South Florida Sun-Sentinel (Sunday)
Instacart shopper leads worker revolt
As company experiments with wages, contractors demand change
SAN FRANCISCO — When Vanessa Bain quit her job working with special needs students at a public high school in Silicon Valley to become a shopper for online grocery delivery company Instacart, she was wary of tying herself to a tech startup that relied on contractors to meet demand, with little worker protection.
But Bain, then a 30-yearold mother, was quickly won over with meaningful work and a sense of respect. And her take-home pay rose roughly 65 percent compared to teaching and tutoring combined. At the end of a day working for Instacart, Bain had more energy, which made her a better mom. When a friend who drove for Lyft complained about pay cuts, Bain urged her to switch to Instacart.
That changed just a few months later, after Instacart in 2016 began a pattern of experimenting with worker pay in ways that made earnings more precarious. That included using tips to supplement wages, a practice the company stopped in February after public outcry.
“I understand that they artificially inflated what they could afford to pay us, but since then, everything has just dropped so low,” she said. “Their response is always to cut from our pay to figure out how to make this work.”
Bain has turned from an Instacart evangelist into one of the most effective agitators against the company, in what has become a timely test of how much leverage blue-collar on-demand workers can amass to win better treatment from growth-obsessed technology
Instacart shopper Vanessa Bain delivers groceries to a customer Nov. 14 in Palo Alto, California.
companies that keep them at a distance.
While continuing to work as a “shopper,” picking items from store shelves and delivering them to consumers, she has helped build a grassroots movement that has led to four national boycotts, including one last month. Bain is behind a Facebook group open only to Instacart shoppers who support collective action. The group has about 14,500 members, representing more than 10% of all Instacart workers in the United States and Canada.
Companies such as Instacart, founded as part of the so-called gig economy, followed the same business model legitimized by ridehailing companies Uber and Lyft, which raised billions in venture capital to subsidize rapid growth and relied on millions of contract workers to reduce costs.
Drivers allege that these companies enticed them to join with bonuses and then hacked away at their pay
under pressure to reduce heavy losses.
Instacart workers, watching the same story unfold in grocery delivery, alleged that the company was unfairly taking from their tips to pay wages and lowering their take-home pay. But as independent contractors, they aren’t covered by protections around minimum wage, overtime, unemployment or the right to form a union.
The uprising from Instacart workers demanding fair pay is just one facet of a wider reckoning by regulators, labor activists and workers themselves over the responsibilities of companies to independent contractors.
There are some signs of early success. Instacart has walked back a few planned pay changes after a firestorm of criticism, some triggered by Bain. But it’s unclear how effective Instacart workers can be in the long run as the company cycles through recruits and
faces pressure from venture capital investors who valued the company at $7.8 billion.
Instacart, founded in San Francisco in 2012, used to pay workers based on commissions per delivery and per item for jobs within a limited radius. In late 2018, the company switched to an algorithmic pay system that used distance, weight, number of items and other factors to spit out an estimated earning per job. Workers balked and shared images showing how their pay had been slashed under the algorithm.
In February, Instacart instituted minimums of $7 to $10 for each batch of orders, which can cover up to three separate customers. Workers also get tips from customers, although Instacart says the company’s contribution is bigger than the tip on most orders in which contractors do the shopping and delivery.
The average hourly pay for Instacart workers was
$15.54 before tips and expenses, based on self-reported data representing weekly wages from 80 Instacart shoppers viewed by The Washington Post. When factoring in the hours they wanted to work and couldn’t find a profitable gig, it sank to an average $7.15 per hour.
“Our relationship with all shoppers is important, and we are constantly looking for ways to improve,” said Natalia Montalvo, director of shopper engagement and communications for Instacart. “We realize we will not always agree, but we respect and support the rights of shoppers to voice their opinions.”
She said workers are making more on average since the company reversed its policy of using tips to supplement wages in February. Instacart declined to say whether the average included tips. The company also said it saw “no disruption to or decline” in customer orders or quality of service during the November strike.
For Instacart, these drastic pay changes coincided with a period of rapid growth, intensifying competition and a massive influx of cash. The company has raised $1.63 billion since March 2017 and is accessible in 80% of American households, up from about 60% at the end of 2017.
The company has also expanded to offer shopping from more than 300 retailers, such as Kroger, Costco and Publix, which give Instacart a cut of transactions. Instacart has a nearly 70 percent share of the grocery delivery market, according to research firm Edison Trends.
Grocery delivery has thin profit margins. But investors pumped billions into on-demand delivery startups because contracting workers eliminated the need to maintain a fleet of cars or invest in infrastructure, shifting the risk to gig contractors who make up a larger part of the workforce.
This setup also allows companies peak flexibility depending on demand for their services. Many gig workers, however, complain that companies exert as much control over their behavior as an employer, pressuring them to take on low-paying jobs and punishing them for rejecting a gig by kicking them off the platform temporarily. Instacart contractors have to work 30 hours a week for three weeks in a row to qualify for early access to choose shifts.
In the three years since she started organizing, Bain said, interactions between activists and Instacart became a “high-stakes game of tug of war.”
Instacart announces a pay change. Workers push back by walking off the job or publicly shaming the company on social media. In response, Instacart would make some concessions and alter the proposed changes.