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Instacart Reverses Course After Backlash From Shoppers Over Plans To Eliminate Tips (techcrunch.com)

Posted by msmash on from the subject-to-shopper's-opinion dept.

Instacart says it is adjusting planned changes to its pay structure for full-service shoppers. The change of heart comes after independent contractors threatened to boycott the grocery delivery startup's plans to replace tips with an optional 10 percent fee collected by the company. From a TechCrunch report: CEO Apoorva Mehta stressed that the decision came from customers looking to continue tipping, rather than complaints from shoppers, which he called a small group that was "very vocal" about the change. However, following removing tips, Instacart received some backlash from shoppers who said they were losing significant portions of their earnings. The backlash went so far as to inspire a boycott among some shoppers, though again Mehta said that this was not the primary cause for returning tipping. [...] Originally, the company sought to raise the overall earnings payout per delivery while removing tips, which was an attempt to make earnings more reliable instead of burst-y as a result of tips. Top shoppers, however, accustomed to getting larger tips because of their performance were concerned that they would lose a significant portion of their earnings. The vocal minority, it seems, was loud enough -- and perhaps so was the customer base -- that Instacart had to reverse course. Update: 10/15 21:25 GMT by M :Title updated to fix a typo. I regret the error.

58 of 97 comments (clear)

  1. Elimanate spelling errors by reboot246 · · Score: 1

    What is "elimanate" anyway?

    1. Re:Elimanate spelling errors by Hognoxious · · Score: 1

      Something that happens to escutcheons in a really weird book.

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    2. Re:Elimanate spelling errors by hawk · · Score: 1

      As in, "I am taking my cat to the vet who will elimanate his testes. :)

      hawk

  2. I've taken 2 Ubers and 2 Lyfts by rsilvergun · · Score: 5, Interesting

    3 times it was people recently laid off desperate for work to make rent and the 4th was a lady laid off from a good paying job as a clerk (work moved to Mumbai) and now making 1/2 as much.

    This isn't the sharing economy, it's the desperation economy.

    --
    Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
    1. Re: I've taken 2 Ubers and 2 Lyfts by NotAPK · · Score: 1

      And all prostitutes "love sex" and just need to pay the bills to put themselves through med/law school.

    2. Re: I've taken 2 Ubers and 2 Lyfts by thundercattt · · Score: 1

      That's exactly it. I was laid off from summer job (not high enough in the Union to work through the winter). I had to do similar jobs through the winter to make ends meet. Big jump to go from making 6k a month to 1600/mth. I delivered pizza, booze, moved items with my truck. Tips often helped.

    3. Re:I've taken 2 Ubers and 2 Lyfts by PrimaryConsult · · Score: 1

      Once Uber/Lyft is allowed in my state I'd do it weekends for a few reasons:
      1. To spite the shitty, shitty cab companies and
      2. Because the heated back seats of my nice car seem wasted otherwise.
      3. Extra cash on weekends would be nice, though won't make/break my bank

      I don't actually care if I simply break even. Anything to make the taxi cartel quiver in their boots.

  3. Tips are frequently non-taxed by Okian+Warrior · · Score: 1

    Although illegal, tips are frequently unreported income.

    That means effectively 40% more of the value goes to the servicer. When the company does it, it's all reported and taxed.

    (And also the thing about tipping for good service, versus tipping across the board.)

    1. Re:Tips are frequently non-taxed by chuckugly · · Score: 1

      Since the tips are paid via the app I doubt your observation has anything to do with this case. Yes, I use Instacart.

    2. Re: Tips are frequently non-taxed by thundercattt · · Score: 1

      In certain fields such as waitress, you have to report tips. Albeit, nobody reports 100% of their tips. Cash based jobs like pizzas delivery don't either

    3. Re:Tips are frequently non-taxed by NotAPK · · Score: 3, Informative

      *ANY* kind of gratuity that is added to the bill automatically, and paid to the employee by the company, is (IMO) by definition NOT a gratuity. It's just the price and should be part of the cost, and it should be paid to the staff member as part of their wage. Slicing and dicing it any other way is just bullshit.

