Workers Accuse Ultra-Fast Delivery Startup of Wage Theft

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.

“I was at a loss of words, to be honest,” said Perez, who worked as a delivery person. “I try to make the best with the company, but I just kept getting disappointed.”

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

Three former Buyk workers told New York Focus 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.

As of February, there were at least seven different companies competing against one another in the space, and the six largest companies — Getir, DoorDash, Gopuff, Gorillas, Jokr, and Buyk — had received a combined $5.5 billion in VC funding.

They’ve used these funds to scavenge the vacant retail spaces that the pandemic left behind, transforming empty storefronts into so-called “dark stores”: micro-warehouses storing items for bike couriers to deliver to nearby customers.

The United States is a relative latecomer to ultrafast delivery, and a number of the current leading players in the market began overseas. Jokr and Gorillas are German start-ups, while Getir is a Turkish company and Buyk is a spin-off of the Russian grocery delivery company Samokat.

Buyk launched in the New York market in 2021 with $46 million in seed funding led by Russian venture capital fund Fort Ross Ventures. The company was founded by Russian nationals Rodion Shishkov and Slava Bocharov, and a majority of the company is controlled by a joint venture of the Russian state-owned bank Sberbank and Russian technology company VK.

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.

“I don’t think that dedicated, passionate employees are necessary to be in the ultrafast grocery business, but I think they’re necessary if you want to win, and we’re very committed to winning,” Buyk CEO James Walker told Wired a few months after launch.

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 said that a few weeks after he responded to the ad, a representative of Food Start contacted him and told him he would be working full-time for Buyk. In September, he began working at a Buyk “dark store” located on 88th Street on the Upper East Side.

But Perez was not technically an employee of Buyk; he was an employee of Food Start who worked as an independent contractor for Buyk.

Food Start could not be reached for comment, as its phone number is no longer in service and it did not respond to emails.

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.

“When it’s heavy loads and there are only three or four couriers and we are getting ten plus deliveries every ten minutes, we are scrambling for time and we get backed up,” he said.

Although Perez had only been hired to make grocery deliveries, Buyk managers would also ask him to do work around the warehouse, including inventory, cleaning and light maintenance work, he said.

“When I say we took care of everything, we did everything, on top of deliveries in 15 minutes or less,” he said.

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.

When Perez complained to Buyk’s HR department about the lack of overtime and tips, he said, the company blamed Food Start. But when he complained to Food Start, the company blamed Buyk.

“I got tired of them just giving me the runaround,” he said. “They told me to speak to my [Food Start] manager about the tips. When I spoke to my manager, he told me he had nothing to do with our tips.”

Perez’s co-worker Lorenzo Carse, who was also hired by Food Start, told New York Focus that he had a similar experience.

“It’s been going downhill ever since I started,” he said. “For Food Start people, they were sitting here messing with our money, with our tips. They were giving us the monkey business when one minute, I had to go to my manager to get my hours confirmed and then I gotta sit here and talk to the person at Food Start to make sure my hours were put in. And when I talk to Food Start, they told me I had to talk to my Buyk manager.”