Grocery delivery giant Instacart is facing new competition in the supermarket aisles — including from its own workers.
A startup called Dumpling secured nearly $5 million in funding this month as it challenges Instacart — as well as rivals Doordash and Postmates — including by poaching their veteran workers who deliver groceries to customers’ homes.
Dumpling has been attracting workers by tapping into “gig economy“ frustrations. At Instacart, that has meant being subject to complicated algorithms that penalize workers for not producing fast enough, nabbing their tips and lowering their base pay without notice, as happened in November when Instacart workers suddenly earned as much as 50 percent less due to changes in the payment policies.
Instacart has since reversed that policy, but the experience soured many workers and made them receptive to other offers.
Promising to treat them better by allowing workers to set their own delivery fees and to keep their tips, Dumpling has already signed up some 500 shoppers — mostly ex-Instacart workers — without a marketing budget.
Some continue to work for Instacart while they build their own customer base, since Dumpling allows the customer to have the same shopper each time they place an order, unlike at Instacart.
The majority of Josephina Nelson’s customers, for example, were Instacart customers, the Black River, NY-based shopper told The Post, though she said she has not actively marketed the service to Instacart customers.
Dumpling co-founder Joel Shapiro, a former National Instruments executive, said Dumpling discourages its shoppers from “putting business cards in [Instacart] delivery bag.”
But Shapiro has no problem punching at the $7.6 billion unicorn on the individual websites Dumpling sets up for its shoppers, pointing out that Instacart marks up customers’ bills by more than 20 percent while Dumpling has no “hidden” mark-up fees.
Dumpling also includes the shopping receipt in its orders unlike Instacart.
It’s early days for the fledgling delivery company, but “Dumpling could surprise a lot of people with its growth,” said digital consultant and former Amazon executive Brittain Ladd. “It’s the first company to create a platform and business model for online grocery fulfillment and last mile delivery that retailers and consumers have been looking for,” he said.
But even its shoppers say that there’s room for improvement.
“Consumers find it difficult to navigate,” because the platform does not link to retailers’ websites and not every item someone may want is listed on the Dumpling platform, conceded Nelson.
“Customers can write notes on their orders if they don’t see what they want,” she said.
The new funding will go toward improving the technology, Shapiro said, and toward social media.