From my perspective Instacart is stealing from its customers and workers by doing this. I'm a huge fan of instacart (my fiance and I use it regularly), but this is definitely going to push me away from the platform. At a minimum I'm going to be tipping in cash.
https://medium.com/@workingwa/instacart-heres-our-22-cents-n...
This is 100% wage theft.
It's immoral as fuck to steal tips. I don't care if it's legal. If I'm a customer tipping the person a certain amount I want to make sure it's actually helping that person and not just lining the pockets of their employer, that's absurd.
So you have incentive to report 0.0 tips. But then our manager at PizzaHut let go everyone who reported 0.0 tips (when asked why, he said they called customers to confirm we did receive tips).
And that's not only PizzaHut, that's everyone doing that, at least in NJ.
Any dispute will go to a monkey court instead.
It depends on the agreement between Instacart and delivery staff.
Do the right thing. Take a stand for human decency and make a compromise by closing your instacart account now. Absorb the inconvenience and do your own shopping. And make sure to tell instacart to (insert profanity of choice) if you can while closing your account. That behaviour is low down and dirty. Shady craigs list used car dealer level stuff.
I just walked three blocks in the rain to the local grocery store to pick up stuff to make dinner and food for tomorrow. Not like I was jumping for joy and made a dash for the door. I didn't want to, but I did. That's life.
I haven't used Instacart since then.
It's also possible that instacart will lose money on the sales where they can't scam tips; that means you can use the service and pay the worker well and punish instacart and increase the incentive for them to change their policy.
Using Instacart is a luxury in the first place, but having everyone close their account only hurts the very people you seem to be for. In case you missed it in the article, there is a workaround so that your tips are correctly considered, or you can always pay cash: http://www.workingwa.org/22cents
I've tipped a lot on Doordash. I feel ripped off.
My company regularly used Doordash for years and made a point of tipping on orders. Crazy.
I think this a danger of contracting for VC-backed "gig economy" services like Instacart and Uber. They often subsidize the cost of the service using funding (billions, in the case of Instacart and Uber) in order to quickly attract customers and workers, then reduce the subsidies once they are established.
It's not right, but at this point gig economy workers should expect it and plan accordingly.
Now it seems they skip items, replace it without asking and the earliest delivery is tomorrow. And the produce has a lot to be desired. It'll last two days and already looks crappy on delivery. I think they are in such a rush they just grab whatever.
The best thing for any app service, keep 20 in singles and just tip cash. I honestly don't know how the app tipping works but I have a feeling the full amount isn't going to the person.
[1] https://www.cambridge.org/gb/academic/subjects/management/bu...
[2] https://www.npr.org/sections/money/2019/01/18/686665609/epis...
If that doesn't work then of course I'm going to drop their service. I just believe that supporting worker led actions is the best way to push change at this very moment.
I use Uber from time to time. Knowing full well that they have some practices I admonish. I use Google, Microsoft, Amazon, Safeway, etc. I try to be a better consumer with products but it doesn't always work.
I think we can approach this without the pitchforks and realize we all do this to some extent. The OP recognizes the problem and suggests they'll change their behavior. That's a win.
Parent - good luck moving off of the service. It's hard to swap something you've come to rely on out, and good on you for recognizing that as a consumer you need to make a change.
Seems like a not-bad approach.
Why don't you do something productive with your outrage, like changing your own lifestyle and keeping it to yourself? Or better yet, raise awareness without bullying someone else's attempt to process their frustration in an even-tempered way.
I have zero illusions that enough people understand the free market to be patient and allow for this to happen. We need to teach more economics in grade school.
why should it be?
ahh whaaat? mashes downvote button
since you are still reading, what is the exact thought process here, can you articulate this? So the service works and still provides a convenience for you, but is this action being masqueraded as the most effective way to get the company to change a policy amongst all other possible actions? Is it just to not "support" a company that does a single thing you disagree with? Is it something else?
I think there are more effective ways of bringing Instacart into compliance with your ideals. Isn't that a possibility?
edit: and no responses by time of writing while on the way to getting downvote censored. Be interesting to see if it flips when a different crowd gets off of work.
I don't think that supporting tax evasion should be a primary reason for tipping in cash.
