After Worker Backlash, Instacart Decides To Not Get Rid Of Tips

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A day after we told you about workers’ unhappy response to Instacart’s plan to do away with tips and replace them with a “service amount,” the online grocery delivery service has decided to keep the tip option open.

The idea behind the policy change, which was to begin in certain markets next Monday, was to make Instacart drivers and shoppers less reliant on tips from customers, as some 20% of users were not allocating a worthwhile tip on their orders.

The workers’ base pay would be bumped up and customers would have the option of choosing a “service amount,” but instead of that money going directly to the drivers and shoppers that had done the legwork on an order, it would be pooled and used to help cover the increased base pay. There are also promises for periodic bonuses based on customer feedback.

But in a statement released Friday afternoon, Instacart says that it has decided to move forward with both the service amount and the tip option.

The new service amount will first show up on Oct. 17 for Instacart users in San Francisco and Washington, D.C. The rest of the country will see it on Oct. 24. The voluntary tipping option will remain in all markets.

“We heard a lot of feedback from our shopper community,” explains Instacart in its statement explaining the decision. “While our shoppers liked most of the changes, they did not like the fact that we were removing tips from our online platform. Taking that feedback into account, we have decided to continue to accept tips as part of this change.”

While the company maintains that the service amount update was made with the best interests of shoppers in mind — allowing “shoppers to earn more pay on busy days, have greater visibility into weekly earnings and earn a more consistent amount,” a rep for the company tells Consumerist that the tweak was the “best solution.”

How Will It Work?

Instacart says that the previously announced “service amount” addition will remain and function in the same way under the re-revamped policy.

This means that customers will pay a 10% service amount at checkout by default. These funds will then be used to “guarantee a higher commission to all shoppers,” the company says.

Customers, however, will have the option to change the service amount selected to 0%, if they so choose.

Instacart claims that by keeping the service amount option, shoppers will no longer need to depend on tips for the majority of their compensation.

And by keeping the tip option in the checkout process, the company says it is allowing customers the ability to reward shoppers who have gone “above and beyond.”

A rep for the company suggested that if a customer, for example, ordered six cases of water and asked their shopper to deliver it up two flights of stairs, they might want to reward the worker for exceptional service.

The tip area will function the same as it currently does under the new system, meaning customers can set a dollar amount to tip before or after the order is completed.

While the new system essentially customers the option of paying more, or not, for deliveries twice — a service amount and tips — the company says they shouldn’t feel obligated to do so.

Asked if there was concern that customers might feel burnout from both the service amount and tips, the rep for Instacart tells Consumerist that customers shouldn’t end up paying more than they used to.

Skeptical Response

Part-time shopper “Kevin” tells Consumerist that the tweak could be more confusing than the original changes an puts the burden of shoppers’ wages on customers, not the company.

“The problem lies within shouldering the entirety of its worker’s income onto the customer,” he says. “Many people will wonder, what is a service amount if not a tip? Am I supposed to tip twice? Is the service worth using with all these extra charges?”

In Kevin’s opinion, Instacart should either keep the new commission policy and use its own profits from revenue to cover the pay increases, or return to the original, simply tip options.

“Any system that forces price hikes on customers in order to feed its workforce is a broken one,” he says.

Matthew, a shopper in the Chicago area, echoed concerns that the new system might be confusing for customers.

“Why would someone opt to pay the company free money, when they would rather give it to us, the people they see working,” he tells Consumerist, adding that when you add all the extra things to the app, it doesn’t give customers time to think.

He suggested that the company stick with a simple mandatory delivery fee charged by similar on-demand services like UberEATS, Postmates, and others.

But in the end, he says the change signifies that Instacart is listening to shoppers.

“It’s a good step, but they’re going to probably end up doing something else again, and we’ll have to keep fighting it,” he said. “Some people are probably crying happy tears right now.”

Shopper Shannon tells Consumerist that she’s oaky with the tweak, as long as it means she and her co-workers are able to keep their tips.

If Instacart “keeps the service fee for themselves, then great,” she says, adding skeptically that she’s not sure that’s how it will work.

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