Instacart’s Unanswered Questions
On October 16, 2016, Instacart will be renaming “tips” to “service amounts”. While the previous tipping system has always been transparent and 100% went directly to the employee who worked on a customer’s order, this new concept of “service amounts” is widely considered deceptive. Instacart tells customers that “service amounts” are “100% going to the shopper”, and that we’re all getting a “significantly higher” base pay. However the person who prepared and delivered their order won’t actually see a change in their income.
Prior to 10/16, if a customer leaves a $10 tip, the person who directly worked on the order will have gotten an additional $10. Starting October 16th, if they leave a $10 service amount, the person who directly worked on the order will not ever see an additional penny. Instacart claims “100% goes to the shopper”, which is only true in the roundabout sense that money which goes to Instacart will eventually fund our standard paychecks. Since tips were such a large part of our pay, many of us will now be making 50% less. As Instacart probably expected, shoppers are livid.
While many articles have been posted (read them here , here and here), Instacart is busy releasing cleverly worded responses from their PR team in an effort to not sound like they’re simply stealing our tips. They urge their current employees to privately reach out to our city leads if we have questions about the change. Instead, I’m posting my questions here. I’ve been a Top Shopper for Instacart for over a year. I’m considered a Top Shopper because I rarely have order accuracy issues, customers tend to like and remember me, and I have a great shopping speed time. I’m keeping my identity anonymous because Instacart has been “deactivating” employees for speaking out.
Instacart has 2 types of employees: full-service shoppers (contractors) and in-store shoppers (employees). The latter receive full benefits and hourly pay, while full-service shoppers are the only employees who will be affected by the new pay structure, and I’ll be referring to them as “FSS” below.
Questions:
- Instacart justifies this change with the fact that FSS were encountering hardship when “only” 80% of customers tipped, and that’s the primary given reason for a new pay structure. If this was meant to help us, then why is every FSS getting a significant pay cut? Higher “guaranteed pay” is obviously not “guaranteed higher pay.” In fact, after speaking with over 100 shoppers both online and in stores, I haven’t found a single shopper who will benefit from this new pay structure. When it is so widely recognized by shoppers themselves jthat the old pay structure + tips was superior to the new plan, how can Instacart imply that higher consistent but lower wages are more beneficial to FSS?
2. If Instacart genuinely believes their new pay structure is fair, why is Instacart — on record — privately reaching out to Top Shoppers asking them if they need to talk about it? Why are company officials sending several nationwide emails, promoting a $250 bonus for employee referrals? Why are city leads quietly telling employees that they know the new pay structure is a big pay cut, and we should quit if we don’t like it?
3. Why only mention San Francisco’s pay chart when trying to justify the change? San Francisco’s pay has the highest possible commission and more than 95% of contractors will be making significantly less. This choice is misleading and dishonest.
Here is an example of a Bay Area shopper’s old pay vs. the new system:
Old:
$10 delivery +. $2.50 *or* $.50 per item (whichever was higher) + tips
New:
$10 delivery + $2.50 + $.45 per item.
So for a 20 item order, this shopper would make: $20 + tips (tips being provided 80% of the time and rather high)
Now with a 20 item order, that’s: $21.50
How is the new pay “significantly higher”? An extra $1 base does not fill the gap that 80% of customers would’ve filled with their tips. If this is a $200 order, the customer will most likely leave a $20 gratuity (minimum) and the shopper wouldn’t get a penny of that.
4. Tips motivated us to work hard and provide excellent customer service. This isn’t a phenomenon new to instacart — look at any service industry professional. Tips are the reason we take the time to select the best produce, contact the customer before checking out, walk flights of steps with a smile on our face. Both Instacart’s CEO and Mike Swartz (Sr. VP of Operations) talk about how difficult it is to shop for other people. We’re personal shoppers and customers appreciate it if we perfect their order. Isn’t Instacart worried that our incentive to work hard is gone? Isn’t Instacart worried that customer service will get worse? This isn’t rhetorical — an answer would be appreciated.
5.Why are we only receiving a flat per-item fee without anything else? We all know that not every 12 item order is the same. Delivering 12 cases of soda to a campus is much different than dropping off 12 tiny items to a house. Tips are what customers use to ensure we are compensated fairly for the amount of work their unique order requires. Why should we take the time to review replacements with customers or carry bags up several flights of steps if we don’t see a penny of the customers “service amount”?
6. Instacart spends so much refunding every item that customers complain about. The catalog, rather famously, is a mess. The company is constantly losing money on items that have the incorrect price (and nearly always in the customer’s favor) on the customer app. The errors stay there for years. Instead of taking money from contractors, why not first fix these relatively simple mistakes? This seems like low-hanging fruit that could be remedied before stealing from hard-working employees.
7. Tipping has always been optional, and even the most conservative estimates (from Instacart itself) show that 80% or more of customers choose to tip. If Instacart wanted to “help us”, why not just create a 5% mandatory tip? Clearly this is just Instacart’s excuse to change the pay structure. Instacart leadership are the only ones benefiting since they’ll be using part of our “service amounts” in lieu of regular payroll. If the service fee isn’t designed to mislead customers into thinking it is a tip, why is it optional and adjustable? Why is the customer still able to adjust the service amount but other fees (like the delivery fee) are a set amount? Why can the customer choose to pay a higher service fee if our wages are predetermined and inflexible? It sounds like this is Instacart’s way of passing on all of the cost of their labor for both ISS and FSS onto the customer at the expense of FSS exclusively.
8. How does Instacart plan to incentivize more challenging orders? Orders that are farther away? Orders that are very heavy?
Yesterday I shopped a small order, and had to deliver it 10 miles during rush hour. It took 40 minutes to deliver, and then 30 minutes to get back to the store to shop a new order. The customer tipped me $15, so I made $28 total. With the new system, I’d make $11 flat. Does Instacart still expect me to complete this order? I’ll spend about $2.50 in gas, which mean I’ll now be making significantly less than minimum wage.
9. If this pay structure change was beneficial to shoppers, why was it effectively hidden behind the news of the Whole Foods investment in Instacart? Why does Instacart continually try to hide news about this?
10. Does Instacart have codified morals anywhere? Where is the transparency? A successful company shouldn’t have to lower pay and steal from their lowest paid employees in an effort to become profitable.
