New York may soon be joining the growing list of global cities looking to regulate 15-minute delivery services funded by massive venture capital investments out of concern for their effect on the urban landscape and potential labor abuses.
New York City council member Christopher Marte, who represents District 1 in lower Manhattan, is in the “very preliminary stages” of introducing legislation that would “address the labor concerns with these companies, as well as their impact on New York's beloved bodegas,” he told Motherboard. The potential for legislation regarding ultrafast delivery services was first reported by the New York Post.
In October, Manhattan Borough President Gale Brewer sent letters to various city agencies inquiring about the legal status of these operations which fall somewhere between warehouses and retail operations.
Marte, who said his father used to own a bodega, is motivated in part to protect bodegas from predatory pricing by VC-backed startups.
“With the impact of the pandemic, as well as rising rents, bodegas are already facing many financial hurdles,” he told Motherboard in an email. “Now these VC-backed delivery apps are offering lower prices (because they aren't looking to make a profit for 5-10 years) and door-to-door delivery. They also take up valuable storefront space while offering no sense of community to the neighborhood, unlike bodegas.“
Ultrafast delivery companies like Gorillas, Jokr, and GoPuff are facing increasing government scrutiny at the same time as profits for their services are failing to materialize. The Information reported Jokr is looking to sell its New York operations to a competitor in the face of losses of some $150 per order, which Jokr denies. And GoPuff, in an attempt to prove its storefronts are not warehouses and avoid regulatory scrutiny, have claimed its New York locations will also sell directly to walk-in customers, although the New York Post found even such “retail” locations are unmanned and have no prices listed on items.
At least in the U.S., these ultrafast delivery services may face an uphill battle to avoid more stringent regulation and the enforcement of existing zoning rules to pressure them to vacate prominent locations. The growing feud between politicians and startups has been likened to the Uber wars of the mid-2010s, such as the infamous battle between Uber and former mayor Bill de Blasio who sought to more heavily regulate the rideshare industry to no avail. But, at least at this stage, these ultrafast delivery companies lack the passionate, loyal customer base Uber successfully mobilized against de Blasio, perhaps because even people who avail themselves of the delivery services recognize it is not that much different than going downstairs to get a pint of ice cream yourself.