      Here in the UK we pay staff a solid wage and dining prices (for example) are much higher than in the US. When I go to a restaurant I do not generally tip but when I'm really impressed (which is the whole fucking point of tipping) I do throw in some extras. However, when I receive a bill that contains the gratuity added automatically I specifically remove it and tell the manager why I've removed it and that I won't be returning to the restaurant because it's a *scummy thing to do*. Yes, I'm fun at parties...

    4. Re: Tips are frequently non-taxed by NotAPK · · Score: 1

      I knew a lot of wait staff in Vancouver, BC, about five years ago and all of them were pulling in +$70k per year, and that was with an extended 1 or 2 month vacation over the summer (the only decent time to be anywhere near Vancouver).

    5. Re:Tips are frequently non-taxed by Rockoon · · Score: 1

      Although illegal, tips are frequently unreported income.

      sigh...

      The government has more than a few employment classifications that do not require reporting tokes, which are instead estimated.

      --
      "His name was James Damore."
    6. Re:Tips are frequently non-taxed by Ol+Olsoc · · Score: 1

      Although illegal, tips are frequently unreported income.

      That means effectively 40% more of the value goes to the servicer. When the company does it, it's all reported and taxed.

      (And also the thing about tipping for good service, versus tipping across the board.)

      Go to a restaurant, and ask the manager about their waitstaff's unreported income.

      The do keep track of the tips, and how does a tip not be tracked on a credit card payment?

      Been a long time since those 47% freeloaders who wait on us got away with robbing the guvmint of billions to pay for their yachts under the table.

      Now its just cigar boats, and vacation homes in MArtha's Vineyard for the perennial takers.

      --
      The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
    7. Re: Tips are frequently non-taxed by Overzeetop · · Score: 1

      The reality is that they're probably working harder than you are. Source: I'm a former bartender, current engineer.

      --
      Is it just my observation, or are there way too many stupid people in the world?
    8. Re:Tips are frequently non-taxed by PrimaryConsult · · Score: 1

      This is the entire problem. Even if the dollar amount is the same (or slightly higher) the end result is a reduction in direct income for the guy doing the work.

      Honestly I think tips should either be eliminated from society (full stop) or removed from taxation. The current situation simply rewards the unethical.

    9. Re: Tips are frequently non-taxed by PrimaryConsult · · Score: 1

      I never understood that. As a northerner with a similar climate, why do people take vacations in the summer? That's the only time it's bearable to stay home. Save your money and vacation time for a trip to the Carribean (or SoCal/Hawaii for you west coast-ers) in February.

    10. Re:Tips are frequently non-taxed by PrimaryConsult · · Score: 3, Interesting

      Unfortunately laws allow wait staff to be underpaid significantly due to the US's tipping culture. While I applaud your effort to change it, the immediate effect is that you actually did the scummy thing by stiffing the service staff. Then again, theoretically, if everyone did that, we might have this changed.

      Personally I find it stupid that tips are encouraged to be a percentage of the bill. If I go to a discount Vietnamese restaurant or a general chain restaurant, the waitress did the exact same amount of effort, so should receive an identical tip. Yet people yell at me when I overtip at cheap restaurants and (supposedly) undertip at expensive ones.

    11. Re: Tips are frequently non-taxed by NoZart · · Score: 1

      are you as good looking as the gals? ;-)

    12. Re: Tips are frequently non-taxed by Desprez · · Score: 1

      Service industry jobs and environment vary vastly, but typically, there are a couple good days to work, and the rest range from meh to awful. But the thing is, you probably have to work a few bad days with the good days, so your average drops quite a bit.

      That said, some servers are at poverty level earnings, and some are $100K+. It varies quite a bit. Typically, higher menu prices mean more for the server (despite less tables and a higher percentage of tips they pay out to assistants) but state laws and unions have a big effect on earnings too.

