Before the Russian-funded delivery startup collapsed, Buyk sold itself as a way for workers to escape the gig economy. Former workers say it failed to deliver.

In early March, 28-year-old Michael Perez received an alarming email from one of his co-workers at Buyk, the Russian-funded, New York City-based ultra-fast grocery app.

Because of the severe sanctions against Russia, the letter announced, the company had lost access to its investors and was forced to furlough 98 percent of its workforce. For Perez, the letter was just one more disappointment in a long string he had experienced working for the company.

Prior to its abrupt closure, Buyk was one of the largest and most rapidly growing ultrafast grocery delivery apps in New York City, promising its customers deliveries in 15 minutes or less.

Three former Buyk workers said that the company delivered something else: wage theft and mistreatment. Two of the workers accused Buyk of misclassifying them as independent contractors instead of employees, stealing their tips, and failing to provide them pay stubs. The third accused the company of failing to pay his full wages and firing him when he complained.

Buyk’s PR representative, Tom Kiehn, and lawyer, Mark Lichtenstein, both declined to comment for this story.

Rise of an Industry

The pandemic has been a boon for ultrafast grocery delivery companies, which have exploded in number in New York City since 2021. Venture capitalists have showered billions on these startups, which promise to deliver everything from six-packs of beer to extra creamy cashew milk in 15 minutes or less.

When Buyk first entered the New York market, some observers raised questions about the viability of its business model, noting that the company relied on low-paid labor.

“A big challenge will be that it’s impossible to use such a cheap workforce in New York as they’re used to in Russia,” Boris Ovchinnikov, co-founder of the Russian research firm Data Insight, told Bloomberg.

Buyk promised that it would use a different model, investing deeply in labor development. Unlike Samokat and previous gig economy startups, which relied on contract workers, Buyk said it would hire full-time staffers and deliver them benefits like medical insurance, commuter compensation and a 401K plan.

Broken Promises

Perez first learned about Buyk last August, when he spotted an appealing online ad for bike couriers. The ad, placed by a company called Food Start, offered a flat rate of $17 per hour, flexible working hours and the opportunity to work from a single location.

Perez found the job more difficult than he expected. Management prioritized delivery speed over couriers’ safety, he said, and several of his co-workers were hit by cars as they were out making deliveries. Couriers were asked to deliver groceries that exceeded Buyk’s maximum order weight of 26 pounds, he added, which made it difficult for them to deliver the orders on time.

At the end of each week, Perez would text his manager with a timesheet showing his hours worked. According to a lawsuit Perez later filed against both companies, he routinely worked forty-five hours per week, but never received overtime pay. The lawsuit also alleges that Buyk improperly classified him as an independent contractor instead of an employee and illegally withheld his tips.

Regulating The Industry

The rapid growth of the ultra-fast delivery industry has led many small business owners and elected officials to fear that the industry could undercut the city’s bodegas and corner stores, the same way that Uber and Lyft devastated the yellow cab industry.

New York City Councilmember Gale Brewer has called for the city to investigate whether Buyk and other ultrafast delivery companies’ “dark stores” are violating zoning rules. She argues that since the stores are not actual stores but are mini-warehouses, they should not be located in commercially zoned districts.

Council member Christopher Marte recently announced his intention to introduce a bill to prevent grocery apps from advertising 15-minute delivery times, as well as to limit the weight of groceries workers have to deliver.

Upon hearing the allegations against Buyk, Marte stressed the importance of recognizing workers as employees of the companies they work for.

“We want to make sure their employers see them differently from gig workers because they’re employees, unlike Uber or Lyft workers that go to and from different points,” he said. “ They should be employees and have the benefits and protections employees have.” 

Now out of a job, Perez has found himself right back where he started. He still gets emotional when he reflects on how much he gave to Buyk and how little he has to show for it.

This post originally appeared at In These Times on May 11, 2022. Reprinted with permission.

About the Author: Amir Khafagy is a journalist, activist, organizer and performer. His work has been featured in CityLab, Jacobin, City Limits, The Indypendent, Counterpunch and The Hampton Institute. He is currently completing an MA in urban affairs at Queens College.