With global cash, GoPuff grows past pot-friendly past; neighbors complain

The owners of GoPuff, which delivers convenience-store items to your home for a $1.95 fee plus tips, have been licensing new centers in its hometown of Philadelphia at the rate of one a month and many more in cities, suburbs and college towns across the U.S.

The rapid expansion is fueled by $750 million (with the promise of $250 million more) from the Japan-based Softbank Vision fund group last year. And that growth has forced some changes in the way goPuff operates in neighborhoods, and in its old image as a youth-friendly servicer of a pot-heavy lifestyle.

The company’s expansion has been rapid in its home base. New locations have sprung up in Germantown, Mayfair, Somerton, Roxborough, and Port Richmond, city records show. The site at 3801 Chestnut St. in University City faces the official residence of Penn President Amy Gutmann, and is near Drexel, where the company was founded by then-students Yakir Gola and Rafael Ilishayev in 2013.

GoPuff also runs sites in West Chester and other suburbs, and plans more in King of Prussia and Conshohocken, plus a 300,000-square foot, state-aided distribution center in Glassboro. Since last fall, the company has leased new sites in Alabama, Arizona, Oklahoma, Wisconsin, and several Texas and Virginia communities, among other states. The company employs more than 2,000, at more than 150 locations Unlike Uber or Lyft, it offers work to drivers who needn’t worry about driving newer cars that customers prefer, because they haul snacks, not people.

Some of those sites are in retail or industrial districts that are typically quiet at night, when goPuff traffic is heaviest. The West Chester location adjoins a day-care center in an industrial park, but goPuff staff say it doesn’t get busy there until parents have done pickups.

But one of GoPuff’s (and affiliate Go Beer’s) earliest centers, in the 400 block of North 12th Street in the Callowhill section, has alienated many neighbors.

With 50 warehouse workers, and dozens of drivers buzzing in and out, this complex has been a target of neighbors’ complaints since soon after it opened in 2017, replacing a storefront church and a design-firm office.

“The fallacy of their business is they are trying to be the the last mile in a twenty-first century supply chain that they are running off an eighteenth-century grid,” said David Evanson, a neighborhood property owner. He says he’s complained to goPuff management and to beer and soda distributors, whose drivers, he fears, risk “physical confrontation” with locals angry about blocked traffic.

City officials acknowledge the complaints, though they say the volume has not been unusual compared with other parts of the mixed-use neighborhood.

By early 2018, "GoPuff’s rapid growth outpaced the capacity of the area,” said Commerce Department spokesman Kevin Lessard. “It’s our understanding that goPuff currently plans to phase out the 12th Street location over the next year as other fulfillment centers come online.”

But goPuff wouldn’t confirm that plan; a spokeswoman declined to comment. “We were told they were looking for a new warehouse two years ago,” said Sarah McEneaney, board president of the Callowhill Neighborhood Association, which she said has been “dealing with the GoPuff issues for over two years.”

“It’s like they put a super Wawa, plus a beer distribution center, that operates 24/7, in the middle of a neighborhood, with no parking,” said Bo Dahlhausen, one of several neighbors who walked me around the block on a recent cold night. We watched a procession of delivery cars stopping mid-street and double parking, as drivers ducked inside the centers, though there was also a man who said he was a GoPuff employee diligently picking up cigarette butts.

Residents have posted photos of apparent traffic, parking and litter violations around the goPuff center at @PHLSafeStreets, where they’ve been threatened by Twitter trolls: “Snitches get stitches,” one wrote.

The company has improved its "litter-strewn sidewalks, with regular cleaning and receptacles for cigarette butts for their many employees who smoke outside,” McEneaney added. But a temporary parking lot negotiated by the city managing director’s office “has not changed the behavior of their drivers,” who she said “routinely” drive the wrong way up 12th Street after leaving goPuff. They tie up traffic, including Septa’s 23 bus, park on sidewalks and crosswalks, and “harass and intimidate residents” who take pictures of “the illegal and dangerous situation.”

Senior goPuff employees “say all the right things, but the follow-up is not happening.” She concluded, “They need a warehouse with parking.”

“We live here in a sea of their cigarette butts,” said resident Mark Prinzinger. “They park illegally on Hamilton Street and dump their fast food.”

Friday and Saturday nights are the busiest, said neighbor Christina Rose.

Are the other locations better adapted to the traffic? The University City site has off-street parking with access from two neighboring streets. “I do a lot of work for goPuff. They’re good people. They are expanding a lot in Philadelphia, employing lots of people,” said contractor Ron Reeves, overseeing work on a new 38th Street entrance for the company.

I asked whether he expected the busy University City neighborhood could manage the traffic better than Callowhill. “There’s a big influx of people and not enough parking. There’s not enough room for all the cars," he added. . "I’m from Kensington, born and raised, and what that company is doing is better than what they had in a lot of places.”

GoPuff is also trying to move beyond the early reputation it cultivated as a marijuana-friendly delivery business. The company’s name evokes marijuana smoking. As recently as 2018, the company’s marketing materials prominently featured hookah waterpipes and flavorings.

“GoPuff is stealing your stoners," convenience-store trade publication CSP told readers in 2018. “GoPuff has been marketing #12Daysof420 to college-age and millennial customers on its Instagram page,” using the number 420, a cannabis-culture euphemism for smoking pot, CSP continued. “.

The Inquirer reported at the time that goPuff’s expanding inventory included “all manner of partying paraphernalia, from hookahs to weed grinders,” and that nearly half of customer purchases were tied to pot consumption, pot culture or the post-smoke munchies.

But the company seems determined to rewrite that history. “Marijuana products are not and have never been a part of our assortment, or planned assortment. Nor is it part of a plan,” said a person familiar with the company’s marketing plans who asked to not be identified because of not being authorized to speak publicly. The person added that the company’s fastest-growing product lines lately include baby products, over-the-counter drugs, pet food and “healthy snacks.”

A former staffer who departed the company’s headquarters at Third and Spring Garden Streets this winter said a de-emphasis on pot followed the Softbank Vision investment. Investors include, besides U.S. and Asian tech giants, the conservative Islamic governments of Saudi Arabia and the United Arab Emirates, whose rulers frown on marijuana and other drugs that are banned in many countries.

How far can GoPuff grow? Investors such as Softbank Vision expect their money back, in a few years, with fat premiums -- either from fast-rising profits, or from a buyer willing to pay a lot for the local network the company is building, one neighborhood at a time.