    13. Re:Tips are frequently non-taxed by Desprez · · Score: 1

      Well, as menu price increases, you're theoretically getting a higher level of service and food/drink expertise. This isn't always the case, but I'm not expecting the Olive Garden server to have detailed knowledge of the food and preparation. Whereas, if I'm at a world class establishment on Las Vegas strip, I would expect the server to be able suggest the perfect wine, and have detailed knowledge of the menu, and be able to customize an experience tailored to individual guests.

      Not everyone, wants or uses this level of service, but that's what you are paying for.

      Additionally, as menu price goes up, you're going to see a higher percentage of those tips being paid out to assistants, bussers, bartenders, etc. I've see places where the server ends up with only 65% of their tips after they've "tipped out" to others. This is normal.

    14. Re:Tips are frequently non-taxed by RockDoctor · · Score: 2

      Unfortunately laws allow wait staff to be underpaid significantly due to the US's tipping culture.

      Which part of the OP's

      Here in the UK

      wasn't clear? Service staff in the UK do not get much in the way of tips, and never have done. They get their wages. It's only the exceptionally good service that attracts a tip at all. I can't remember the last time I added a tip to a restaurant bill, or any other part of the "service economy. But I do routinely remove added or suggested gratuities on the bill.

      Same with ratings systems on various sales sites. I someone wants to get more than a mid-range rating, then they are going to have to be exceptionally good. Being competent or workaday will only attract a 50% rating, if I bother with the rating system at all.

      --
      Birds are not dinosaur descendants;birds are dinosaurs, for all useful meanings of "birds", "are" and "dinosaurs"
  4. While I'm on the subject by rsilvergun · · Score: 2

    any one else notice that these "Sharing Economy" workers aren't the same immigrants that I always used to see driving taxis? Why haven't the immigrants moved to Uber/Lyft/Instacart?

    --
    Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
    1. Re:While I'm on the subject by stephanruby · · Score: 1

      I think it's all about the low barrier to entry and the fact that doing one of these jobs won't prevent you from looking for another job and attending job interviews when they come up. So if the choice is between looking for a job and staying at home in your underwear watching movies the rest of the time, or looking for a job and driving a little bit so you can pay your rent while you're still job-hunting. The choice is pretty easy.

      There is also the language factor, I know someone who got a low rating on Uber for not being fluent in English (but I have no idea how common this is). He got temporarily suspended for his low rating. He took an online English test supplied by Uber. He got 80% on the test (most likely because a family member helped him), so he got reactivated, but then he got permanently deactivated the second time around because his rating didn't improve and the customer complaints about his English were coming in the same as before.

  5. Gratuity should be illegal by jader3rd · · Score: 4, Insightful

    Tips are a non-advertised hidden cost to a good or service, and make an excuse for an employer to not pay their employees higher wages. I would be much happier if they were eliminated all together.

    1. Re:Gratuity should be illegal by Harlequin80 · · Score: 4, Insightful

      It's also hard for tourists who come from a non-tipping culture. When I go to the US tips are clearly expected, but I have no basis for judging what the should be, or which industries deserve / expect them.

    2. Re:Gratuity should be illegal by Calydor · · Score: 3, Informative

      Seen from Europe, tips are this quaint little way of lording over the working class that you have more money and power than them, and here are your alms.

      --
      -=This sig has nothing to do with my comment. Move along now=-
    3. Re:Gratuity should be illegal by shess · · Score: 2

      It's also hard for tourists who come from a non-tipping culture. When I go to the US tips are clearly expected, but I have no basis for judging what the should be, or which industries deserve / expect them.

      Why do you think it's easier for people who live here?

      I just mostly only bother to figure it out if it's a service I use frequently, like restaurants or haircuts. If some bellhop or shuttle driver really really really wants to get $5 or something for lifting the luggage I just shuttled across the country all by myself, well, sorry.

