Instacart is facing a worker revolt
By: Lisa F.
Instacart has a problem delivering to its workers.
That message is growing on social media among a small army of the digital delivery service’s workers who pick and pack groceries to customers’ homes and offices.
Thousands have signed petitions demanding better pay and treatment by the $7.6 billion unicorn, which has raised nearly $2 billion over the past seven years largely on the promise that it gives grocers a fighting chance to compete with Amazon.
The complaints are mounting as Instacart faces the loss of its prize Whole Foods contract in December — as Amazon takes control of Whole Foods’ delivery services — just as Instacart faces an onslaught of competition from such startups like Mercato, Jyve, which just raised $35 million, and Roadie, which inked a deal this month with Walmart.
“There are at least a dozen alternatives to Instacart today compared with just a few years ago,” Brittain Ladd, a digital consultant and former Amazon executive told The Post. “And as retailers learn about the problems that Instacart is having with its own gig workers they may question their relationship with the company.”
After criticism over the past several months, including a shocking incident recently in which a driver was paid just 80 cents for a 69 minute grocery run, the company responded on Friday with a concession.
Instacart introduced a $3 minimum for each job, “to prevent some of the extreme edge cases we’ve seen recently,” said Instacart’s chief product officer, David Hahn in a statement.
That seemingly paltry move seemed to amp up workers’ protests, which includes Change.org petitions with more than 2,400 signatures from mostly Instacart drivers complaining about increasingly heavier hauls — like cases of water — in which they receive the same compensation as lighter fare like potato chips.
Others are focused on a change Instacart made late last year in how it compensates its hourly workers which has resulted in them earning up to 40 percent less money.
Under the old system, workers got a base rate for each job of about $10, depending on their market, plus 40 cents for each item they pick up, according to a petition with about 3,000 signatures sponsored by Working Washington, a worker advocacy group.
The new system is inscrutable, they say, and relies on customers’ tips for a big part of their compensation. Shoppers and drivers are promised a different amount for each job, including mileage reimbursement of 60 cents per mile as well as customer tips.
The problem say thousands of shoppers is that when customers provide a tip in the app Instacart pays a lower base pay from its own coffers for the job, which is tantamount to “tip stealing,” they say.
Instacart told The Post that its shoppers earn more than $15 an hour and defended its new payment system as being “consistent with the practices of other on-demand delivery companies. “We’re deeply committed to fair compensation.”
Instacart shopper Michelle Eaton, of Palm Springs, Calif. disagrees.
“I will never succeed at making even minimum wage working for Instacart because I cannot beat the company algorithms that are squarely set to make me fail,” Eaton, a grad student, told The Post.
She calculated Instacart paid her between $5 and $6 an hour when she subtracted the mileage reimbursement from her pay and factored in the costs of the unreimbursed miles she drove from one delivery job to the next. “A reimbursement is not pay,” she said.
It’s not the first time the company has landed in hot water for labor issues. Instacart settled three class action lawsuits, including one for $4.6 million in 2017 over whether the company had the right to classify employees as independent contractors.
“Instacart is building its business model on the assumption that this is legal,” Jahan Sagafi, a partner in Outten & Golden, which represented the workers in the $4.6 million case. “But it’s not at all clear that they are independent contractors.”