But there are other reasons why tipping in cash is a good idea, such as making sure that the money actually goes to the worker, and knowing that they'll have immediate access to it, rather than having to wait until their next paycheck.
My understanding is that the Fair Labor Standards Act does not allow for employers to whithold tips.[0]
Gratuity/tip is a legally recognized concept. You can't just throw the word in your app and do what you want with the money it generates. There are legal expectations around how the money goes from the customer to the worker.
[0] https://www.ramoslaw.com/is-your-employer-committing-wage-th...
[edit] Added "not"
That having been said, the concept of defining contractor wages in relation to customer tips is new to me. I could see a legal argument being made in the employer's favor if the worker gave due consent to the transaction.
The idea here would be: Instacart states somewhere on the order prior to pickup 'if you choose to accept this order, you will receive $10, of which $.80 will come from us.' Since the delivery worker isn't running a 'shift' as an 'employee,' but just coincidentally happens to be running Instacart orders for 10 hours straight, this counts as one of many transactions that they've accepted and hence waived the legal right to complain about.
If this legal fiction sounds absurd to you, you're not alone.
Only Instacart believes this.
That's simple fraud. It's like going door to door collecting money for a charity and then just pocketing the money. Potentially Instacart will need to refund those 'tips'
The strange thing about this is that it may actually be fraud against the people buying from instacart. The ones giving the tip. I'm curious then what kind of damages a customer could sue for beyond the amount of the tip. And I'm also curious if instacarts TOS for customers forces arbitration and prevents class action lawsuits.
This should be interesting to watch unfold.
I think this sentence says the opposite of what you intended it to.
But I have never worked in a restaurant so I could be completely wrong.
The problem is that they use the tip as an excuse to pay basically nothing. It's not acting like a real tip.
I feel like for someone somewhere in the attorney general's office, prosecuting these should be someone's full time tax paid job.
Suppose that we decide to call dogs cats. In that case, what is a domesticated canine? Answer: it’s a dog, whatever you choose to call it.
(Pretty sure I butchered that, but hopefully the point still came through.)
It doesn't only take away responsibility of paying, but adds emotional and mental load cost to the customer. It's hilarious that people accept that in exchange for an illusory level of control (you being the mini manager/boss of your service task) over quality of service.
In places where the tax and all other costs are already factored into the price, tipping is reserved for truly exceptional service.
Or, alternatively, maybe you don't live in a country with a tipping culture. And if so, then tipping doesn't really affect you.
People like to tip. I like to tip. Waiters and waitresses like to be tipped. My wife used to work as a waitress and would clear over $300 a night in tips alone. It's only a small minority of people who are against it.
Sorry, waiting tables is not a really complicated skill. Tipping is not related to quality of service.
Most people don't think about tipping. They do it because it's expected and maybe the waitress is hot. If pressed, they would likely prefer not to do it.
Servers are also some of the most disingenuous people I've seen when arguing about tipping. Because that top tier knows they can make a lot of money in a low-skill job. They like to complain about how much money they make and how screwed over they are by tips, but when restaurants pay a fair wage and eliminate tips, the staff abandons them for places that do tip. Why? Money.
Waiters and waitresses HATE to NOT be tipped in a world where it's their livelihood. And studies have shown that this leads to racist, classist, and sexism within the service industry.
- Studies show that non-caucasians receive worse service because they are perceived as likely to tip less.
- Studies show that a high class restaurant server gets more in tips than a medium class restaurant, even when the food and service is of lower quality.
- Studies show that men often get tipped less than women for similar service.
Like any erratic and arbitrary system there will be some winners who make out well, but it's not a great way of compensating people for work.
I would happily do that if I knew the server would earn a living wage even without my tip.
No one is talking about making tipping illegal. Killing tipping culture means not making food workers dependent on customers' largess and generosity to make a living wage.
Even in most countries without a tipping culture, you're free to hand over additional money to your server or cook if you feel like it. No one is stopping you.
As a non-American I had to read the article a few times to understand what the problem was - I thought this was just how tipping worked in the US.
I always read of service workers who only manage to "stay afloat" by the tips they earn, this seems to be almost the same thing, but reading it again I can see it isn't.
Here in NZ there is sometimes a "tip jar" at the counter of a cafe where you might throw in a coin or two (say $1 or $2) as a way of thanking the staff overall. High end restaurants will also offer a place for you to add a tip if you feel you got exceptional service, but there's also no hard feeling or death stares if you don't put anything there.