    4. Re:Gratuity should be illegal by radarskiy · · Score: 1

      No matter how much you tip waiters in Germany, they can't ignore you any harder than they already are.

    5. Re:Gratuity should be illegal by Shados · · Score: 2

      Yup, even for residents its really hard.

      All service industries have SOME tips, the question is how much. And that even varies between states, drastically. And if you get it wrong, expect someone to spit in your food or an asshole cab to kick on your luggage. Doesn't happen often but it happens.

    6. Re: Gratuity should be illegal by thundercattt · · Score: 1

      It's the entitled NA. I've gone to places where it's expected, even poor service. I remember 1 server, our drink order came to say 19, you give $20 at a bar. She goes no, I get $1 per drink tip. That prompted a request for the manager.

    7. Re:Gratuity should be illegal by Anonymous Coward · · Score: 1

      Tips were a "bonus" for exceptional service.
      Now they simply wage payments paid by the customer rather than the employer.

      And its not just tips that are a deception, try taxes and other fees.
      Rent a hotel for $200 a night...well yes but its + taxes, + resort fees+tourism fees etc etc etc.

      NOTHING advertised in the US is ever for the price you will actually pay.

      Why can the US not be up front and honest ?

    8. Re: Gratuity should be illegal by Nidi62 · · Score: 1

      Why are you tipping before you get your food?

      --
      The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
    9. Re:Gratuity should be illegal by PrimaryConsult · · Score: 1

      For my haircut I tip a ridiculously good amount, somewhere in the neighborhood of 200% (still cheaper than a stylist). This has resulted in situations where I walk in and am skipped in front of the line because "I had an appointment" even though I never called :). Since this sort of unspoken benefit is not really possible in any other situation, I stick to 15% otherwise. Hotel maid gets $2/night that they actually had to clean my room. Taxi serviec in my area is shit so they get nothing, but while on vacation I'll round up and add a dollar (significantly more if I was in a hurry and they delivered).

    10. Re:Gratuity should be illegal by PrimaryConsult · · Score: 1

      Airline tickets are required to include taxes and fees.Theoretically train and bus tickets too but they usually don't have taxes and fees to begin with.
      I've been hoping for a similar rule for hotel stays - sometimes staying even 1 county over will yield significant savings over multiple nights, but no one includes them in their search listings.

    11. Re: Gratuity should be illegal by Shados · · Score: 1

      Because I happen to sometimes buy food from the same place multiple times, and human beings have a capability called "a memory".

      (alternative situation: when tipping on your credit card when ordering online)

    12. Re:Gratuity should be illegal by jader3rd · · Score: 1

      than just pay sticker price from the car factory direct.

      And how does one go about doing that? I thought most states made that illegal in the same of supporting local businesses.

    13. Re:Gratuity should be illegal by Harlequin80 · · Score: 1

      I guess because you tend to understand the nuances of your own culture if you live there.

      Where I live you don't tip unless the service has been absolutely spectacular. As it crazy way above and beyond. I cannot actually remember the last time I tipped.

    14. Re:Gratuity should be illegal by Desprez · · Score: 1

      That kind of unspoken benefit works plenty good in bars too, and comes in handy when they are busy. I would think in delivery food as well.

    15. Re:Gratuity should be illegal by PPalmgren · · Score: 1

      Because tipping provides a direct incentive for the worker to excel, and the results show. If the worker doesn't make enough in tips, they get bumped up to minimum wage so they never make under minimum wage...but if they excel, they bring in great money and provide a big draw for customers in high value customer service. Having visited several countries, the average level of service provided in a tipping culture vs a non-tipping culture is quite extreme, in favor of tipping cultures. There are servers and bartenders that make in excess of $70,000 a year through college because they hone their craft and become someone patrons ask for when they go to visit a restaurant because of such good service.

