Last month, thousands of Instacart shoppers and drivers — the people who get paid to collect and then drop off grocery orders for customers of the online service — were notified that they would soon be seeing a difference in their paychecks as the company overhauled its tipping and scheduling policies. This announcement hasn’t exactly gone over swimmingly, and now several Instacart workers are telling Consumerist why they have misgivings about the change.

The change in Instacart pay structure, which will kick in later this month, is intended as a shift away from relying on tips for workers’ wages, as the company claims that one-in-five drivers are currently getting stiffed on tips by customers. So rather than have workers being paid a low base commission per job and then hoping to get a good tip from the customer, Instacart claims the new system will pay a higher base rate, and workers will be less dependent on tips, which will now be meted out in the form of a variable “service amount” chosen by the customer.

While the company maintains that these changes are in response to shopper and driver requests, a number of Instacart workers haven’t welcomed them with open arms.

THE CHANGE

Image courtesy of Kristin Sloan

Under Instacart’s current system, the company collects tips specifically for that order’s shopper and driver.

Starting Oct. 17 in San Francisco and Washington, D.C., and Oct. 24 in the rest of the country, the company will collect a service amount from customers instead.

The company says that customers can choose how much of a service amount they want to provide and Instacart will then pass those funds along to its contractors — the driver or shopper handling orders.

Additionally, Instacart says it will provide the top 25% of all shoppers with a $100 weekly bonus based on their five-star ratings.

In the end, the company claims that a driver in San Francisco could earn between $15 to $20 per hour of work.

Instacart says that the change was intended to create “more consistent pay with fewer variables” and provide “higher guaranteed delivery commissions.”

Ravi Gupta, the company’s chief financial officer, previously characterized the change as providing drivers with somewhere around $10-$12 per delivery, rather than the current $5/delivery plus tips.

DOWN TO THE DOLLAR

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The company contends that conversations with shoppers and drivers have gone well: a spokesperson claims to Consumerist that a majority of workers are happy about the change because it takes into consideration their biggest complaint: they hate relying on tips.

But if you asked any of the hundreds of people who actually do the shopping, make the deliveries, and otherwise help customers, you find that many workers are decidedly unhappy about this change.

Chicago Instacart shopper and driver “Mack”* tells Consumerist that he and fellow shoppers in the area enjoy depending on tips and would prefer to keep the same system.

In fact, he estimates the change will translate to a loss of hundreds of dollars each week, and that’s on top of the average $150/week he says he lost when the company changed policies earlier in the year.

“It’s horrible. Now I’ll only be able to make $10/hour,” he estimates, noting that he currently makes about $180/day and about 50% of that is from tips. “I’ll only be able to do four to eight deliveries. I’ll cap out on $100 on a great day.”

Mack claims that “A lot of people are feeling bad about the job because it doesn’t end up being what they were promised.”

That, he believes, will only get worse as the tip change rolls out.

Another worker, “Charlie,” says he crunched the numbers after the pay change was announced, estimating that he’ll lose about 45% of his pay.

While he calculates that he would still make about $16.50/hour, that doesn’t account for the expenses these contract workers also pay out-of-pocket: gas, income and state taxes, a self employment tax, and health insurance.

Then there’s “Tracy,” who tells Consumerist that this drop in pay and the other expenses shoppers incur — which also includes maintenance on their own vehicles and memberships to club stores like Costco — means many will soon be making minimum wage.

“With the current pay structure I can make $15/hour on a slow day or $30/hour for a busy day; decent income even after expenses for a part-time job,” she tells Consumerist. “But this includes tips, so even on a slow day you can at least cover your gas and wear and tear. Now slow days will net less than minimum wage, at best, and they can’t be offset with busy days because you are making the same money across the board.”

Another shopper, “Brian,” tells Consumerist that he and a group of colleagues have estimated they’ll lose about 20% to 30% of their income once the change takes effect.

“That’s over $10,000 a year missing from our pay,” he says, claiming that, “Not one driver is supporting this change at all.”

Fellow shopper “Leigh” tells Consumerist that tips have always been a “vital and integral part” of her daily and hourly average, making up about 30% to 50% of her income.

“My colleagues and I in Chicago and 18 other markets, love being dependent on tips,” she says, noting that they are fully aware that the quality of their work translates into how much money they will bring home.

FINDING THE TIME

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Another aspect of the policy revamp that worries many Instacart shoppers and drivers isn’t necessarily about money, but time.

Under the change, Instacart says it will allow workers to choose their own hours, moving to a “pick-up only” system where they choose the hours they want to work in the upcoming week from a set of published available times.

