Throughout the COVID-19 pandemic, third-party delivery apps have come under increased scrutiny for high fees charged to restaurants and its treatment of drivers. In Seattle, city officials enacted a 15 percent cap on fees and a hazard pay mandate for gig workers this summer to help keep things in check, even as companies such as GrubHub and Uber Eats resisted both efforts.
Now, a new app based in Seattle called Runner has arrived on the scene, claiming to offer an alternative that’s better for both businesses and workers.
Runner launched in June, and functions like many of the other third-party delivery apps: a selection of local restaurants are organized by cuisine, and diners can choose items and order directly from the app. There are service and delivery fees charged to customers on each order, but the app doesn’t charge any fees to restaurants and lets its drivers set their own wages based on time working, rather than per delivery.
There’s also a function on the app that allows for “customized delivery,” which means a user can request any delivery task (like, say, going to the hardware store for supplies) and see if a driver is available to get it done. On its website, the company says that drivers can make up to $29 an hour, plus tips.
Even with the broader delivery scope, it appears Runner’s main focus is restaurants. CEO John Rood tells Eater Seattle he came up with the idea for the app when he first moved to the area from California last year and started spending large sums of money on takeout every week.
“I realized that I was hurting restaurants every time I was spending there, and I felt guilty about it,” he says. “Out of every $100, like $45 was going to the delivery app. And I was thinking, ‘Man, that’s just a giant chunk of the equation.’”
Rood started working on a business model that would eliminate those charges that hurt restaurants and rely solely on service fees to customers. In Runner’s case, diners pay around a 12 percent fee on each order amount, plus the delivery charge, which is more or less in line with costs from other apps.
“If DoorDash and Uber Eats and Runner can all offer delivery from the same exact restaurant, you’re getting the same exact food in the same amount of time,” Rood says. “The only difference is, if you were to order that on Runner, you’d be helping out your community a lot more. We’re taking less profit. But that’s actually something that I think this market needed to evolve into.”
Right now, Runner is only available for King County, but is looking to expand within the next 6-9 months to possibly New York, San Francisco, and Chicago. Rood says the app pulls menu information from businesses online, and has a team in place to confirm that each spot actually offers takeout (something that third-party apps have run into problems with before). As is the case for many startups, there have been a few kinks to work out, like the app listing the wrong hours and menu items for restaurants, and its inventory not being as robust as other apps on the market. But Rood says they’re continuously working on fixing any glitches and adding more restaurants.
As for the “set your own wage system” for drivers, that’s another element Rood feels will have appeal. For one, there is no set geographical boundary from which one can order — if South Seattleites want food delivery from Ballard or areas further north, it may cost more, but that option is available. More importantly, gig workers can determine the rate they’re willing to work for during certain times. Rood says there is a base pay that’s taken from the average, and it has hovered around $18 per hour so far.
Runner driver Carl, who declined to give his last name out of privacy concerns, tells Eater Seattle that he does, indeed, make more money working for Runner than he does for deliveries through DoorDash and Postmates (almost twice the amount), even if the order volume isn’t quite the same right now.
But Carl also notes the lack of hazard pay as a potential issue. The newly-enacted Seattle law says that delivery drivers should get an additional $2.50 per delivery on top of their normal base pay, until the end of the city’s civil emergency during the pandemic. Rood claims that the mandate shouldn’t apply to his app, since it pays drivers for their time (not by delivery) and has a system in place to allow gig workers to set their own wages.
“If our drivers feel like conditions are hazardous, whether it’s because of smoke or COVID-19, they can raise their wage anytime they want,” he says. When asked directly about the hazard pay law, though, he says, “I really think it’s an inefficient way to protect these drivers. Really what you need to give them is their own power back.” (He then backtracks a bit and says government protections for gig workers “are important.”)
Sage Wilson, a rep for Working Washington — a labor advocacy group that helped formulate Seattle’s hazard pay bill — doesn’t agree that Runner would be exempt from hazard pay, if it meets certain requirements. “I can’t see why they would not be covered by the law,” he says. “I get how their model may be a bit different, but many different business models are covered by all kinds of labor standards.”
Runner still has only around 100 drivers on contract, which is below the threshold set by the hazard pay mandate (250-plus drivers). It remains to be seen whether Runner will need to fall in line with the rule if they increase that number (Eater Seattle reached out to city council members to get clarification, but did not hear back before this piece was published). Still, potential loopholes or not, the concept of giving at least a little more autonomy to drivers — and completely freeing up restaurants from parasitical fees, is an effort worth watching.
“They need to fix a few things,” says Carl. “But I do like the concept, and I do want them to succeed.”
UPDATED, September 21, 2020, 2:01: This item has been updated to note the number of drivers in relation to the hazard pay mandate for Runner, as well as cities planned for possible expansion.