Instacart workers say they’re getting less money under delivery company’s new pay system

An Instacart “shopper” fills an order at the market of a customer’s choice. The online delivery service is facing criticism for its new pay structure for its shoppers.
An Instacart “shopper” fills an order at the market of a customer’s choice. The online delivery service is facing criticism for its new pay structure for its shoppers. Courtesy

Changes in the way Instacart handles shopping orders and payments have improved some elements of the process for its workers, but they also appear to have affected what those workers receive in payments.

What someone is paid in a tip is now affecting the total that Instacart pays its shoppers, according to workers speaking out via the advocacy group Working Washington.

Instacart insists no one is making less under the new system.

As more stores take on the challenge of delivering, Instacart is challenged with offering both economical prices to consumers and a fair wage to its workers.

As The Miami Herald reported Jan. 14, cost reductions have offered cheaper prices for those ordering from the service. Meanwhile, the independent contractors doing the shopping, including those in the Tacoma-Seattle area, seem to be feeling the squeeze.

Regionally, Instacart delivers for Costco Wholesale, Safeway, QFC, Petco, Fred Meyer, BevMo, Albertsons and Metropolitan Market, among others.

The company changed its pay structure for workers late last year, and shoppers working for Instacart now see an estimate of what they will earn by fulfilling an order before accepting it.

Additionally, the company touts bonuses after five-star ratings on full-service orders, pay-per-mile to help with long-distance batches, batch incentives and peak boost incentives, according to a Nov. 8 shoppers blog post about the changes.

In the previous system, workers were paid 40 cents an item, along with a base rate for the city they were working in and a tip, with occasional bonuses, particularly when bigger orders were involved.

The previous structure didn’t take into account, nor could shoppers see, the weight of an order or distance to travel until after accepting the order for delivery. That led to complaints of dealing with surprisingly large deliveries or having to call for help with deliveries.

Shoppers for Instacart were encountering large orders not accommodated easily either physically or in their vehicle — think multiple cases of water or several pounds of dog food.

These complaints were heard last year at a Seattle Working Washington forum that explored issues with gig economy jobs.

Changes to allow for what Instacart says is more transparency in orders rolled out in the past few months.

The company, in information it provided to The News Tribune, said the changes evolved through its “Shopper Experience Council,” formed in early 2018 and made up of Instacart shoppers from across the country.

Those changes mean workers now get an early look at what’s in an order, estimated earnings and a map locating the store and customer.

Those estimated earnings have become a sticking point for area Instacart workers.

Ashley Knudson of Tacoma, an Instacart shopper, was matter-of-fact in her summary of the changes she’d experienced since starting with Instacart in February 2018.

“We love seeing the items and delivering,” she told The News Tribune in a January interview, “along with being paid fairly like before. They haven’t figured out how to do both.

“Since the new pay structure, every order is substantially lower even with mileage added in.”

An open letter posted by Working Washington Jan. 17 on Medium was signed by Instacart workers in Washington state, including Knudson, and others from across the country. The letter stated that “since November, all of us have seen dramatic cuts in our paychecks. Some of us have seen wages lowered by 30 to 40 percent overall.”

The letter calls for a “predictable, transparent pay structure.”

According to the letter: “Under the new model, there’s no breakdown of how pay is determined. Shoppers often reject jobs only to see the same jobs reappear minutes later with slightly higher pay, indicating that Instacart is simply trying to sell the job to the lowest bidder with no other obvious standard for how a given job should be paid.”

The letter contends that Instacart pays less based on tip:

“Under the new model, Instacart pays less to workers for gigs where customers have left higher tips, so customers’ tips are essentially being paid to Instacart rather than to the workers ourselves. If customers don’t tip up front, Instacart pays more.”

An Instacart representative who would only speak on background insisted that worker pay has not been reduced with the new system.

“If you are accepting the same amount of work, your pay should be the same,” the representative said.

Since its earlier post on Medium, Working Washington says it has continued to hear from individuals working for Instacart.

In a Jan. 27 post on its website, Working Washington showed Instacart paying 80 cents to a shopper after the customer paid $10 in a tip.

When asked about the continued fallout over its new pay system, Instacart, in an emailed statement sent to The News Tribune on Jan. 31, said:

“We’re constantly reviewing and evaluating feedback from our shopper community to ensure they’re fairly compensated for the work they’re doing on behalf of our customers. Last year, we introduced new earnings features designed to pay our shoppers more consistently for their time and effort while also keeping average shopper earnings the same.

“These features also surface upfront details about orders and estimated earnings, empowering every shopper to make an informed decision on which orders they choose to accept. We remain committed to ensuring competitive earnings for our shoppers, which are on average well over the local minimum wage.

“Last week, our national average shopper earnings was more than $15 per hour worked. We provide shoppers with an estimate of what they can expect to earn from all orders they accept, which includes tips. This approach is consistent with the practices of other on-demand delivery companies. Our shoppers also always receive 100 percent of the tips given to them by our customers. As a team, we’re deeply committed to fair compensation and welcome the feedback from our dedicated community to create the best possible shopper experience.”

Sage Wilson of Working Washington said that’s fuzzy language.

“The sentence that shoppers get 100 percent of tips can be true, but what we’re saying can also be true,” Wilson said. “And we’re saying they’re paying the workers less.”