Instacart reverses course, re-introducing tips for shoppers
Under pressure from shoppers complaining about losing the ability to receive tips last month as the company looked to smooth out the earnings curve, Instacart said it is re-introducing customer tipping.
“After announcing this change, we heard a lot of feedback from our shopper community,” the company said in a blog post. “While our shoppers liked most of the changes, they did not like the fact that we were removing tips from our online platform. Taking that feedback into account, we have decided to continue to accept tips as part of this change.”
CEO Apoorva Mehta stressed that the decision came from customers looking to continue tipping, rather than complaints from shoppers, which he called a small group that was “very vocal” about the change. However, following removing tips, Instacart received some backlash from shoppers who said they were losing significant portions of their earnings. The backlash went so far as to inspire a boycott among some shoppers, though again Mehta said that this was not the primary cause for returning tipping.
“We have tens of thousands of shoppers,” Mehta said. “I think that a lot of times it’s the most vocal ones you hear from. A lot of times what ends up happening is that frankly we were over-communicative, we communicated for weeks before the chain before it happened. Genuinely, I think there’s always going to be the case that we can always do better, this is one of those cases where we can definitely do better. I hope the next time changes we carry out, we hope that we’re better at it now than we were before.”
Originally, the company sought to raise the overall earnings payout per delivery while removing tips, which was an attempt to make earnings more reliable instead of burst-y as a result of tips. Top shoppers, however, accustomed to getting larger tips because of their performance were concerned that they would lose a significant portion of their earnings. The vocal minority, it seems, was loud enough — and perhaps so was the customer base — that Instacart had to reverse course.
Despite all this, Mehta said the company was clearly communicating with the shopper base what the change would be. But he also said that Instacart, with the change, was “getting in the way” of customers tipping their shoppers, which would have to then rely on cash in order to give a tip for a good customer experience. One original argument for the change was that 20% of customers didn’t tip, but that other 80% comprised a significant portion of its shopper base’s income.
Customers will still pay a service fee at checkout. “This payment will be used to guarantee a higher commission to all shoppers,” the company said in a blog post. “Shoppers will no longer need to depend on tips for the majority of their compensation. This also means that customers no longer need to feel obligated to tip. However, if a customer wishes to recognize exceptional service, they will have the ability to tip their shopper directly on theInstacart platform.”
This update launches on October 17 in Washington D.C., and the change comes to San Francisco and Instacart’s other markets on October 24.