This Start-Up Says It Wants to Fight Poverty. A Food Stamp Giant Is Blocking It.
Four years ago, Jimmy Chen left a lucrative perch as a product manager at Facebook to found Propel, what he calls an “anti-poverty software company.”
In 2016, the Brooklyn start-up released a smartphone app that lets food stamp recipients easily look up how much money was left in their accounts, rather than call an 800 number or keep paper receipts. Today, one million food stamp participants use Propel’s app, and the start-up has added features like links to food coupons, healthy recipes, budgeting tools and job opportunities.
But in the last few months, the Propel app has been hobbled or become unavailable in many states, sometimes for weeks. Behind the slowdown is a big government contractor, Conduent, which runs the food stamp networks in 25 states, including New York, California and Pennsylvania. In those states, where 60 percent of Propel’s users live, Conduent maintains the database that Propel’s app uses to let people check their accounts.
The Propel-Conduent conflict offers a textbook case of a digital newcomer running into resistance from the old order. The twist is that the newcomer said it did not want to destroy the incumbent but instead build atop it to do good for underserved populations, as well as build a business for itself.
The animating idea behind Propel, Mr. Chen said, was to “apply the Silicon Valley playbook to poverty in some way.” He added that “we have to build on top of the old world to be successful.”
Propel has had no problems with the other major government contractor that manages state food stamp networks, FIS, Mr. Chen said. Nor did Propel have trouble with the Conduent system until recently. Propel has complained to Conduent managers repeatedly, but, Mr. Chen said, “they’ve never offered us a direct explanation as to why now.”
In written replies to questions, Conduent, which spun out from Xerox in January 2017, portrayed Propel less as an innovator than as a freeloader. Propel’s smartphone app, Conduent said, was introduced “without the knowledge, input or consent from Conduent.” It accused Propel of overloading its networks with data requests, causing “a capacity ambush.”
Conduent took actions to block the app, and described them as prudent “steps to prevent unauthorized access to data — from Propel or any other unauthorized user.”