By Amir Khafagy, New York Focus
This story was published in partnership with New York Focus, an investigative news site covering state and city politics. Sign up for their newsletter here.
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.”
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.
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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 fundingled 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.
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.”
In a lawsuit he filed against Buyk last month, Carse alleged that he regularly worked between 48 and 56-hour weeks without receiving overtime pay, was not given almost any of his tips, and was not given legally required wage statements.
Standing outside of Buyk’s Upper East Side warehouse, where he had traveled in March to look in vain for a manager to ask about his wages, Carse described feeling abandoned by a company that he worked hard for since its beginnings.
“I ride here from the Bronx,” he said. “Sleet, snow, like the postal service, carrying bags where shit was heavy, going to 66th Street in the snow. Like seriously. So it really hurts that people who actually worked and paved the way for the company got penalized for it.”
Workers employed directly by Buyk have also complained about issues with their pay. Online employer review platforms like Glassdoor and Google Reviews are full of complaints about late checks and outright wage theft.
In a December interview with Wired, Walker, the Buyk CEO, attributed many of the allegations of paycheck irregularities on online forums to the company’s “growing pains.”
One of the Buyk employees who left a negative review is Jose Bess, a 56-year-old who began working at Buyk’s Lower East Side location in November.
Before he started working at Buyk, Bess had a day job as a mailroom manager and worked part-time as a driver for UberEats. What originally attracted him to Buyk, he said, was the $17 an hour pay, good benefits, and direct employment. He had been an independent contractor for UberEats, but now he was promised a steady paycheck as a Buyk employee.
After his first week of work, he said, he checked his account and found it was empty. A manager told him that a payroll glitch had delayed his paycheck. Jose did not receive a paycheck the next week either. That Friday, he confronted his manager, and the conversation turned heated.
“The manager tells me if I don’t like it, I can go home,” he said. “I was like, what? Then the street came out of me. I cursed him out and everything.”
The manager ordered Jose to go home. Two days later, he received a text message informing him that he had been fired.
“I told him, ‘How do you have the audacity to fire me and not tell me what was going on with my check?’” he said.
Buyk eventually paid him for a first week’s worth of work, but then stopped returning his calls. Jose also claims that Buyk promised him a 401k plan, but never delivered.
“When I started, I asked about the 401k, they said they don’t even have that yet even though they said they have 401k matches. I was like wow, that’s false advertising right there,” Jose said.
On December 3, he filed an official complaint with the state Department of Labor accusing Buyk of wage theft.
In retrospect, Jose wishes that he had paid more attention to rumors from other employees about Buyk’s payroll practices.
“I tried to give this company the benefit of the doubt, not believing what these people were telling me about not getting paid on time, HR saying they forgot to put the payroll in, and all that,” he said. “I was trying not to believe it. But I got to believe it because it’s happening to me right now.”
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.
Councilmember 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.
“We’re talking about eliminating the 15-minute window so that people don’t feel pressure, because right now it’s such stress and they run red lights, they go on sidewalks,” Marte told New York Focus. “They are doing it because they have to do it for their work. When the average person sees it, they think they are being unsafe, but they have to be unsafe.”
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.
“The company really doesn’t care about us,” he said, “when we take care of the whole company.”
New York Focus is a nonprofit, nonpartisan newsroom covering state and local politics in the Empire State.