I hope tipping dies in the US and people get paid fairly regardless. But then you have bigger problems to solve first of all :)
The tipping system still baffles me (and I never know when I am supposed to tip or not .. )
From what I gathered, it comes from the prohibition as a way to supplement hotels and restaurants personnel wages (since they were making less in that context).
Why it persisted to nowadays and has been extended to many service works baffles me to no end.
Taxes are also added at checkout when you buy e.g. groceries, so it seems pretty cultural to have a very opaque 'what you pay' system.
You could tell someone they get a new job paying $30/hour and you are selling them this house for $10/hour. After everything is said and done, those numbers could be the same... what?
Expected tip amounts have also been going up, I assume now because companies/restaurants want to hide a price rise behind it.
Food prices have gone up since increase in minimum wage last year, and default tip option is 18% at majority of the places. Oh and that 18% counts the 13% tax, so you are tipping more than 18%.
These sorts of stories confirm my feelings about tipping that I’ve had all along: tipping is just a way to subsidize employers by pitting employees against customers and guilt-tripping the latter.
Follow-up update: Aren't all the gig economy start-ups (Uber/Uber Eats, Lyft, Caviar, Eat24/Yelp, Fiverr etc.) potentially doing the same thing? They are probably exploiting the same loop-hole in whatever set of laws. It might be just a UI update, but I remember seeing a message of the form "our drivers get 100% of their tips" in Uber Eats just yesterday, which is sort of like saying "we are following the law about tips".
The way they keep working to create opaqueness around their tipping to the point that last year Drivers were handing out pamphlets explaining how to remove the "Service Fee" (which nobody but Instacart gets) to tip the drivers was a huge red flag. Removing the service fee was on a 2nd page you had to go to and by default I believe was 10% of your order. If you've never used Instacart the groceries in my experience have been quite a bit more expensive than they'd be in stores so they're making revenue on that end already.
I started using them a bit again this year and now there's only a "Driver Tip" section with I believe a hard locked in service fee. Does the shopper get the tip as well? Is the driver the shopper as well now? In my situation the shopper is doing FAR more work than the driver. I want to tip the people well because I know Instacart doesn't pay well, but I don't want to give a $26 tip for $130 in groceries (which is usually 3-4 bags) going to the person who only spent 10 minutes in a car to drop my groceries off at my front door (and Instacart drivers never read the Delivery notes, I've had to walk out and walk them over to me each time last year that I ordered).
Is the tip split between the shopper and the driver? It only says "Driver Tip".
Everything just seems to be disgustingly opaque with this company and I really do not feel right even using it anymore so I've used it incredibly sparingly (maybe 3 times last year) as of late.
edit: I just checked, there's an info icon and it says 100% of the tip goes to the driver. So should I not tip based on the entire process of shopping and delivery? I don't even want to use this app anymore because I shouldn't have to stop and waste time considering these things.
This company just screams deceptive to me. Guess I'll be done with it.
According to the screenshot of Instacart's email, they confirmed this is accurate and was most definitely not a mistake. And according to the article, Instacart has doubled-down instead of apologizing.
“We gave the driver 100% of the $10 from your tip, and withheld our $10 from their wages.”
Are cash tips an effective method of keeping grubby corporate hands out of it?
"Shoppers appreciate tips as a way of recognizing great service and 100% of your tip goes directly to the shopper delivering your order. For more information about tipping, follow this link."
Source: https://www.instacart.com/help/section/200761924#213895126 payment/service fee section
If confirmed this is straight out lying to your customers
Airbnb: https://www.bing.com/search?q=site%3Anews.ycombinator.com+ai...
Stripe: https://www.bing.com/search?q=site%3Anews.ycombinator.com+st...
Cruise: https://www.bing.com/search?q=site%3Anews.ycombinator.com+cr...
etc.
Just pay your workers minimum wages at least and make tipping optional.
I shouldn't have to tip the "employees" just because a company can get away without paying even minimum wage to its "employees".
There is something seriously broken with the whole tipping thing.
But does anyone else find it obnoxious that all these digital services exist, often starting out with no tip straight pricing, then tipping re-appears, and then you suddenly need physical cash to morally use the service at all?
