Grocery delivery startup Dumpling takes on Instacart

Dumpling grocery delivery

  • Grocery delivery startup Dumpling aims to turn grocery shoppers from gig economy workers into small business owners.
  • Co-founder Joel Shapiro: “Personal shoppers set their own schedules and pricing, and keep 100% of their tips — earning on average three times more than Instacart workers.
  • Dumpling secured $6.5 million in Series A funding in June in an investment round led by Forerunner Ventures.

As demand for grocery delivery services continues to surge during the pandemic, alternative business models are already disrupting the new industry sector.

Many take aim at the corporate gig economy model that so far has dominated food delivery, with the new entrants targeting locally- owned or shopper-centered platforms.

A case in point is MilkRun, a Portland, Oregon-based outfit that pays small farmers and producers to deliver their own goods locally. The company has seen its business surge 11-fold since the coronavirus lockdowns started in March.

Another new platform, Dumpling, claims to offer a more equitable and ethical model by turning grocery shoppers from gig economy workers into small business owners. 

The startup, based in Seattle (home of Amazon and its in-house grocery delivery service, Amazon Fresh) is riding the wave of concern over worker conditions at Instacart and other big-name delivery services, as employees and contractors call for better wages, benefits and protections from the coronavirus.

Founded in 2019,  Dumpling powers more than 2,000 grocery shopping and delivery businesses across the United States. The startup secured $6.5 million in Series A funding in June in an investment round led by Forerunner Ventures — a new partner — as well as existing investors Floodgate and FUEL Capital. 

Floodgate was a seed investor in both Lyft and Taskrabbit. 

On the heels of that raise, Dumpling co-founder and co-CEO Joel Shapiro participated in an email interview with FreightWaves. He talked about the problem the company aims to solve, shopper compensation and why the economic climate is ripe for grocery shoppers to become small business owners.

On the Dumpling mission

“Traditional gig workers today are disenfranchised, with no control over how and when they work, and are at the mercy of a company’s compensation, tip and safety measures. Dumpling turns this model on its head by empowering individuals from gig workers to traditional employees to be their own independent grocery shopping and delivery business owners.”

How Dumpling benefits consumers

“For consumers, Dumpling transforms the experience — allowing people to choose their shoppers, access more stores than is otherwise possible, receive customized service and pay in-store pricing. “

How Dumpling makes money

“There’s a $10 fee to get set up, which gives shoppers access to a Dumpling credit card, a listing on the company’s website, a personal web page for their business, access to the Dumpling Boss app, and Dumpling’s ZIP code-fueled shopper search tool. In addition, shoppers pay either a $39 monthly fee or a $5 per-transaction fee each time they book a job. Dumpling adds a 5% fee onto customer orders for payment processing.”

On shopper compensation 

“Personal shoppers set their own schedules and pricing, and keep 100% of their tips — earning on average three times more than Instacart workers. Dumpling shoppers are well-positioned to create amazing client experiences that often result in larger orders than gig economy apps and in repeat orders as shoppers build great client relationships.”

How the team’s personal experience as Instacart shoppers informed the business model

[To learn more about the shopping experience, Shapiro and his two co-founders became Instacart workers themselves.]

“We launched Dumpling to explore what we can do to help more people gain greater control, autonomy, and flexibility over the way they work. When we set out to find an answer, we didn’t know we’d eventually be taking on the gig economy. But that’s where the question led — directly to the thousands of independent contractors who felt underpaid, exploited, and taken for granted by on-demand grocery delivery apps. 

“We realized that the only thing standing between these workers and the ability to start their own personal shopping and delivery companies was access to the right technology. So we built it for them. In addition to the empowerment to start, run and grow their own businesses, Dumpling provides a support group, business coaching and other tools to help business owners deepen their relationships with their clients and maximize their earning potential.”

On fundraising

“We are focused now on supporting our growing corps of business owners and their clients, and are exploring multiple options for the future.”

[Instacart’s most recent funding round, also completed in June, brought in $225 million, boosting its stock valuation to $13.7 billion.]

On the current moment

“The time is now for more Americans to take hold of a business ownership model. With tens of millions now unemployed due to the pandemic, there is a real opportunity to join the ranks of business owners who have already benefited from the flexibility, control, financial gain and support of the Dumpling platform and community.”

“Whether laid off employees or frustrated gig workers, thousands are striking out on their own, running their own businesses, and building financial security for themselves.”

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