Instacart, the $2 billion grocery delivery startup that recently announced an extended partnership with Whole Foods, has slashed pay for its drivers and shoppers in major markets like San Francisco and Los Angeles, The Wall Street Journal reported earlier today.
Here’s a nugget from the email, obtained by TechCrunch, that Instacart sent to shoppers in the SF Bay Area:
Instacart is a growing company. From time-to-time, based on order volume, efficiency, and delivery costs, we need to evaluate the rate that we offer shoppers. By making these adjustments, the Instacart community will be better positioned to grow together.
Your success is important to us and we recognize that the Instacart community can only be successful if you are successful. We’re working hard to help you fulfill the largest number of orders possible while creating a great experience for customers.
These efforts are designed to help you become more efficient and, therefore, earn more.
Instacart notified the shoppers earlier this month, saying that people who collect pre-packed bags from grocery stores will earn $1.50 per drop-off, which represents a 63 percent cut. Previously, drivers made $4 for doing the same task. For full-service shoppers — those who shop and make deliveries — they will make $7.50 per delivery and 25 cents per item collected, or $2.50 per batch, whichever is greater. They will also receive 100% of the tips. Before, full-service shoppers would make $10 per delivery plus half the tips.
“They try to rationalize that you get the tips, but people don’t always tip,” Rita, an Instacart worker in the San Francisco Bay Area, told TechCrunch.
The new payment structure goes into effect Monday, March 14.
“We have made some recent rate changes to reduce variability in how much shoppers earn, and we are constantly innovating to help shoppers get more orders,” Instacart said in a statement to TechCrunch. “After these changes our shoppers will earn, on average, an effective rate of $15 to $20 per hour, which is both in line with historical levels and strongly competitive within our markets.”
Here’s the full text of the email:
Subject line: Instacart: Upcoming Payment Rate Changes for Full Service Shoppers
Upcoming Payment Rate Changes for Full Service Shoppers
Full Service Shoppers,
This email is to notify you that Full Service Shopper payment rates will be changing on Monday, March 14th. We believe that open communication is really important, so we want to share with you what changes we are making and why. Please read this email for further details.
Why is this change happening?
Instacart is a growing company. From time-to-time, based on order volume, efficiency, and delivery costs, we need to evaluate the rate that we offer shoppers. By making these adjustments, the Instacart community will be better positioned to grow together.Your success is important to us and we recognize that the Instacart community can only be successful if you are successful. We’re working hard to help you fulfill the largest number of orders possible while creating a great experience for customers.
These efforts are designed to help you become more efficient and, therefore, earn more. Here are some of the improvements we have made recently and will continue to develop:
– Streamlining the Shopper App to remove unnecessary clicks and screens
– Improving scheduling and routing to reduce time in your car and idle time
– Adding store locations and modifying coverage areas to reduce driving distances
– Improving the catalog to reduce time spent on replacements
– Improving the communication flow between you and customers regarding replacements / refunds
– Increasing deliveries per batch
– Offering shadowing opportunities for Speed and Accuracy tips and tricks
What is the new payment rate?
Beginning Monday, March 14 the rates below will be in effect. Based on historical data we expect average hourly earnings to remain in line with what Instacart shoppers have earned in the past, with top shoppers still having the ability to earn $18 – $20 per hour. As always, earnings will vary based on order volume, order size, and tips which is often a direct result of how efficiently and accurately the order is shopped.Updated Payment Rate Details:
All Zones (San Francisco, South Bay, Southern Peninsula, Northern Peninsula, San Jose & East Bay):Full Service – Non-Costco Orders
– Per Delivery: $7.50
– Additional Commission (per batch): $2.50 total or $0.25/item, whichever is greater
– Tip: 100%
– Example: On a 20 item order with $7.30 tip, a shopper would make: $7.50 for delivery + $5 item commission ($0.25 * 20 items) + $7.30 tip = $12.50 + $7.30 tip = $19.80
Full Service – Costco Orders
– Per Delivery: $10
– Additional Commission (per batch): $2.50 total or $0.50/item, whichever is greater
– Tip: 100%
– Example: On a 20 item order with $9.00 tip, a shopper would make: $10 for delivery + $10 item>commission ($0.50 * 20 items) +$9 tip = $20.00 + $9.00 tip = $29
Full Service – Completing Delivery-Only Orders
– Per Delivery: $1.50– Tip: 100%
– Example: On a triple delivery batch, with $6.50 tip on Delivery A, $9.00 tip on Delivery B, and $13.00 tip on Delivery C, a shopper would make: $4.50 + $28.50 tips = $33 for the three deliveries
Additional Notes
– A $12.50 hourly guarantee inclusive of tips will remain in place for new shoppers for their first 20 batches
You may have questions and we want to be available to you to answer these questions and address any concerns. Please email Shopper Happiness at shoppers@instacart.com with follow-up questions. We appreciate your understanding and continued focus on delivering the best experience to your customers.
–
Instacart Shopper Team
shoppers@instacart.com
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