EatStreet to lay off 26 drivers amid shift to third-party delivery services

MADISON, Wis. — Madison-based food delivery platform EatStreet plans to lay off more than two dozen of its drivers as it shifts to using third-party delivery services.

In a notice filed with the Wisconsin Department of Workforce Development on Wednesday, the company said it anticipates laying off 26 employees as part of the move. Those layoffs are expected to start on or around Aug. 21.

In a statement to News 3 Now Thursday afternoon, EatStreet said it has “found it difficult to maintain” its model of using its own drivers rather than contracting with third-party drivers.

The move, the company continued, “puts us in a better position to compete in the future and allows us to offer expanded delivery hours and broader coverage for our restaurant partners.”

This week’s announcement is the latest hurdle for the company, which got its start in 2010 and currently operates in more than 250 U.S. cities. 

Drivers brought a class-action lawsuit against EatStreet in 2020 for unpaid wages and damages, accusing the company of paying below minimum wage and not reimbursing drivers for their expenses.

Both sides reached a $1.2 million settlement agreement in the case, but in a December court filing, EatStreet said it was unsure if it could honor its obligations, saying its financial circumstances in the previous three months “ha[d] deteriorated rapidly due to multiple factors.”

A court order last month approved the settlement and laid out a timeline as to when EatStreet would have to pay the amount agreed to.

more

Leave a comment

Your email address will not be published. Required fields are marked *