While that might sound like a great idea, some shoppers say it unfairly favors those who work full-time, leaving part-time workers with little to no means of making extra money.

According to Instacart, the system will provide shoppers who worked 90 hours or more in the last three weeks, or who worked 25 hours or more in the last three weekends first dibs on choosing their hours for the next week.

For part-time shopper “Kevin,” this is cause for concern.

“Previously, I scheduled myself available for 40 hours a week, but was never given the chance to pick up close to 30 hours,” he tells Consumerist of the old system, in which shoppers were able to submit their availability and then receive a work schedule from Instacart. “I usually would be able to pick up about 20 hours per week and the rest of the time slots were locked out to myself and other shoppers.”

With the new scheduling process, Kevin believes he and fellow part-time shoppers will be left with little to no available time to work.

“Not only does this mean that shorter time slots and less days available to part-time workers, it also means that the new pay cuts will impact part timers even more so than it does for full-time shoppers who are able to work eight to 12 hours a day,” he says.

SAME WORK, LESS PAY

Image courtesy of Patrick

For Mack, who is among the top 10% of shoppers in his city — making trips to Costco, compiling orders, delivering them, and then hauling them up several flights of stairs — the fear isn’t just about losing money, it’s the idea that he’ll be expected to provide the same quality service, at the same pace, for less money, with the fear of being penalized if he doesn’t live up to previous standards.

“Now that’s going to be split with someone who won’t do these trips,” he tells Consumerist. “They want to retain employees that are happy to be lazy.”

He notes that many of his regular customers will also suffer from the change as they’ve become accustomed to certain services — like having a driver haul bags up several flight of stairs — that will be more difficult to perform once the change takes place.

Instacart worker “Gary” tells Consumerist that under the new system he might not accept all orders that come his way. For example, he says, if a business orders 40 cases of soda, he’s less inclined to take on the delivery.

“Let’s be honest, if I know from the beginning of this 40 soda case order that there is no attached tip, why would I put my body through the agony of hand-delivering 40 cases of soda to your 9th floor office?” he asks. “And in the future, most shoppers will fill the order, but you better believe someone or some people from that office will have to come down to the loading dock or curb to get their own libations.”

BONUSES AREN’T THE SAME

Image courtesy of Chris WIlson

While the employees admit they could receive the weekly bonus offered by Instacart, most agree that dangling carrot simply isn’t enough.

“Even if I were to be in the top 25% every week and receive the $100 bonus, it still doesn’t add up to what I’m making now,” Charlie tells Consumerist. “McDonalds would be a better deal when you add in benefits like, worker’s comp, sick pay, and vacation pay. We get none of that being an independent contractor.” [Ed. Note: Many fast food workers do not receive sick pay or vacation pay.]

Mack, who expects to lose $500/week on average, says the bonus is more of an insult than anything.

“If someone mugged you, took $500 out of your purse and put one crumpled $100 back in, you’d still call the cops,” he theorized.

Additionally, Kevin points out that the bonus won’t be available to part-time workers who he believes stand to lose the most over the change.

According to Instacart, the bonus is only available to those who complete at least 20 deliveries per week.

One part-time shopper, “Sharon,” tells Consumerist that even though she was told she was one of the fastest shoppers in her market, she likely won’t qualify for the bonus, giving her reason to doubt her future with the company.

“No tips, no incentive pay, and probably hours that conflict with my other job,” she says. “One foot is already out the door.”

WHAT ABOUT THE CUSTOMERS?

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While an Instacart spokesperson tells Consumerist that the change was announced well in advance of its implementation to ensure that workers had time to get used to the idea, some shoppers question how customers have been notified.

“Long-time customers will have no idea about the change and will continue to leave tips, not knowing their shopper is not receiving them, which is deceitful,” Gary contends.

The company is essentially taking tips away from other shoppers, misleading the customer into believing they are paying a tip to be given to the shopper, claims another Instacart worker.

In the end, the shoppers believe it’s the customers who will suffer the most.

Concludes Gary, “Removing the tips altogether was a bold move by Instacart, a move which will cause them to lose their long-term shoppers that put in a lot of weekly hours, and will also make customer service performance decline as shoppers will have no incentives to do a great job.”

*To protect their jobs and identities, we are not using the real names of any of the Instacart workers we spoke to.

by Ashlee Kieler via Consumerist

Communication

Thursday, October 13, 2016

Instacart Shoppers Say Getting Rid Of Tips Will Ultimately Hurt Customers