Instacart Class Action Lawsuit (2019) Investigation

Past Instacart Class Action Lawsuit and Settlement

In 2017, Instacart settled a class action lawsuit for $4.65 million which was brought on behalf of 31,000 Instacart shoppers alleging that the company had misclassified them as independent contractors and failed to reimburse business-related expenses, reports Tech Crunch. As part of the class settlement, Instacart also agreed to clarify to customers the difference between a service fee and tip. The settlement agreement also prohibited Instacart from terminating Instacart workers from the app without cause.

The recent class action lawsuit against Instacart focuses more on its tipping policy, noting that Instacart often does not pass on customers’ tips to drivers. Rather, according to the lawsuit, Instacart often uses customer tips to defray its cost from guaranteeing Instacart shoppers a certain amount for each job — currently $10 per job, according to Tech Crunch. For example, one Instacart worker complained that the company only paid 80 cents for a job, reports TC. The company responded that it only paid 80 cents because the customer had left a $10 tip, so it paid the Instacart shopper only 80 cents (for a total of $10.80).

Using this policy, Instacart claims that it passes on all tips to its workers. But Instacart’s model of using two alternative formulas for paying its workers causes confusion for many Instacart customers and shoppers, who think that a tip will increase the shopper’s earnings (above the guaranteed amount).

In a recent DoorDash lawsuit, DoorDash has been accused of violating the law by using a similar tipping policy.