After strict shelter-in-place guidelines were implemented across the country due to COVID-19, vulnerable populations such as the elderly and immunocompromised were often left with only one option for getting their groceries in a way that protected their own health and safety: grocery shopping and delivery service, Instacart. With a 450% increase in the use of the grocery delivery platform, shoppers and customers alike began to question the pricing and payment models of Instacart. From customers who place grocery orders to Instacart’s workers (called “shoppers”), both are required to pay hefty hidden and overlapping fees. Regardless of the many ways Instacart brings in revenue, Instacart shoppers are still pulling the short end of the stick.
It is standard for gig companies like Instacart to charge the customer a fee for using their service. It isn’t standard, as Eric, an Instacart customer and blogger pointed out, that the customer has to pay so many fees: a service fee, delivery fee, ‘heavy pay’ (in circumstances when the order is over a certain weight), and an average of a 23% markup on each item purchased, in addition to the customer tip. With a total of four ways Instacart is funneling money out of his pockets, Eric wondered how much of the money he paid to the app went to the shopper versus Instacart.
In addition to taking money from the consumer, Instacart has also found ways to make money off of its own workers, the shoppers, by skimping on essentials. For much of the pandemic, shoppers were not provided with essential work supplies such as hand sanitizer, masks, gloves or access to COVID testing. When Instacart eventually provided kits to shoppers who requested them and had to pay for shipping, only a thin piece of see-through fabric and a small bottle of hand sanitizer were provided.
Shoppers are not only responsible for the bulk of their own PPE equipment, but are also responsible for buying insulated bags to use while delivering groceries. If the shopper chooses to buy them from Instacart, they’re priced at $25 for a set of 4, and Instacart directly charges the shopper for this essential equipment. If shoppers don’t have the money immediately available to purchase these insulated bags, Instacart takes all earnings from any future batches (orders) until the debt is paid off.
Despite Instacart taking fees from multiple sources, shoppers aren’t making enough money to survive, let alone have enough extra money to buy the required equipment for the job. With the minimum Instacart payment to a shopper being $5, some shoppers are forced to accept orders that are far below the minimum wage. If the shoppers don’t accept, they are shown fewer batches and are eventually out of work entirely.
Behind many different buttons and pages, Instacart’s website reveals the multiple ways in which it takes its fees, with no explanation as to how they are dispersed or used towards paying their gig workers. While Instacart’s business and revenue has skyrocketed, there has been no change in the rate of pay or protections for gig workers during this challenging time. This exploitation of workers, especially during a pandemic, highlights the many ways gig economy companies benefit from both workers in need of a job, and vulnerable customers in need of a safe way to get their groceries. In short, the pandemic has been great for Instacart’s bottom line, but has been bad for the workers putting themselves in danger each and every day.
Unfortunately, Instacart’s model, which puts profits over people, is not uncommon with gig companies. But with more people using this service and more people asking questions about who is actually benefiting from each transaction, there is hope that some of the hardships shoppers are experiencing will be remedied. Our law firm is pursuing claims against companies such as Instacart for their mistreatment and misclassification of shoppers. If you’re a shopper, and believe you have been misclassified, sign up on our case page about the Instacart Lawsuit.