Instacart has repeatedly come under fire for the working conditions its contractors labor under. Today it finally agreed to stop engaging in what critics called tip theft, and all it took was a public shaming.
In case you’re in the subset of people who goes to physical stores and buys things your own damn self, Instacart is a personal shopper platform where users can pay a premium to have an independent contractor pick and deliver groceries and other items. Unfortunately, and in addition to the typically low wages of the “gig economy,” Instacart engaged in what the New York Times referred to as “deceptive tipping policies”—subsidizing the guaranteed payouts of workers with tip money that anyone who has ever left a tip before would assume was in addition to wages, not supplemental of.
Instacart presented shoppers with a single, itemized “earning estimate,” and guaranteed them a $10 minimum payment for each batch they accepted. But Instacart shoppers began to notice that for some orders, the tips customers added during checkout were being counted toward their $10 minimums, rather than being paid out on top of them. In some cases, the bigger the tip, the less the company seemed to pay.
This underhanded pay scale supposedly went into effect in November, but it’s far from the first time Instacart has found itself in hot water over tips. Shoppers—the platform estimates one percent of them, overall—had tips withheld as a result of a “bug” a little over a year ago. In November of 2017, a contingent of shoppers went on a two-day strike to protest the company’s lackluster pay, as well as UI changes that made it difficult for users to know how to tip. The importance tipping plays in the overall compensation of these workers was also the focus of a petition signed by over 150 Instacart workers in January.
In a Medium post this afternoon, CEO Apoorva Mehta announced that Instacart will retroactively compensate those contractors whose tips were used to supplement pay floors of shopping tasks (called “batches” in the company’s parlance), as well as “a higher guaranteed compensation floor for shoppers.” He added that tips “should always be separate from Instacart’s contribution to shopper compensation,” and by way of explanation wrote:
[W]e noticed that there were small batches where shoppers weren’t earning enough for their time. To help with this, we instituted a $10 floor on earnings, inclusive of tips, for all batches [...] 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.
Whether Mehta is sorry for stiffing his contractors or sorry he got caught doing it is unimportant. What matters is that shame works.