Game-Changing Anti-Poverty Software Startup Propel Faces Undue Resistance

  • 24 April 2018
  • Sam Mire

Propel is a company that aimed to create an app which would do more than allow young people to share pictures and videos of their daily lives, make it easier to order takeout from your favorite pizza joint, or drop a slick line to your latest squeeze. Jimmy Chen wanted to make an app with true meaning, and he and the Propel team accomplished that through the creation of the FreshEBT smartphone app, which has allowed food stamp recipients to plan their grocery trips, select food wisely, and avoid food insecurity more easily than ever before. In addition, the app offers ways for users to gain awareness of healthier eating habits, read up on exercise tips, and even apply for jobs, with 10,000 work applications sent through the app to date.

Propel – A Fresh EBT user shows off a shopping list she made in the app while at the grocery store. The shopping list is built to help SNAP clients to budget their benefits, showing the current card balance compared to a running total of items on the list

The Brooklyn-based startup is a company seeking to alleviate the strains of poverty, a mission that far too few technology companies have ventured to take on. It’s an app that has attained financial backing from major players in both tech and philanthropy, including Andreesen Horowitz, Rockefeller, the team at Robin Hood, and NBA star Kevin Durant’s The Durant Company, among others. The mix of investors from different walks of life, especially Durant, whose story of perseverance included a childhood plagued by poverty including home and food insecurity, is a testament to just how obvious the need for a product such as FreshEBT is.

As Chen made clear in an interview with Tech Crunch, the more users that adopted the app, the greater the impact that it could have on a network of people who rely on food stamps to feed themselves and their families. A greater user base, quite simply, meant casting a wider net that would allow more and more people to rise above the archaic facets of an outdated EBT administration system, a system which Propel single-handedly guided into the modern age with their app.

We’re excited to prove that venture-backed startups can responsibly address social issues, too, founder and CEO Jimmy Chen told [Tech Crunch] via email. In our business model, the best way to amplify our impact is to grow our business, by getting more users on the platform or by finding them more savings on groceries.

But due to the popularity of the app – a clear indication of how many users have incorporated it as an integral tool in their lives – Propel has begun to experience speedbumps in its dealings with Conduent, a major government contractor which handles the food stamp networks in 25 of the 50 states in which FreshEBT is available. With one million users currently using the app, they have begun to experience far-too-frequent outages or unavailability in states managed by Conduent, often for weeks at a time. While only maintaining 50 percent of states in number, those states’ collective population makes up 60 percent of Propel’s user base, including those in New York and California.

It’s an issue which has undoubtedly disrupted the lives of countless users, who are left in a lurch after having ordered their shopping habits – and for many, their lives – around the convenience and multi-faceted uses which the FreshEBT app affords. A New York Times article offers detailed insight into the nature of the issue, which essentially boils down to a large number of users utilizing the FreshEBT app, which Conduent says has led to a “content ambush” of their networks. But, as Chen explained, Conduent and FIS – the other food stamp network management contractor, which Chen says they have had no significant issues with – are inextricably tied to what Propel is trying to achieve in improving EBT delivery systems.

FreshEBT does not see itself as an adversary of Conduent’s but partners which, until recently, had worked together to deliver an app with a million-user base. Yet, Conduent has not only refused to respond to Propel’s increasingly frequent requests for service and explanations of the outages, they’ve gone so far as to attempt to block the FreshEBT app completely. Considering that these service outages hurt the food stamp recipients which Conduent is tasked with serving, the suddenly-adverse stance toward facilitating the FreshEBT app’s existence seems perplexing.

Chen has detailed in the past the antiquated systems food stamp users had to routinely – often daily – perform to see how much food they could buy; calling a number, entering their unique card number from memory, and finally receiving their balance, which they then had to use to manually tally up their grocery total. It was a process begging for consolidation, and Propel did just that.

Since the app works as a sort of “skin” which overlays the websites of food stamp contractors, a level of cooperation is required between Propel and the likes of Conduent and FIS. And now, it seems that Conduent is working to shoulder out Propel and FreshEBT from the marketplace, having released its own, less widely reviewed or used app last year. It’s currently only available in three states and has fewer features than Propel’s interface.

Because few government contracts are generally granted, as is the case when it comes to food stamp system’s technology, Propel doesn’t have the option of seeking a more cooperative, user-friendly partner as they might in the private sector. That means that they are stuck in an uncomfortable handcuff with a company that, suddenly, appears to want to introduce a less-effective imitation of Propel’s product at the detriment of a million-plus person user base which has issued rave reviews of the services rendered on the FreshEBT platform.

Here’s to hoping that a startup which has aimed only to serve the underserved isn’t set aback by the limiting realities of industries beholden to oligopoly practices, and that the functionality and reliability of Propel’s innovative, disruptive solution to minimizing food insecurity doesn’t become the victim of laziness or greed by those who aren’t capable of producing a viable alternative.

About Sam Mire

Sam is a Market Research Analyst at Disruptor Daily. He's a trained journalist with experience in the field of disruptive technology. He’s versed in the impact that blockchain technology is having on industries of today, from healthcare to cannabis. He’s written extensively on the individuals and companies shaping the future of tech, working directly with many of them to advance their vision. Sam is known for writing work that brings value to industry professionals and the generally curious – as well as an occasional smile to the face.