Obviously workers should get fairly compensated. The problem is tipping culture itself, just set a price that customers are willing to pay and workers can enjoy a reasonable standard of living.
Plus the whole tipping thing is extremely inconsistent. Floral delivery? No tip. Pizza delivery? Tip. Some brands support credit card tipping, others don't, and even the ones that do you have to research how much using it hurts the employee...
The US needs law changes that outlaw tipping. It will be culturally painful while we adapt but once we do both workers and customers will be better for it.
It's obviously a terrible system, but is this different from how most everywhere with tipping in the US works? I've never worked a tipped job in the US.
Some engineer somewhere decided or was told: Hey if someone gets a big tip, lets consider that as part of their pay and not pay they what's due. And then they just blindly do it?!
I can understand that an engineer might just be following requirements, but _someone_ made that decision--probably a PM, or does this go higher than that?
It seems that companies (FB, Google, etc.) are almost going out of their way to be evil!
We need the equivalent of a "known to do evil" blacklist: companies and employees known to have been working on specific products/projects should be black-balled:
You wrote a VPN to collect information off people's phones? Good luck getting work with another tech company. You wrote/designed functionality to get kids to play games that require money and is hidden from their parents? Screw you. You wrote/designed a feature that said that people should be screwed out of their wage because they got a big tip? F you.
Source: https://www.reddit.com/r/doordash/comments/963kyv/if_you_are...
I mean, it's hard to fathom how you could get worse than $0.80. But less than half that? That's worse for sure.
Sure, you can try to use technology and innovation to reduce overhead. That's the pitch usually, I think. If you can provide a service with a lower headcount, you can be much more cost-efficient. But it seems a lot of the companies aiming for disruption aren't able to actually do that, so instead they reduce payroll costs by simply refusing to take on the responsibilities employers are traditionally expected to take.
It'll be interesting to see how long this model of "disruption" can be sustained.
As a YC alum, I'm disgusted to see a YC company behaving like this.
Instacart: It shouldn't have to be said, but you don't cheat your customers and workers. Whatever internal rationalization you've developed for this practice is just that — a rationalization.
Stop cheating people. If your unit economics are so broken that you can't survive without deceiving and cheating people, then shut down instead.
Tipping has ruined this whole new batch of convenience services for me.
Employers love it since they can underpay. Some employees love it since they can make a very good living but that's a fraction of the total. But overall it creates an economy subclass that's constantly struggling. They have trouble paying the bills. It's tough work plus they have to deal with upset customers even though they likely had no control of the situation.
I'm a fan of a permanent surcharge on the bill rather than having to deal with giving a tip. Pizza delivery places have a delivery charge now plus a fuel surcharge, as far as I am concerned they can add a service charge too.
Yes, services will become more expensive. But over time an economic equilibrium begins to appear at which time we can reevaluate and change. But the last thing we need to do is bring it into the future.
Instead of delivery people blindly accepting orders and hoping for the best, the people who are requesting the delivery should have to set a rate at order time and make the full order and destination visible so couriers can decide if it's worth it and make a counter-offer if it's too low to be worth it.
If you ever go read what the workers are saying in subreddits for these services, it's clear that the incentives for quick and accurate deliveries just don't line up with the current gig system.
That's an interesting idea --- reminds me of e-coins with variable transaction fees. You can offer more if you want people to work on your transaction faster.
Anyway: Are tips taxable in the US? Here in Germany tips are tax-free under certain conditions: If I give it directly to the barber, waiter, etc., it is a non-taxable event, while if the employer collects the tip and divides it up under all employees it is a taxable event.
There is some back-and-forth in that thread, but the gist of it seems to be the same as here, where Amazon takes tips into account when they calculate the base wage, which can result in getting a low base wage if there's a large tip.
https://help.goodeggs.com/hc/en-us/articles/360007378212-Do-...
I have no stake in them but it's interesting that they addressed this at all, and well before this instacart controversy.
https://www.wonolo.com/blog/best-gig-economy-apps/
I guess this Wonolo service is for choosing the right services to work for. Now I'm wondering how many Wonolo clones there are. :-)
He didn't actually get 80 cents an hour, but he also didn't get the wage+tip he expected. Instead, Instacart got tipped, and he effectively got the regular wage. I hope!
