been given different incentives to ensure that all drivers had an opportunity to earn a fair wage.

Earlier this week, after the email about lower pay, drivers working at the Passyunk warehouse began discussing the issue with each other through a company-run chat app. One driver, Joseph Smith, suggested starting a revolution or a riot, according to online chat records seen by Insider. Another mentioned that she was a union delegate at her other job; drivers began exchanging numbers in the app to discuss the matter directly. The company then blocked all the drivers from the chat room, according to the drivers.

The next day, Smith said he received an email from the company informing him his contract with Gopuff had been terminated. In an interview with Insider, he said he had gone from getting paid $11 for each bag he delivered for Gopuff a few years ago to around $3 a bag now.

As some Gopuff drivers in the region agitate for better pay, others have been meeting with worker advocacy groups. One group, Working Washington, has organized online information sessions with Gopuff drivers around the country. They've released a public letter listing demands, including increased hourly pay, better flexibility, and more specific requests for the company around worker terminations.

It's unclear where the driver unrest in the Philly region will head. Some are informally discussing public campaigns about their situation, or even organizing a driver work stoppage to protest. Others are considering shifting to other gig work. Two drivers at a Philadelphia area warehouse heard from another worker that the pay was better at Instacart, and were considering going there.

Are you an insider with insight to share? Got a tip? Contact this reporter via email at tdotan@businessinsider.com or Twitter DM at @cityofthetown.

Watch:

ncG1vNJzZmivp6x7o8HSoqWeq6Oeu7S1w56pZ5ufonyou8%2BunZ9lk6rBtHnDq6CvnaJivaLFjKmfoqSRmbKtvMeimGavkaeyqbvUrJysZZSntrex0axkpq2coXqxvs6tnKysXaq7qrvNZmlpamFihQ%3D%3D