The coronavirus pandemic has made grocery and food delivery workers essential while exposing the inequities and shortfalls of an on-demand workforce left out of a social safety net built on traditional employment.
Federal and local governments are responding by adopting new benefits and protections for gig workers. Meanwhile, a Seattle and Berkeley, Calif.-based startup is attempting to provide grocery delivery workers more autonomy through a new business model.
Dumpling provides technology and support to help entrepreneurs establish their own, independent grocery businesses. They are responsible for setting rates, finding customers, and determining their hours and service areas. Dumpling provides an app, website, and credit card. Business owners can either pay a monthly subscription charge or $5 per service fee to Dumpling. Customers pay a 5% fee to use the platform.
Dumpling announced a $6.5 million funding round Wednesday, led by Forerunner Ventures with participation from Floodgate and Fuel Capital. The round brings Dumpling’s total funding to $10 million. Investors have been flocking to grocery delivery startups as customers shift their shopping habits during the pandemic.
Dumpling’s model is similar to Amazon’s Delivery Service Partner program, in which the tech giant provides support for delivery drivers to establish independent businesses. The approach gives business owners more control and flexibility, but it comes with risks. Take-home pay is typically higher than traditional gig workers, but the onus is on the business owner to find customers and build a profitable operation.
Dumpling provides infrastructure for more than 2,000 grocery businesses across all 50 states. The company says order volume has surged 20X since the start of the pandemic.
“Traditional gig workers today are obviously disenfranchised,” said Nate D’Anna, co-CEO of Dumpling. “They have no control over how and when they work and they’re at the mercy of a company’s compensation, tip, and safety measures. We’re turning that model on its head.”
Dumpling has 12 full-time employees split across Seattle and Berkeley. D’Anna oversees the Berkeley office and co-CEO Joel Shapiro helms the Seattle office. They co-founded the company with CTO Tom Schoellhammer.
Dumpling’s chief rival, Instacart, is seeing skyrocketing demand for its services during the pandemic. The company raised $225 million in new funding this month, propelling its valuation to nearly $14 billion. It is also dealing with strike demands from its contractors.
Amazon’s grocery delivery business has also been inundated with orders since the start of the coronavirus crisis is as thousands of customers shift their shopping habits to avoid exposure to the virus.