But here are the vile people responsible for this practice: https://www.crunchbase.com/organization/instacart#section-cu...
I'm often thinking about Mr. Pink in Reservoir Dogs https://www.youtube.com/watch?v=V4sbYy0WdGQ he makes the point I'm also trying to make. People should get paid for doing service and not need to rely on pittance of the customers because their bosses don't calculate the real cost of doing business. If it were up to me tips would be forbidden.
In Japan (as far as I understand) it's an insult to tip, it's almost like: "This business probably isn't doing well enough to pay you a proper salary, so here's a little something extra."
Service disrupted because bus driver/garbage collector / teacher/hotel employee strike? How dare those selfish underpaid and overworked peasants stand up for reasonable hours! They should consider themselves lucky they have a job at all! (It should be: how dare the corporations or federal agencies pay so little to their employees that their only recourse was to risk their livelihood by walking off the job)
How about that case where the teacher used her health insurance to pay for an impoverished student's pills? She committed insurance fraud, she's just raising rates for everyone else! (Never mind that rates will be as high as an insurance company can legally get away with in this insane profit driven healthcare industry)
Or the housing crisis. Stupid proletariat, taking loans they knew they couldn't afford! Why didn't they educate themselves? (Instead of 1. Why weren't banks doing due diligence 2. Why were banks allowed to not do due diligence 3. Why the fuck don't they teach us basic financial skills in elementary school?)
It doesn't work that way either, but that's the rationale.
Forcing people to tip to ensure people get paid enough money is a consequence of the system, not the reasoning why the system is implemented.
In reality, the system in the US is what it is because of the mostly random process of cultural development.
Changing cultural norms is not easy in any society, even if you have good logical arguments against them.
Is this not Instacart doing the same thing where your wage is .82 plus tips as long as that amount is above x wage. If it’s below x they will pay you x.
However in this instance it’s an issue because the tipped employees are not often making more than x even with tips therefore the consumer is misled about who their tip money is going to.
I can't see in either case how its sustainable business practice to offer gig work, but claim the tip is the pay.
I really wish there were penalties reserved for CEO and Board of these startups, which couldn't be passed on to shareholders or customers.
Flaying alive feels like it might be about all we've got left.
Happy to put on an old crone's clothes and sit below the scaffold knitting, while it happens. Maybe the sans-culottes had a point?
If someone is willing to be paid $10 to deliver groceries, does it matter who is paying them $10 for it?
I've never used instacart before. Is the verbiage around leaving a tip lead the end user to believe that they are giving it directly to the person making the delivery?
Who should the tip go to?
- To the owner who spent/spends a fortune running it in LA?
- To the chef who catered to our needs without seeing us?
- To the person who immediately and happily tended to us everytime we raised our heads and looked around
- To the person who cleared the used plates and never let us wanting for crockery
- (we tipped the valet guy separately)
I wonder what as a customer should I do? How do I know the share goes to all? I cannot pay cash for that amount. I carry barely $5 with me in cash.
In any case, the owner's revenue is based on the menu pricing; if the owner wants more then the prices get raised. For anyone else, the expectation is likely to be that tips go through the server and are divided from there if they're divided at all. Don't stress too much about tipping the other staff unless someone's gone far above and beyond.
-- if TIP > minimum wage -- does Instacart record a negative -$ adjustment
such that a person's payment will only ever be the maximum payment, regardless of how much tip the customer gives?
That would really be egregious.
Disgusting, reprehensible, and frankly unbelievable. I've never used Instacart and now I never will.
> Tips have always been included in our calculation of earnings and it helps provide a reminder to customers that you are providing a valuable service.
Being fed garbage like that is pretty insulting, though it's interesting to see how far they're willing to stretch logic to try to put a positive spin on it. I mean, "we reduce your earnings so you can feel useful"? Man, logic broke right there.
In Russia, distinction is clear in law. Do you pay her regularly? I. e. at least one a month? Then she is employee, no matter who says what.
I understand less protection for workers, less vacation, less regulation overall, this is all understandable. I don't understand why facts are ignored in favor of words.
The Russian law may seem clear, but in reality it's just a stand-in for a more complex analysis.