    16. Re:Gratuity should be illegal by Harlequin80 · · Score: 1

      Fair enough. I think experiences vary then as I haven't found any noticeable differences between countries based on tipping. In the US sometimes I get good service sometimes I don't. Australia, UK & Europe are all non-tipping and there are big variations in service depending on the person. Japan is a country where I consistently get good service, but tipping someone there is insulting them. I honestly can't say I got better service in the US.

  6. Re:"Elimanate"? by Hognoxious · · Score: 1

    I'm pretty sure I've had it happen to me. Was only two years back, so you can't reasonably expect them to have fixed it by now.

    Still, at least it didn't turn into a pound sign and an Angstrom symbol in brackets. That's progress, I suppose.

    --
    Confucius say, "Find worm in apple - bad. Find half a worm - worse."
  7. Re:"Elimanate"? by Calydor · · Score: 1

    Personally I just saw the spaces as additional highlighting.

    --
    -=This sig has nothing to do with my comment. Move along now=-
  8. An annoying thing about visting the USA by ukoda · · Score: 5, Insightful

    One of the more annoying things about visiting the USA is tipping. Always trying to figure out when you need to tip and how much. Most of my travel to the USA is business so costs are reimbursed but trying to fit tips in to official paper work is a pain as my country has no tipping so no accounting system for it.

    I have traveled to quite a lot of countries around the world but the USA is the only place where I have had to deal with tips. It leaves me wondering if there are any other countries that consider tips a core income for employees as it apparently is in the USA?

    Tip for USA international travelers. Don't tip in other countries you travel to, unless you have been told it is customary there. It annoys the crap out of the rest of us as setting an expectation that all foreigners tip. Your tipping systems is annoying, we don't want it infecting the rest of the world.

    As a side note we have a 'minimum wage' here (New Zealand) and there is a push to have a 'minimum living wage' where the minimum wage is set to a level that you can live off it. The numbers are not far apart so I suspect it will happen soon. Such ideas as minimum wages and the minimum living wage are gather popularity around world, certainly in first world countries. It sounds like something badly need in the USA before you can phase out your tipping system.

    1. Re:An annoying thing about visting the USA by ukoda · · Score: 1

      As an 'Anonymous Coward' I guess you may be tolling, but anyway here is how it works here. New Zealand's big cities get enough American visitors that staff will understand what you are doing and should have a system to handle it but try tipping in a smaller city or town and the staff will be confused. If it is a cash tip then they will be ok, but they will have no idea how to deal with it on their EFTPOS machine or what to do on the cash register. We have no systems to deal with tips so unless it is cash you are making work for them. If it is cash they then have to either break the law by keeping it all, or work out how much they have give to the IRD (like the IRS) and how they make that payment.

    2. Re:An annoying thing about visting the USA by Dutch+Gun · · Score: 1

      It's not just a thing in the US. However, perhaps you didn't have to deal with tipping because they simply added an extra 10 or 15% to the bill. There are some non-tipping cultures such as China, Japan, S Korea, New Zealand, Australia, etc, but I'm not sure they outnumber tipping cultures.

      --
      Irony: Agile development has too much intertia to be abandoned now.
    3. Re:An annoying thing about visting the USA by ukoda · · Score: 1

      That may well be true, as I note the countries you list are the most common ones for me to visit. From memory tipping is not common in the UK. The key thing you mention is when it is added to the bill automatically. I have no problem with that as it is then simply another cost like a tax and I don't have to work out how much it will be and if it applies. It will also appear on the receipt then so no problem with reimbursement either. The only catch then is mentally preparing to pay more that the listed price. Mind you that is a other annoyance in the USA, the retail prices do not include sale tax, which varies a lot by state and types of goods. Here the sales tax is always include in the retail price, what is listed on the shelf is what you pay at the checkout.

    4. Re:An annoying thing about visting the USA by jittles · · Score: 1

      He trolled you with a Donald Trump parody.

    5. Re:An annoying thing about visting the USA by RockDoctor · · Score: 1

      From memory tipping is not common in the UK.

      This is correct.

