Business

Instacart changing way it pays after workers speak out

Instacart announced new pay changes Wednesday after backlash over how tips were reducing what Instacart paid its workers.
Instacart announced new pay changes Wednesday after backlash over how tips were reducing what Instacart paid its workers. Courtesy

Instacart appears to have done an about-face when it comes to how it pays its workers.

On Feb. 2 The News Tribune reported that tips given to the grocery delivery service’s workers were affecting their pay structure. According to the workers, the higher the tip, the less Instacart was paying.

On Wednesday, Instacart’s founder and CEO Apoorva Mehta announced changes to its pay structure, saying the company will keep tips separate “from Instacart’s contribution to shopper compensation.”

Additionally, Mehta wrote in Instacart’s online blog, “All batches will have a higher guaranteed compensation floor for shoppers, paid for by Instacart.

“Instacart will retroactively compensate shoppers when tips were included in minimums.”

According to Mehta: “We instituted a $10 floor on earnings, inclusive of tips, for all batches. This meant that when Instacart’s payment and the customer tip at checkout was below $10, Instacart supplemented the difference. While our intention was to increase the guaranteed payment for small orders, we understand that the inclusion of tips as a part of this guarantee was misguided.

“We apologize for taking this approach.”

Earlier, Instacart told The News Tribune that pay hadn’t been affected by the changes Instacart adopted last year.

“Over the coming days, as we transition to the new higher minimum floor payments, we will make (shoppers) whole on the transactions that have occurred since the launch of this feature,” Mehta said in the post.

On Wednesday, Rachel Lauter, executive director of Working Washington, an advocacy group that had taken up the shoppers’ cause, reacted to the news in an email sent to the group’s followers.

“Instacart announced some major concessions to workers. They finally admitted they’ve been lowering pay based on customer tips. And they agreed to stop. Not only that, but workers won back pay for the tips Instacart took from them, and higher minimum pay for jobs.”

Lauter noted the incident “sparked an extraordinary national conversation about the gig economy and tips and pay.”

Ashley Knudson, a Tacoma Instacart shopper who helped bring the pay issue to light, told The News Tribune via email that she was “cautiously optimistic” at the news.

“I’m very excited that we got Instacart to listen to our complaints. I feel like we have some work to do, and we’re not going to back down until we get the consistency that we need in our batch payments,” Knudson said. “We consider this a small victory, for acknowledging their mistreatment, but we look forward to pushing onward and having our voices continue to be heard.”

Working Washington, in a statement, said: “It’s not over. Workers continue to call for a transparent pay structure so they can verify that what the company says they’re going to do is what they’re actually doing.”

Debbie Cockrell has been with The News Tribune since 2009. She reports on business and development, local and regional issues.


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