Instacart Changes Scheduling and Removes Tips from Shoppers
Today, drivers in a few markets were sent emails about the change to the way shoppers schedule their hours and also removes the option for customers to tip the shoppers. In replacement of tips, Instacart has implemented a higher base delivery commission and changed the item commission. For some cities like Chicago, the item commission has been reduced while the base delivery fee goes up. Instacart claims that it will make shopper earnings more consistent from week to week. Also, they claim that the new scheduling scheme also increases flexibility for shoppers. I have seen this change in Houston, Chicago, Los Angeles, San Francisco and Seattle. I expect that the rest of the markets have already heard about it today or will hear about it soon.
[Update: as more and more shoppers are using the below spreadsheet and making the calculations themselves, they are seeing anywhere between a 10% to 40% drop in earnings going to the new system. Almost every shopper I talked to will be getting another decrease in earnings.]
Here are the changes that are starting October 16 (in the Seattle market, but may be the same for other markets):
- Shoppers will be able to pick up hours starting Wednesday morning of the previous week.
- To qualify for Early Access (Early Access shoppers can begin picking hours on Sunday (7 days prior), while all other shoppers can begin picking hours on Wednesday (4 days prior)), you will need to work 25 hours in the past three weekends or 90 hours in the past three weeks
- Peak Pay increases the base commission for both full service and delivery only orders. Higher fees on Sunday and Monday (see below for more pricing information)
- Instacart will no longer be collecting tips online. The increased base commission and changes to the item commission will replace tips. This mainly benefits delivery only orders that don’t tip. See below on more information about this
- Shoppers who are in the top 25% of five star customer ratings will get a $100 quality bonus each week. You must complete at least 20 deliveries per week to qualify.
In the past, you were assigned hours based on your availability and your shopping metrics. Now, as long as you pick hours Wednesday morning or qualify for early access, it eliminates the guesswork of being assigned hours, assuming open the app right when the schedule is available and slots are still available. For shoppers with lower metrics, this will generally be good for them while it will hurt full timers who have very good metrics and often get more hours.
Here is the part of the email I got about scheduling hours:
Over the past few months, we’ve spoken to many of you to understand what you love and what you’d like to see changed for shoppers on our platform. We hear from you that you value flexibility, timely pay, and independence. Through these conversations, we’ve also heard some common requests, including:
- More consistent hours on a week-over-week basis
- Greater visibility into weekly pay
- More consistent pay with fewer variables
- More pay for busy days
In response to your feedback, today we’re announcing some changes to give you more of what you want. The upcoming improvements include changes to:
Planning Your Week
- Choose Your Hours – Simply pick the hours you want to work, giving you more flexibility than ever. You will no longer set availability weekly and wait to see what hours you will be working.
- See Your Projected Earnings – We redesigned our app to help you understand what you’ll make before the week even starts. As you select more hours, you’ll see just how much you’ll earn. Need more cash? Select more hours!
- Higher Guaranteed Pay Per Delivery – We are moving to a higher per-delivery commission and no longer collecting tips. This way, we can remove inconsistencies caused by small or zero tip amounts.
- Peak Day Premiums – You can make more money by choosing hours on peak days.
Choose Your Hours
We’re excited to announce that starting Sunday October 16, 2016, we will be moving to a pick-up only system to provide you with even more flexibility. Simply choose the hours you want to work in the upcoming week from a set of published available times. No more need to set availability every week and wait for your schedule to be published.
How will this work?
Each week, you will be able to pick up hours for the following week starting on Wednesday at 9a local time. Some shoppers will qualify for “Early Access”, which will allow them to start picking up hours in advance.
- Early Access shoppers can begin picking hours on Sunday (7 days prior), while all other shoppers can begin picking hours on Wednesday (4 days prior).
- Once you have access, you can continue to pick up hours up to and including the current work day based on availability.
How do I get Early Access?
You can unlock Early Access if you have:
- Worked 90 total hours or more in the last three weeks or
- Worked 25 hours or more in the last three weekends
Note: To qualify for Early Access at Launch, please modify your hours starting today.
On the first week of pick-up hours, all shoppers will be able to pick up hours starting Wednesday October 19 at 9a local time.
If you qualify for Early Access at launch, you may begin picking up hours on Sunday October 16 at 9a local time.
Higher Base Commission Replaces Tips
The higher base commission and changes to item commission will offset the loss of tips, according to Instacart. However in Chicago, item commission is being reduced from $0.50 to $0.45 so they may be getting more of a pay decrease. Here is my take on it:
- Your earnings will be more consistent but may be lower (see below for my calculations and learn how to calculate it on your own)
- This new scheme will help if you don’t get a lot of tips or often do not get tipped
- This scheme helps mostly with DO (delivery only) batches, especially when it is only a few items and they don’t tip.
- From my calculations, I will be earning less with Costco orders since they are not getting a base pay increase and the item commission is being reduced.
See below for the new pricing scheme in Seattle (the values are similar in other markets):
My Calculation on New Pricing Scheme
I have went back and collected the last 40 deliveries I made. I put them into a spreadsheet and used the new pricing guide to calculate how much I would have made with the new pricing scheme. Here is the summary of it:
- My earnings would reduce by about 11%.
- 52% of my earnings are in tips
- I average $19.47 per delivery on the current system and would average $17.41 if the deliveries would be calculated based on the new pay scheme.
I made my spreadsheet public so you can use it to estimate your earnings with the new pricing scheme. You can use my public Google Spreadsheet to calculate what you would earn under the new pricing scheme based on the deliveries you have made:
- Instacart New Pricing Calculator Template
- Now, there are some numbers on column L that you would need to adjust for your market. So in L2, it is the base for Costco on the old pricing ($8 base for us), L4 is the new additional fee for Costco (in ours, it is +5).
- Item commission old and new is L6 and L8. L10 is the non-peak delivery commission.
- If you work Sun/Mon, you would need check L12-20. In my market, for Monday its +0.25 and +0.75 for Sunday (its the difference between non-peak and peak). All you need to do is change the dates on the left side since the formulas take it into account.
- Also, if you leave the item commission blank, it will think that it is delivery only and adjust the predicted prices in the new pricing scheme.
- For double orders, I usually split the item commission in equal parts since in terms of averages, it doesn’t really matter.
- M2 is your average earnings now (per order) and N2 is the predicted new earnings per order. O2 calculates what your average earnings in tips is and P2 calculates the earnings drop with the new scheme. If this number is negative, it means you would get an income increase.