Instacart ends its shady tipping policy after worker and user outrage

Image: Cyrus McCrimmon/Denver Post via Getty Images

Internet outrage might feel tiresome sometimes, but it can also be a force for good. 

The grocery and food delivery company Instacart has changed the way it pays its gig-economy workers, according to BuzzFeed. Following the outrage and worker organizing that occurred after several reports detailed the company’s payment structure — in which it used tips, not company revenue, to cover base wages — Instacart CEO Apoorva Mehta told delivery workers in an email that the company would reverse its policy.

“Based on your feedback, today we’re launching new measures to more fairly and competitively compensate all our shoppers,” Mehta wrote. “Tips should always be separate from Instacart’s contribution to shopper compensation.”

Instacart’s move, though retroactively admirable, is the latest example of the tech industry’s habit of adjusting policies designed to bolster a company’s bottom line only after public outrage ensues.

Over the last week, reports from NBC News and the New York Times publicized the unsavory-seeming way that Instacart, as well as fellow delivery service Doordash, compensated the people who make deliveries (called Shoppers, in the case of Instacart). In November 2018, Instacart instituted a new policy that guaranteed a base pay of $10 for all deliveries. 

Great, right? Not so much. 

On Reddit and other forums, Shoppers showed how any tips they received were being used to make up that $10 — as opposed to adding the tip on top of the base pay. DoorDash instituted a similar policy in 2017. And workers say it has reduced their income by 30 or 40 percent, according to NBC.

The practice gained the media’s attention after one man’s story went viral. After receiving a $10 tip, he only received a payment from Instacart of $10.80. When he asked Instacart why his tip wasn’t showing up, they told him it was because the tip had been used as part of the base pay. A post by the advocacy organization Worker Washington titled “Earn eight cents an hour by delivering groceries with Instacart!” sparked outrage, a petition, a class-action lawsuit, and even attention from lawmakers. 

Now, two days after the NBC article publicized the worker’s story, Instacart won’t use tips to cover the promised based pay. Mashable has reached out to Doordash to ask whether it is considering taking similar action. We will update this story when and if we hear back.

This isn’t the first time user feedback and press attention have caused a tech company to change course. Patreon famously reversed changes it made to its payment structure that put fees on patrons after its community complained — that move ended up earning them the good will and loyalty of Patreon users. But several other companies and ideas have gone belly up because of internet outrage. The Twitter response to the ill-conceived idea to basically turn homeless people into WiFi hotspots caused the charity behind the idea to abandon their plan. And who can forget Bodega, the company whose business model and name so enraged the people of the internet that it had to rebrand to Stockwell, and no one has heard a peep from them since.

Many tech companies claim to be disruptive forces for good in their communities. But too often, decisions made in a Silicon Valley conference room end up duping customers and users, and squeezing as much money out of they can from the gig economy workers that power the system. 

Public oversight has so far proven to be these companies’ most effective moral compass. Otherwise, that compass often points to more money for companies, and more problems for workers.