EatStreet is a local food delivery service. How did this company begin?
Matt Howard and Alex Wyler, along with a third cofounder, met in their freshman year at the UW-Madison and launched its first food delivery website. Seven years later, in 2018, EatStreet had raised over 37 million dollars. Launched in 250 markets and now delivering to more than 1.7 million customers, EatStreet moved to dominate delivery in mid-level markets. Howard and Wyler were named to Forbes “30 Under 30” list, in recognition of Howard and Wyler as high achieving young entrepreneurs and philanthropists.
Today this success story is floundering. In a story first reported on Saturday, by Samara Kalk Derby in the Wisconsin State Journal, court filings reveal that the company can no longer pay a 1.2 million-dollar settlement with its delivery drivers. The drivers allege that EatStreet violated the Fair Labor Standards Act and Wisconsin wage law when it failed to reimburse drivers for vehicle and mileage expenses and when it used tips to meet minimum wage requirements.
The mediated August settlement reached with the drivers includes only a fraction of the attorney fees sought by the drivers. According to reporter Derby, EatStreet’s lawyers no longer believe it can honor the agreed-upon obligation. Attorneys for the drivers allege that EatStreet is delaying the matter. EatStreet has not filed for bankruptcy.
Several Dane County landlords sued EatStreet. EatStreet’s primary creditor intends to foreclose on its remaining assets.
However today, through its website EatStreet dot com, customers can order delivery and apply to become drivers.
Reporter Natalie Yahr, writing this week for the Capital Times, described more than 3.6 million dollars in forgivable loans received by EatStreet through the federal Paycheck Protection Program. These loans were forgiven by June 2021.
Labor Radio will report more on this unfolding story of wage theft.
Report by Carol Weidel. Photo Courtesy Yuri Krupenin on Unsplash. Web production by Anyu Li.