News outlets are reporting that InstaCart employee pay has been slashed recently by as much as 60%. What started as a rosy picture of the new app economy, supported by hundreds of millions in venture capital, is facing the harsh realities of business model sustainability. InstaCart, purporting to Ubernize the world of grocery shopping by matching personal shoppers with customers may soon find that it cannot build and maintain a consistent force of personal shoppers at a price that can keep the service popular with its customers. The company’s promise of $20-$30 per hour pay, attracted a diverse and energetic group of young, mobile app savvy shoppers and drivers, giving InstaCart its initial push, is quickly turning into $10-$15 per hour if you are lucky and working extremely hard and fast. Since no diverse-energetic-and-app-savvy person can seriously consider this line of work, at this pay rate, as anything more than a short stint, its hard to see how InstaCart can keep the quality of service with the diminishing workforce quality.
The underlying reason for the change in InstaCart priorities is the simple pressure to show that they can turn profit. With roughly $300 million raised to date they are expected to show that they can turn profit and do it sooner rather then later. Examining their cost structure, InstaCart management quickly settled on the weakest albeit most important link, its shoppers and drivers.
To get the sentiment among the InstaCart Shoppers we are quoting reviews off internet job boards of current and past workers.
Here’s what a current Tampa, FL worker had to say: Pays less than Domino’s pizza, you pay for all (car) expenses and no benefits
They are a respectable company but I don’t really think it pays well at all. I make more at Domino’s pizza at base and tips. I think the reliability issue can know you out of your job if your not careful. You have to be reliable and stay on top of your game. I put a lot of hours in for 450 per week. It’s slow. The happiness team is great but limited on their ability to help the Shoppers. Overall it is good for the short term. I will give it a couple of months and see where we go. You pay for everything, gas, food, maintenance, and can get a little exhaustive at times. No real benefits. (source: indeed.com)
A former Austin, TX worker had to say: $15-$20 pre-tax is possible depending on tips, not company pay.
The job itself is hard work — physical labor in all conditions and an expectation of punctuality regardless of driving conditions or anything else. It isn’t a typical job as a full-service shopper, since your coworkers will almost never see you and quite a bit of the job is a solitary activity. If you’re a people person, you might find this quite difficult and disheartening, despite the customer service aspect. Also, sometimes it will require you to drive long distances in order to get to a store closer to a customer; the shopping zones are quite large, so this is not the best option if you have unreliable transportation.
It can be quite lucrative if you’re fast, great at customer service, and lucky. Most of your income comes from tips, which means you’re down to the generosity of the customer to make the promised ‘$15-20/hr’. And it really does come down to generosity, since my best tippers were usually moms who used the service largely as a convenience.
While it’s nice to be able to set your own schedule, keep in mind that it’s a contract position, which means that you’ll have to pay extra taxes at the end of the year. No benefits, either.
The company itself does seem to do a pretty good job of working toward shopper happiness and seeking out the opinions of their shoppers. Everyone I’ve ever spoken to on the shopper happiness line was extremely helpful. (source: indeed.com)
Long term full service driver / shopper from Los Angeles, CA says: InstaCart is a bottom-feeder pay, fight for hours, no benefits, no hourly wage, no pay for mileage, reprimanded like an employee thereby invalidating the freedom normally given to 1099 contractors, demanding physical labor, etc.
I have been working for Instacart as a Full Service shopper since March of 2015. During my time there I have experienced two majorly significant wage decreases that have effected each and every shopper on my team. As an employee of Instacart you will consistently be pressured to shop fast and deliver faster, yet your performance will no longer even warrant a tip.
Instacart offers no employee benefits of any kind. As a matter of fact, if you are injured on the job, Instacart will not provide workman’s comp. Instacart will not help you if your car breaks down or if you are in an accident. Instacart will not pay you overtime for working 12+ hours a day, 7 days a week. Instacart will not provide ample breaks for its Full Service Shoppers, and instead allows only one instance of 20 minutes downtime during a 12+ hour shift. An Instacart employee is not valued as a person, but is instead treated as a score on a computer. “How many items per minute can they pull on average? Shopper #63 had a slow day? Let’s not schedule them the hours they need next week.”
Instacart is shady at best and tyrannical at worst. If you or a loved one is considering working for Instacart, know that they will not reimburse you for miles driven. They will not be responsible for gas, maintenance, or supplies. (They once offered insulated bags to their shoppers for $5. A year later they offered the same bags, but of lower quality material, to their shoppers for $20) They will not guarantee that you are able to work any given day and you will instead be fighting in a ‘first come first serve’ arena with every other shopper hoping to schedule yourself enough hours to pay your rent on time. If you miss out? You’re out of luck. The only thing that kept me driving for this company is the generous and wonderful customers who are gracious enough to tip their drivers for good customer service. As of a brand new update to our wages..the option for customers to tip their drivers has been completely eliminated. I used to be able to pay my bills on tips, now I will have to work 10+ hours a day just to be able to afford living in Los Angeles. (source: indeed.com)
Complicating this picture is a class action lawsuit filed by 14,000 against Instacart claiming they are owed money in lieu of the minimum wage, overtime and benefits. This is a second attempt by employees to sue the company which thus far was able to thwart the claims by invoking the arbitration agreement signed by each worker before they join the company. Regardless of the results, labor related issues seem to plague the app economy startup and its hard to see how companies like Instacart can get a pass from regulators.