After Facing Class-Action Lawsuit, Instacart CEO Says It's Taking Steps To Ensure Tips Are Counted Separately From Wages (www.cbc.ca) 54
An anonymous reader quotes a report from TechCrunch: On the heels of a recently-filed class action lawsuit over wages and tips, as well as drivers and shoppers speaking out about Instacart's alleged practices of subsidizing wages with tips, Instacart is taking steps to ensure tips are counted separately from what Instacart pays shoppers. In a blog post today, Instacart CEO Apoorva Mehta said all shoppers will now have a guaranteed higher base compensation, paid by Instacart. Depending on the region, Instacart says it will pay shoppers between $7 to $10 at a minimum for full-service orders (shopping, picking and delivering) and $5 at a minimum for delivery-only tasks. The company will also stop including tips in its base pay for shoppers.
"After launching our new earnings structure this past October, we noticed that there were small batches where shoppers weren't earning enough for their time," Mehta wrote. "To help with this, we instituted a $10 floor on earnings, inclusive of tips, for all batches. This meant that when Instacart's payment and the customer tip at checkout was below $10, Instacart supplemented the difference. While our intention was to increase the guaranteed payment for small orders, we understand that the inclusion of tips as a part of this guarantee was misguided. We apologize for taking this approach." For the shoppers who were subject that approach, Instacart says it will retroactively pay people whose tips were included in payment minimums. Previously, Instacart guaranteed its workers at least $10 per job, but workers said Instacart offsets wages with tips from customers. The suit alleges Instacart "intentionally and maliciously misappropriated gratuities in order to pay plaintiff's wages even though Instacart maintained that 100 percent of customer tips went directly to shoppers. Based on this representation, Instacart knew customers would believe their tips were being given to shoppers in addition to wages, not to supplement wages entirely."
"After launching our new earnings structure this past October, we noticed that there were small batches where shoppers weren't earning enough for their time," Mehta wrote. "To help with this, we instituted a $10 floor on earnings, inclusive of tips, for all batches. This meant that when Instacart's payment and the customer tip at checkout was below $10, Instacart supplemented the difference. While our intention was to increase the guaranteed payment for small orders, we understand that the inclusion of tips as a part of this guarantee was misguided. We apologize for taking this approach." For the shoppers who were subject that approach, Instacart says it will retroactively pay people whose tips were included in payment minimums. Previously, Instacart guaranteed its workers at least $10 per job, but workers said Instacart offsets wages with tips from customers. The suit alleges Instacart "intentionally and maliciously misappropriated gratuities in order to pay plaintiff's wages even though Instacart maintained that 100 percent of customer tips went directly to shoppers. Based on this representation, Instacart knew customers would believe their tips were being given to shoppers in addition to wages, not to supplement wages entirely."
wacky terminology (Score:4, Informative)
WTF is a "shopper" in this context? Normally that's a customer but they seem to be using it to mean employee...
Shop and deliver gig economy? (Score:1)
That is what this company sounds like.
Think of it as Uber for your groceries.
Re:wacky terminology (Score:5, Informative)
WTF is a "shopper" in this context?
You use InstaCart to hire a shopper to shop on your behalf.
Just like you use Uber to hire a driver to drive on your behalf.
You are the customer. The shopper/driver is a worker, and may or may not be an employee depending on jurisdiction.
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Yes but tips are on top of your normal wage, minimum (or sub-minimum in the case of restaurant workers) or otherwise.
From tfa it appears (for whatever reason) corporate decided to put a $10 floor on per-instance earnings, and would make up the difference. But they were calculating $10 vs. wage + tip, and now just vs. wage.
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"Restaurants pay waitstaff $2.13/hour." No, they don't. They steal their tips and justify that theft and fraud as the reason they can underpay their workers on their wages, which is a separate legal contract. Illegal and unenforceable.
Which is why the class actions work, and why the CEO of this company says he'll avoid them by separating the two. You fucking illiterate toady cocksucker.
You only THINK it's simple BECAUSE YOU HAVE NO UNDERSTANDING OF LAW, the subject being discussed.
