Instacart Renames Tips To “Service Amounts,” Keeps Them
No one ever described Silicon Valley’s so-called “gig economy” as something that would last forever. Fledgling startups eager to make a name for themselves as the deliverer of goods, people or services promised decent wages and the flexibility of setting your own hours to attract contractors. And during the Honeymoon phase, that’s actually what many contractors got, prompting many tech journals to treat this model as a sort of tech renaissance with the greater good in mind.
Essentially, the typical gig economy pitch would go, if you’ve got a car and some time on your hands, you can have a fast job and make some fast money. But as Instacart’s distant cousin Uber—probably the first gig startup that comes to mind for most—recently revealed, they plan to replace their drivers with autonomous fleets of cars. In no uncertain terms they’ve spelled out that the gig economy they helped create was never about people — it’s about a whole lot of money — and contractors just happened to be the placeholder until self-driving cars would come along. (And of course, the old tales about the parent-of-three who’d been out of work for 5 years finally making money again wasn’t bad PR, either.)
Instacart’s model, if you’re unfamiliar, is probably pretty close to what you’d predict: Customers use the app to place their grocery order at a local supermarket. From there, a nearby Instacart contractor—probably already waiting in the parking lot outside the store—receives the order and goes inside to shop for you. After checkout, they drive to your home or business in their own vehicle (and on their own gas money) to drop it off. The contractor is paid a flat amount by Instacart for compiling and delivering the order, and, until recently, also had the ability to collect tips from the customer via the app. That’s about to change. From TechCrunch:
The goal of the change, Gupta says, is to smooth out the earnings curve for shoppers and make it less reliant on spikes in tips.
Our current structure has shoppers being really reliant on tips for earnings,” Gupta said. “It could work better for our shoppers. The reason is, 20% of our customers don’t tip. That’s a really tough experience of or shoppers.
In speaking with two friends who are close to Instacart in various capacities, this change is not going over so well with contractors. Their army of contractors — “shoppers” and “drivers” as they’re called — are not in any immediate danger of mechanization in the way Uber drivers are. These contractors have a complex job riddled with edge cases that can only be solved by a human on the ground. Having to make judgement calls when an item is out of stock (do you replace the organic blueberries with organic raspberries? Or inorganic blueberries? Or frozen blueberries? Wait, are those organic? And is this customer a jerk or will they be cool with whatever I pick?) adds a layer of cognitive work to a job that is already physically demanding, probably ensuring that this job or something like it will not be replaced by robots for a few years at least.
That’s the good news.
The bad news for contractors is that Instacart tips are being entirely removed from a contractor’s income potential and replaced with a minuscule 20 cent boost to per-item compensation. Customers, who tip about 80% of the time, are now asked to input a pay-what-you-like “service amount” that — if you’re not paying attention — sounds like a tip being given to the person who just worked on your order. In reality, that “tip” goes fully back to Instacart itself. They justify this by suggesting in very sneaky wording that the amount goes to the delivery driver and/or shoppers you’ve come to know, publicly using language like the following:
Sure, the driver or shopper you just interacted with did get some money—but not directly. It’s folded into part of the flat, standard fee, and that’s it. The rationalization for this move, in an email to shoppers, was introduced as a fix to eliminate those pesky “inconsistencies” that come with tips:
Higher Guaranteed Pay Per Delivery — We are moving to a higher per-delivery commission and no longer collecting tips. This way, we can remove inconsistencies caused by small or zero tip amounts.
Continuing:
These changes are being made in an effort to give you the added flexibility in scheduling, consistency in pay, and better visibility into future earnings you have been asking for. We want to be a great partner for you, and we are dedicated to making your experience with Instacart better every day.
Instacart literally tells contractors the inconsistency of being given various and unpredictable amounts of money is a big problem for their employees. Apparently their shoppers were too overwhelmed with receiving anywhere from $2 to $20+ dollars extra per order that they figured it’s best to just get rid of it completely. And to add insult to injury, they still provide customers a similar input field that sounds like tipping, but is actually just a “give us as much money as you want” field.
As we speak, Instacart corporate is in the process of doing the damage control and PR they knew they’d need, deleting Facebook comments and responding to concerned tweets, repeatedly saying these new service charges are part of what’s given to shoppers, and that it’s all for the employee's benefit. It’s not. Tips represent a significant portion of income for Instacart drivers just as they do for other service industry professionals—Instacart has just worked out how to word their actions in a way that sounds less sinister unless you care enough to parse them.
This is definitely not the first time in history workers have been stiffed under the banner of “fairness,” nor will it be the last. And for all the admittedly pretty good stuff Silicon Valley is capable of, it’s important for those of us at its mercy to not lose sight of the fact that this economy is foremost a game being played by executives who only deal in numbers and projections, and not people.
Personally, I consider myself lucky to have a pleasant, salaried job somewhere I respect, but others in this supposed innovation boomtown are not so lucky. A not-insignificant amount of everyday people rely on services like Instacart and others to make ends meet. And the unfortunate reality is that services like this, along with their legal teams, actually can be this cruel and get away with it.
It’s almost like a shitty horror movie — Racing against the clock through a supermarket in search of a specific carton of organic blueberries was an interesting enough idea to be made into a game show 20 years ago, but now thousands of people are forced to resort to it as their day job. And it looks like they’re about to lose.
