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Rapid Delivery Startups Drawing Criticism Over Apparent Flouting Of Zoning Laws

Urban grocery delivery startup Jokr has expanded rapidly in the U.S.

Members of the New York City Council are looking for ways to curb the “dark stores” that serve as warehouses for the rapid delivery companies spreading rapidly across the city. 

Twelve city council members wrote a formal letter to the Department of Buildings last week, stating that many of the dark stores operate outside of the zoning regulations in place, Politico reports. The council members demanded that the department take immediate action to enforce zoning regulations, which they say app-based rapid delivery companies such as GoPuff, Gorillas and Jokr violate.

Dark stores — nicknamed for the fact they fulfill online retail orders but are closed to in-person shopping — have seen a meteoric rise in NYC over the past two years. Many of the stores' windows are papered over to stop passersby from looking inside.

According to an interactive map developed by Council Member Gale Brewer, who worked with civic tech group BetaNYC to show warehouse locations and their zoning, there were 115 dark stores across the five boroughs as of February. 

More than 90 of the stores are concentrated in Manhattan and Brooklyn, and as many as 81% of them are operating as warehouses in areas zoned for retail and commercial uses, according to the BetaNYC tool.

“If you’re a warehouse, you need to be in a warehouse district,” Brewer told Politico.

Brewer previously targeted rapid delivery apps late last year, at the end of her time as Manhattan borough president, on similar grounds. The micro-fulfillment centers have been politically unpopular, according to Politico, due to concerns that they could run traditional bodegas out of business and weaken foot traffic in retail corridors

This newest hurdle — made in the form of the council members’ letter addressed to NYC Buildings Commissioner Melanie La Rocca, City Planning Director Dan Garodnick and Consumer Affairs Commissioner Vilda Vera Mayuga — might not end up generating much pressure beyond the public coverage.

A DOB spokesperson told Politico the agency believes micro-fulfillment centers require a new type of zoning that doesn’t exist under current regulations. The department is actively partnering with other agencies to create an appropriate zoning district for the app-based businesses, Andrew Rudansky said.

However, the apps have faced skepticism from the business world in addition to regulatory uncertainty. Venture capital firms were still waiting to see a return on their investments in early January: The Wall Street Journal reported that few, if any, of the companies had managed to yield a profit.