Grubhub co-founder: ‘When you care about delivering a better product,’ don’t rely solely on the gig-work model

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I absolutely think it’s the right move to use a W-2 employee workforce when you care about delivering a better product to your customers.

— Mike Evans, co-founder of Grubhub and Fixer

Mike Evans co-founded Grubhub Inc., one of the top food-delivery platforms in the nation after DoorDash Inc.

and Uber Technologies Inc.’s

Uber Eats.

In his new book, “Hangry: A Startup Journey,” he recounts how conflicted he eventually became about Grubhub and the direction it took on its path to an initial public offering, including the company’s shift to using drivers it considers independent contractors. Before that, Grubhub simply allowed online ordering from restaurants that already offered delivery. For that and other reasons, Evans walked away from the company shortly after it went public in 2014, according to his book.

So it’s no surprise that in an interview with Yahoo Finance published Friday, Evans reiterates that he thinks the gig-economy model of only using contractors instead of employees is flawed.

“One of the things I would argue very strongly for is that your best drivers should actually be your employees… so you can deliver a differentiated product to the customer,” Evans said in that interview. “That the food gets there hot, gets there quick and gets there safely — these things matter to the customer.”

He contended that there is barely any differentiation between DoorDash, Uber Eats and Grubhub, and that the companies must compete against one another on marketing instead.

In 2017, Evans founded Fixer, an on-demand platform for finding handy people for when customers need things fixed around the house. Those people are trained employees of the company, not contractors, because he said “the quality of the work is a really important factor. And you just can’t control that within the contractor marketplace.”

Asked about whether he feels that way about ride-hailing drivers being considered independent contractors by Uber and Lyft Inc.

— a huge legal and regulatory issue in the country and around the world — he said yes.

See: ‘Gig work’ rule is in Biden administration’s crosshairs

“A hybrid model is the way to go,” Evans said in the interview, then went on to express his concern about gig workers. He acknowledged the workers can benefit from the flexibility being an independent contractor brings, but less so if they are doing gig work full-time.

He added: “The gig economy is great if it’s your side hustle. But if it’s a career choice… I’m not sure that if you work 40 hours a week for five years at Uber, if you’re in a better place than the day you started from a marketable-skills perspective.”

In his book, Evans also recounts getting disillusioned with the company’s venture capital investors pushing for Grubhub to take as big a cut from restaurants as it possibly could. He even considered leaving the company before the IPO, telling one VC that “the company is headed down a path I don’t agree with.”

European company Just Eat

bought Grubhub in 2020; the acquisition closed last year.

Also: Unions must reckon with racial inequality and speak to ‘a more marginalized workforce,’ former U.S. labor board chair says



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