      --
      Birds are not dinosaur descendants;birds are dinosaurs, for all useful meanings of "birds", "are" and "dinosaurs"
    6. Re:An annoying thing about visting the USA by jimmux · · Score: 1

      I don't think the information in that link is reliable. I can't speak for most countries, but for Australia it's just wrong. No tipping is ever expected here in any circumstances. For exceptional service it may be offered, but even then it would be a small token amount, like rounding up to the nearest whole note.

      The suggested amounts for Indonesia and France seem high, too. Or maybe I have only traveled with very cheap companions.

    7. Re:An annoying thing about visting the USA by ukoda · · Score: 1

      I don't think the information in that link is reliable. I can't speak for most countries, but for Australia it's just wrong. No tipping is ever expected here in any circumstances.

      Yes, exactly the same in NZ, no tipping is ever expected here in any circumstances. That link is exactly the kind of rubbish we can do without. To quote directly from that page they admit directly "tipping has spread "because Americans forced it on people."". Please stop it, seriously! I had to laugh at the suggestion you would tip a taxi driver in NZ. I have yet to find another country with taxi fares as high as NZ. A ride from Auckland airport to the CBD is about 20minutes but will set you back an easy NZD $100 and they are suggesting you give them more! No wonder Uber is doing well here.

  9. Mod parent up by rsilvergun · · Score: 1

    my God, I've heard people I know (libertarian types) say exactly that about prostitutes. Not saying we should punish them but I would like to live in a world without it.

    --
    Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
    1. Re:Mod parent up by NotAPK · · Score: 1

      Nearly all prostitutes are victims of the environment they find themselves in: either straight up human trafficking, abusive "handlers"/pimps, debt, or drug dependency.

      By legalizing prostitution the women (and some men) involved are able to receive the entire support of the law, and the abusive nature of the trade can be reduced or eliminated.

      Even though a lot of jurisdictions with illegal prostitution attempt to prosecute the customer rather than the prostitute, this doesn't solve the underlying systemic issues that arise from making it illegal.

      Look into the total outcomes from countries with legal prostitution. In all cases everyone is a winner.

  10. Two services then... by BlueCoder · · Score: 1

    I'm don't want to pay tips on a regular basis. Tips are for when someone goes out of their way. I'm really tired of the standard 20 percent and having to keep change on hand as well as to add it to calculations in my head. Standard service and price it into the product. I see tips and jobs where people get tips as the bottom of the barrel. Those employees are always cheated.

  11. Resort Fees need to go by Joe_Dragon · · Score: 1

    It's a joke at some places like the las vegas strip where they are as high as $25-$32+tax a night.

  12. Re:What the hell is an "Instacart"? by Falos · · Score: 1

    >instacartr

    There we go!

  13. Re:T.I.P.S. by Hognoxious · · Score: 1

    To Ensure Proper Service

    Don't believe everything you read on google.

    One other thing: it spells teps, which is what South Africans clean paintbrushes with.

    --
    Confucius say, "Find worm in apple - bad. Find half a worm - worse."
  14. Re:There's so much wrong with the perception of ti by SecurityGuy · · Score: 1

    If you disagree with what the restaurants or in this case, delivery service, are doing by suggesting tips then don't use the service. By not tipping you are both supporting the business model you disagree with and telling the employee a big "F.U." by saying that you are ok that they are busting their ass to provide you with good service and that you are ok with them making poverty wages in order to do that.

    Yeah, I agree with this. I love the idea of grocery delivery and would absolutely use it...except for tipping. I hate tipping. It's as if just because I want to use a service, I have to ALSO sign up to decide how much the server should be paid today. "They were really friendly and helpful, so 25%? The drinks were slow, though, and one of the entrees was wrong, so 15%? Maybe 20%..." Ugh. No thanks. I'd much rather companies just paid people something reasonable, and if the service sucks I won't use them again. If the service is great, they'll have a customer for life and I'll happily pay them more than average service places.