Instacart Thinks Shoppers Will Deliver Groceries for 40 Cents
Over the last 9 months, Instacart has been steadily decreasing rates all over the country. Instacart calls it “dynamic pay” where it can change from day to day and week to week. They adjust pay based on demand and they claim that this helps give us the most pay. However, they have been decreasing rates the entire year. Take a look at the rates in Seattle back in January and this month:
| Jan 6th, 2017 | Jan 14th, 2017 | September 4th, 2017 | September 11th, 2017 | |||||
| Full Service | Delivery Only | Full Service | Delivery Only | Full Service | Delivery Only | Full Service | Delivery Only | |
| Sunday | 8.8 | 5.55 | 7.65 | 6.5 | ||||
| Monday | 8.65 | 5.55 | 7.7 | 5.2 | 8.25 | 6 | ||
| Tuesday | 8.35 | 6.5 | 7.4 | 6.15 | 8 | 5.75 | ||
| Wednesday | 9.25 | 6.1 | 8.3 | 5.75 | 5.6 | 3.8 | 7.75 | 5.5 |
| Thursday | 9.05 | 5.65 | 8.1 | 5.3 | 5.35 | 3.7 | 7.75 | 5.5 |
| Friday | 9.85 | 6.25 | 8.9 | 5.9 | 6.35 | 4.4 | 7.75 | 5.5 |
| Saturday | 9.75 | 5.65 | 8.4 | 5.5 | 5.8 | 3.95 | 8 | 5.75 |
The January rates are a bit lower than what was originally announced back in October, but you can see how it slides from $9 to $5 in the matter of nine months. Every time I open the application, there are a ton of open hours every day of the week. Meanwhile, shifts on Amazon Flex go within seconds. The main reason is because Amazon pays so much better than Instacart and its a lot less work. Pick up the package and deliver it on time. It’s really just that simple, but there are many people who get it wrong. Instacart is much more complicated and there are so many things that can go wrong that delays your order. There is also a growing dependency on tips since the pay rate on Instacart became so low over time.
Is Instacart Really Paying Shoppers 40 Cents to Deliver Groceries?
Below are the pictures of the original post service-fee pay back in October of last year, along with the actual pay levels last week and this week in Boulder, CO:
There is no error in this picture nor was it photoshopped. It is really just 40 cents to deliver groceries tomorrow in Boulder, CO. If you think this was an isolated incident, the delivery pay rate last week was just $0.65 per order. The fact that Instacart sets such a low price shows a lot about how Instacart feels about its shoppers. There is no way Instacart can justify setting the pay rate for delivery only orders so low. [Update: shoppers are saying that the delivery only rates are 40 cents for Wednesday-Friday this week. So yes, Instacart believes shoppers will deliver groceries for 40 cents.]
For those who are not familiar with Instacart, delivery only orders are like UberPool or Lyft Line. You can get multiple orders at once, but there is a limit on how many you can do in an hour. Typically, it takes about 10 minutes to go into the supermarket, find your order(s), scan all the bags and load them into your car. If you have 4 large delivery only orders in your batch, you may need to make two trips to the car and can take up to 20 minutes to put it all in your car. The fastest I have ever delivered 4 orders was an hour and they were all small orders very close to each other. At 40 cents an order, I just earned $2.40 cents for the entire hour. If I’m lucky, I may get a $10 tip, which brings my pay to just $12 an hour. One $10 tip between four orders is fairly common for delivery only but what if no one tips? That is just $2.40 for an hour of work. I typically get tipped for a full service order, not very common for delivery only orders.
In addition, there is no minimum hourly rate given to shoppers. What we get from Instacart in the form of order pay and tips are all we get. New shoppers get a minimum hourly rate for the first 20-40 hours but that is it. New Instacart markets also get minimum hourly guarantees for the first few months but that goes away once there is enough demand. Boulder, CO is not a new market so none of the shoppers have any type of guarantee.
Can Instacart Go Any Lower?
Take a look at the below screenshot:
Fortunately, this is a viewing error in the shopper application that just hasn’t been fixed for 5 days. Instacart admits that it is an error in the application. Tuesday (9/19) shows delivery only rate at $1.25 while Thursday and Friday next week (9/21, 9/22) is listed at $1.00 per delivery only. Some shoppers think that it will be around $1.00 on Wednesday (9/20). It is a small increase from this week where it is just 40 cents.
[Update: Instacart finally fixes the technical issue and now the delivery only rate is now correct for September 20th]
Now that they have confirmed it will be $1, I am not sure how many shoppers will be delivering groceries for just a dollar per order. Some brave Instacart shoppers are signed up to shop that day so they’ll find out how the new pricing will change their earnings.
Instacart Technical Issues Again
This small glitch in the app is just one of many IT related issues with Instacart. A few months ago, the Instacart service would go down for hours at a time, preventing shoppers from shopping and delivering orders. It was occurring weekly over the course of a month, which caused a lot of problems for both shoppers and customers. You can read more about these issues in my previous post:
Instacart Technical Instability Threatens Its Future
The -$0.10 rate was noticed by shoppers late last week and as of this morning, it still hasn’t changed. It is still displaying as -$0.10 as the pay rate for a delivery only order. Out of all the sharing economy companies I have worked for, Instacart’s service is by far the worst. Amazon Flex had its issues with the application, but it was always temporary and it could be fixed with a simple reboot. However, most of Instacart’s technical instability lies with its servers in addition to the many bugs in the shopper application.
Are Shoppers Forced to Delivery Groceries for 40 Cents?
Instacart no longer forces its shoppers to accept every order. Earlier this year, if a shopper did not accept an order, they would be immediately kicked off their shift and given a reliability incident. If you have 5 or more, you will have your account suspended until it is reviewed. There were many shoppers who were either deactivated or had to send many emails to get exceptions to one or more reliability incidents so they can continue working. Shoppers were forced to accept every order.
A few months ago, Instacart changed their policy in that shoppers can ignore orders when they are online. Shoppers will no longer get reliability incidents by ignoring orders if they click the button “Return to Shop.” Below is the list of reasons why shoppers will get a reliability incident:
- If a shopper no-shows for their hours,
- If a shopper cancels or edits their hours within 6 hours of their start time,
- If a shopper does not return to shop after not acknowledging a batch
However, Instacart may send you the same order over and over again until you accept it since there is no one close by to fulfill that order. In addition, it may be the only order you will get for the next hour or two, so sometimes it may be best to take it than to not make money at all. I believe that Instacart in some ways believe that this is the only order you will get, so they know that shoppers will eventually accept it, no matter how little it pays. However, this has negative consequences on shopper retention and over time, they will have trouble getting enough shoppers working for them, which will force them to raise rates.
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