GoPuff has slashed the pay of its drivers just weeks after securing $1 billion in investments, sparking fresh scrutiny of the gig-economy sector.
The rapid delivery giant, which purchased UK rival Dija earlier this month after just eight months of operation, has reportedly cut pay rates for its gig-economy workers to levels which fall below minimum wage in some cases.
Since the start of the year GoPuff, which was launched by former Deliveroo employees, has seen its valuation triple achieving a valuation of $15 billion during its latest funding round.
According to a report from the Financial Times, citing research from non-profit organisation Working Washinton, GoPuff has reduced its drivers minimum hourly earning guarantee.
As is commonplace in the sector, GoPuff drivers have no guaranteed hours and take commission on every delivery they make.
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GoPuff does however allow drivers to book a “shift” with a minimum hourly earnings guarantee, see the company top up their commission if it does not meet an hourly minimum wage which is usually around $3 per trip.
Working Washington, which gathered data from 71 GoPuff locations across the US, says minimum hourly rates have now plummeted by an average of $4 per hour.
In Dallas, Texas, drivers saw their minimum hourly rates more than half from $20 to just $9.
GoPuff said that the previous hourly rates were only “temporary” and represented increases it put in place during “operational changes”, therefore calling it a pay-cut was misleading.
“Given the fast-moving nature of our industry, we will make adjustments to partner compensation to balance a continuously changing supply and demand dynamic in each market we serve,” Gopuff said.
Despite this, the rates in 16 locations dropped below the levels seen before the pay increase, and drivers said there was “no information about how long it would last or when it would end”.
Deliveroo, the UK’s leading rapid delivery company, also recently faced major scrutiny of how it pays it drivers, after a damning investigation found many were being paid below minimum wage.