Basically, all floor employees salary is commission based. If you don't get enough commission, they will pay you minimal wage but will get rid of you in several months, otherwise your sale commission kind of "fills" your salary until it gets to minimal wage, and only then starts to increase your wage.
Won't be surprised if most of retail works in similar way.
The whole gig thing is basically passing the risks associated with having employees (injuries and managing them) / sales variation risks (having to pay people when sales are up or down) onto folks who are no longer employees.
The idea that they'd take even more from their contractors based on other factors just seems natural.
Maybe a "franchise fee" type thing is next....
https://www.instacart.com/help/section/200761964#11500564332...
The whole point of the tip is that it is supposed to be a bonus on top of the worker's normal pay. Instead, here it is displacing the money that Instacart would have otherwise paid them.
If there was a popular 3rd party app for tipping directly to any individual, regardless of where they might be or whether they're working or not, that could actually prevent companies from snooping in on the tips. Even at restaurants.
I read through the blog post on Medium and the article, but couldn't find any case where the customer had tipped more.
Is $0.80 the minimum payment they will make, or will it decrease further – negative?
Integrate seamlessly into checkout experience (like Affirm does for micro lending).
This could prevent Instacart etc from reducing hourly rate based on tips (because they don't have access to that info).
They're often exploitative of workers and this is just exactly the kind of thing that reinforces my decision to never stay at an AirBNB, never take Lyft, Uber etc.
I am not an instacart user myself but I use similar services and I expect that any tip will be delivered to the driver.
I'd be pissed off to find out otherwise.
Instacart won't see this transaction and therefore won't reduce their wages.
Less convenient. But this policy is unfair.
It's company responsibility to set the pricing policy so everyone one gets paid.
If they don't pay their workers, it's not my problem.
Others have said why. I will spend some time to make others aware.
I really hate this sort of thing. Viscerally.
My opinion is abolish tip culture.
Edit: I meant shouldn't.
The gig economy has so many problems like this it is silly.
Why's Instacart getting the unique bad press?
- lack of empathy: Uber, Instacart, etc. etc. etc., exploiting the poor
- parasitic behavior: aggressive tax optimisation/tax evasion, Amazon employees relying on food stamps for subsistance
- superficial charm: get rich quick
- pathological lying: cf. Facebook denying they ever did anything wrong
- manipulativeness: "make the world more open and connected"
and my personal favorite,
- grandiosity: "change the world!", "solve physics for good!", "be immortal!"
But it's just a case of confirmation bias if you didn't look for counter-examples to try to disprove your theory.
Are the following companies ethically perfect? I doubt it. But I haven't heard much bad about them and they have changed my life for the better significantly: AirBnb, Dropbox, Stripe, Rappi, WhatsApp, Square, Netflix. I bet I could find others.
> Amazon > Facebook
I don’t think amazon and Facebook are startups
Consumers have enough parameters to optimize for: price of groceries, cost of delivery, fair trade, availability of products, delivery speed, convenience, availability of delivery slots, the list is long.
Consumers are relatively good at optimizing for cost, not perfect -- but asking for more than that is unrealistic.
I'm tired of this implication that the poor can never be at fault for anything, because they are so poor. It is an overly simplified sympathy that doesn't always reflect reality.
Why start tipping for outstanding service, instead of setting the floor at $0 for 0 service?
Answer: because people like to pay less for stuff and let the company eat the blame.
They're paying shit wages and thus offering shit quality, because they're offering a service that literally is unscalable. The logistics of laser-guided-bomb-type delivery of groceries from store to fridge is asinine.
Yo, grocery store shopping doesn't suck bad enough to pay someone else to do both the shopping and delivering! I'll pick up the pre-picked-up/bought groceries. I don't need you to delivery them directly to my fridge; I think I can handle that part. Just bring them out to my car when I pull up.
Problem solved, wages go up, quality goes up, I get my groceries. Everybody wins.
This is really much more a story of ethics in software development. Someone had to know they were doing the wrong thing when they wrote this.
edit: No, not going to talk about tipping. Like it or not, it is extremely common all over the world, and unrelated to this submission (which is about lowering "shopper's" compensation to almost negligible levels when tips are given).
If you want to blame someone, I suggest looking for the actual culprit and not a law-abiding company. This has little to do with Instacart and everything to do with state wage laws.