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Of course it varies from jurisdiction to jurisdiction, but in general tips ARE on top of a minimum wage, even if that minimum wage for tipped workers is less than the general minimum wage.
by doing that it became both sales and wages.. (Score:2)
they become wages, with all taxes that entails.and paying that sum becomes sales, with sales tax and all.
look, the whole tipping "culture" in usa is just a giant tax dodge, nothing more. that's why restaurants and waiters and all want to keep it. that's why it's then "mandatory" to tip. so it's actually not a tip, it's a strongly suggested mafia charge, not something you just give as a tip for good service but something that you need to pay.
by getting of the middlemen they skip paying sales tax on the money
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The thing is, that's the system for waiters. Customers don't necessarily know it is being applied to non-waiters as well.
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Sure, that's why they're not being criminally prosecuted, but it doesn't change the customer PERCEPTION and EXPECTATION.
Re:Isn't that what tips are? (Score:4, Interesting)
In some really backwards places, sure.
In my State, that would be felony wage theft.
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I took the DOL list and added up the populations; those 7 states make up 19.3% of the US population.
Apparently, on the West Coast waiters are respected as regular workers, and on the East Coast they're treated as some sort of servant class. And the red states in between they'd rather pay even less, but are stuck with the Federal minimum.
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If the employer has to bring the server's wage to a minimum of $7.25 anyways, then what is the point of specifying $2.13 as their minimum hourly wage? Their wage is always going to be the greater of either $7.25 per hour or their tips. The $2.13 minimum doesn't factor into it at all.
It's identical to being paid on pure commission, with an hourly wage minimum bump on days when you don't make enough sales.
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Waiter 1 sucks at gets 0 tips, he makes 7.25 an hour.
Waiter 2 is ok but business is slow today getting 3$ in tips an hour, he makes 7.25 an hour.
Waiter 3 is amazing and gets 20$ in tips an hour, he makes 2.13+20=22.13 an hour.
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Waiter 4, well they get tipped $100,000 per job and are a multimillionaire a week later, yep, uh huh, tips are not calculated income, this is a straight up scam. So start from home, drive to store, pick groceries, drive to client, drop off groceries and drive home, all for ten dollars. Who pays for the car, apparently no one, how many deliveries can you manage, how many are there available.
I would only order from a store that used full time workers employed by the store, with packed delivery vans, one off j
what about the full min wage + full IRS mileage (Score:2)
what about the full min wage + full IRS mileage??
Do they still have scheduled shifts and want workers to wait in parking lot in case an order comes in?
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what about the full min wage + full IRS mileage??
Most jurisdictions these workers are not employees of Instacart, they are independent contractors accepting an assignment. It is the contractors responsibility to ensure that their employee's are paid according to regulations.
Do they still have scheduled shifts and want workers to wait in parking lot in case an order comes in?
I've never used instacart, but how it's been described, it is like Uber. You request a shopper/pickup, if there is one in the are they are able to accept the assignment.
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what about the full min wage + full IRS mileage??
Most jurisdictions these workers are not employees of Instacart, they are independent contractors accepting an assignment. It is the contractors responsibility to ensure that their employee's are paid according to regulations.
Do they still have scheduled shifts and want workers to wait in parking lot in case an order comes in?
I've never used instacart, but how it's been described, it is like Uber. You request a shopper/pickup, if there is one in the are they are able to accept the assignment.
E-gig "wages" fluctuate based on market demands (Score:1)
No shit. People are just dumb. The company paid wages based on market demands which is exactly how gigs like this work and then the company did the logical thing it sounds like to insure that they were always within the law. The tips were in fact handed to the "shoppers" as stated, but the "wages" in some instances were less than desired because there was less market demand or an oversupply of "shoppers" at certain points. It's called a free market people. It's a good thing. It creates lower prices for good
Fuck Instacart (Score:2)
When does YC get held accountable? (Score:2)
This is a YC-backed company, so they are associated with this fraud. They had to know of this before okaying and backing it and profiting off of it for 6-7 years so far. Paul Graham should be considered complicit in this and taken into a courtroom.
Stop tipping (Score:2)