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The Shift: After Uproar, Instacart Backs Off Controversial Tipping Policy

The Shift

After Uproar, Instacart Backs Off Controversial Tipping Policy

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Workers submitted photos of themselves (and their delivery loads) to a private Facebook group for Instacart shoppers.

The gig economy’s work force is fighting back, and in some cases, it’s winning.

On Wednesday, Instacart, the Silicon Valley upstart that delivers groceries and other household items to customers through an app, reversed a tipping policy that had outraged workers, who accused the $ 7 billion company of cheating them out of rightfully earned wages.

“We heard loud and clear the frustration when your compensation didn’t match the effort you put forth,” Apoorva Mehta, Instacart’s chief executive, wrote in an open letter to Instacart’s contract workers, known as shoppers.

Instacart’s workers had taken to Reddit forums and private Facebook groups to express their anger with the policy, which counted tips toward the guaranteed minimum payments the company offered to shoppers. In some cases, the more customers tipped, the less Instacart paid them.

“It’s offensive, it’s unethical, and in this climate it’s a very dumb thing to do,” Matthew Telles, an Instacart courier in Chicago, said this week before the reversal.

In the letter to shoppers, Mr. Mehta apologized for the tipping policy, which he called “misguided.” He said that from now on, Instacart would calculate tips separately from base pay. He also said the company was putting new minimum payments into effect: at least $ 5 for orders that require only delivering an item, and $ 7 to $ 10 for orders that involve picking items off supermarket shelves.

In addition, Instacart said it would retroactively compensate workers who had lost base pay as a result of the old tipping system.

The victory at Instacart, which will ultimately affect thousands of workers, is just the latest in a string of successful pressure campaigns by workers for gig economy platforms. Drivers for Uber and Lyft in New York successfully agitated for a citywide minimum wage that went into effect this week. Postmates, another high-flying start-up, recently settled a class-action suit with thousands of delivery workers who contested the way the company classified them as contract workers.

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It’s no secret that many modern gig workers exist in a state of permanent precarity, with few legal protections, unstable working conditions and pay that varies based on who’s flush with venture capital money that week. Most gig economy workers are still classified as contract workers, meaning that they aren’t covered by federal minimum wage laws and other labor protections.

Still, by organizing en masse and expressing vocal opposition to exploitative policies, they have managed to wring some concessions out of the billion-dollar corporations whose labor they provide.

For Instacart, the drama began late last year when it changed its method for paying its contract workers.

Until then, Instacart’s shopper pay was determined by an algorithm that factored in a fixed base payment for each order, along with a per-item bonus and extra payments for certain tasks, such as delivering over long distances. After the change late last year, Instacart presented shoppers with a single, itemized “earnings 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 that customers had added during checkout were being counted toward their $ 10 minimum, rather than being paid out on top of them.

Angry shoppers collected shocking examples of low pay, like a receipt submitted by an Instacart shopper who appeared to have been paid a total of $ 10.80 after a $ 10 tip. (Instacart claimed that the payment was an “edge case,” and that it was putting new policies in place to prevent similar incidents.)

In another example, two identical Instacart batches paid out $ 10 — the guaranteed minimum — even though one delivery earned a $ 2 tip and the other a $ 6 tip. In the case of the $ 2 tip, Instacart’s “batch payment” came to $ 8; in the case of the $ 6 tip, Instacart paid only $ 4.

“We started to notice customers who said they tipped, but a lot of times we wouldn’t see the tips,” said Kaylania Chapman, a worker in Orlando, Fla., who delivers orders for both Instacart and DoorDash, a rival delivery app with a similar tipping policy.

The workers’ complaints started to be picked up by news outlets including Fast Company and NBC. And they caught the attention of Working Washington, a union-backed labor group in Seattle, which collected more than 1,500 signatures of Instacart shoppers who objected to the company’s pay practices. Some began asking for cash tips outside the app, while others encouraged customers to leave 22-cent tips — a nominal amount meant to show solidarity with workers — through the app and then adjust the tips higher after a delivery was made.

On Wednesday, after the announcement that Instacart was changing its policies, a representative from Working Washington, Sage Wilson, said, “In the space of two weeks, Instacart workers came together, sparked a national media sensation and transformed the entire pay model of a $ 7 billion corporation.”

DoorDash, which is valued by investors at $ 4 billion, has not announced plans to change its tipping policy, which dates to 2017.

“DoorDash’s pay model provides transparency, consistency and predictability,” a company spokeswoman said on Tuesday. “Since implementing this pay model more than a year ago, we’ve seen a significant increase in dasher retention, percentage of on-time orders and dasher satisfaction.”

After Instacart’s announcement on Wednesday, the DoorDash spokeswoman declined to comment.

Many Instacart shoppers were thrilled by the company’s about-face. In a private Facebook group, some celebrated their successful campaign to get the company to change its tipping policy and make them whole on previous payments.

“I can’t believe it! Back pay!” one shopper wrote.

“THIS is why you stand up for yourself against corruption,” wrote another.

“I’m very excited that we got Instacart to listen to our complaints,” said Ashley Knudson, an Instacart shopper in Seattle. “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. We consider this a small victory, for acknowledging their mistreatment, but we look forward to pushing onward and having our voices be heard.”

Many gig economy workers still face economic insecurity and exploitative platform policies, of course, and lawmakers may ultimately need to come to their rescue. (On Tuesday, Representative Ro Khanna, a Democrat who represents parts of Silicon Valley, told BuzzFeed News that Instacart’s now-defunct tipping policy was a “deceptive business practice that should end.”)

But ultimately, it may be up to customers to demand more accountability and worker-friendly policies.

Elizabeth Haslam, a DoorDash customer in California who has spent more than three years placing orders from the delivery service, said on Tuesday that she was “shocked” to learn about the company’s tipping policies.

“It made me really angry that I was contributing to a company that would do that,” she said. “And it makes me wonder how many other services are doing the same thing.”

Kevin Roose is a columnist for Business and a writer-at-large for The New York Times Magazine. His column, “The Shift,” examines the intersection of technology, business and culture. @kevinrooseFacebook

A version of this article appears in print on of the New York edition with the headline: $ 10.80. Order Reprints | Today’s Paper | Subscribe

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