Dear Instacart Shopper: You are Being Exploited

((you are not alone))

I was never naïve enough to think I could make $25/hour delivering groceries, but that didn’t stop me from applying for a job…I mean contracting my personal shopping and delivery services…with Instacart. Times are tough and those of us who have not been lucky…I mean entrepreneurial enough…to nail downfull-time work are obliged to take advantage of such opportunities, lest wegive off an air of being too good for more manual types of labor. And so it goes – we must all be quite grateful to the brilliant young techie minds that are creating the few job opportunities that even exist in this post-recession new normal.

Contracting my services with Instacart was quite easy*. I simply had to fill out an application, watch an hour or so worth of YouTube videos explaining how to shop, take the Instacart product recognition test, take an alcohol service course for the state of California, and sign a contract (all of these tasks were handled online). Once these tasks were completed, I was invited to an hour long meeting with several other Instacart newbies where we went over the technology and received a t-shirt, a credit card, and a stack of Instacart shopping bags. I scheduled myself for some shifts through the app, and I was off!

For the next three weeks, I spent about 30 hours a week shopping for groceries and delivering them to (usually) grateful customers, from Center City to Fishtown to Radnor, and everything in between. I knew I wasn’t making great money, but when that first $500 check landed in my checking account I was hopeful. Upon further consideration, maybe I shouldn’t have been – I was hired as an independent contractor, meaning that I would not be reimbursed for any gas or mileage, cell phone data, parking meters, parking tickets, insurance, or any other expense that might arise from working with them. Further, I was paid per batch and not per hour, putting me at the mercy of the algorithm and customer volume. If there were no assignments, I would sit idle and unpaid in the parking lot of Whole Foods or Acme.

This being my first time as a (legally) independent contractor, I kept meticulous records of my mileage, assignments, and shifts. Once I quit Instacart, I finally got up the nerve to look over the damage and it wasn’t pretty. Sure, there was one 3-hour shift where I averaged $22/hour with tips, but after accounting for mileage, that was knocked down to $16/hour with tips. Not bad, but still a far cry from $25/hour. The picture got much bleaker once I averaged it across all shifts and batches, accounting for the 700 miles I had driven to deliver those groceries. Including tips, I averaged just $11/hour. Even more disturbing, Instacart – by virtue of it getting $400 worth of necessary use out of my car** – only paid me an average of $6.55/hour.

I was angered, but not all that surprised. Instacart is often referred to as the “Uber of grocery shopping,” and that business model certainly is not based on paying workers…I mean, contractors…a just wage. And yet, the NY Times, Forbes, Business Insider, and every tech blog are singing the praises of Instacart and the “on-demand (or sharing) economy”, gushing over how it will bring together “people who have money but no time and people who have time but no money”. The model certainly is irresistible to investors, who have leveraged Instacart to the tune of $275 million as of January 2015, valuing the company at $2 billion.

All this money, yet most of us aren’t really sure where Instacart’s profits are expected to come from. If you look online for complaints against Instacart, most of them are from customers dissatisfied with the price mark-ups, missing items, or late deliveries. The on-demand economy is clearly all about the entrepreneurs, the technology, the investors, and the customers. There is next to nothing written about the labor conditions of the shoppers from their perspective, with Glassdoor being a notable exception. The only plausible explanations for silence from such a clearly exploited workforce is that they 1) cannot find more lucrative employment, 2) they are not aware of how much they are getting screwed, or 3) they are scared of Instacart’s lawyers.

My suggestion to Instacart shoppers is that they wake up and start doing the math. Being in denial about making sub-minimum wages is not helping you or your family, and it is not helping the economy. Learn what being a 1099 employee actually means, and don’t just look at this as a cash gig that the IRS will ignore. Because they won’t (and the contract you signed with Instacart indemnifies them of any responsibility should you choose not to pay your federal, state, local, social security, and Medicaid taxes. It’s ALL on you). I took home $1,400 in payout and tips for my 92 hours of work. Less the $400 in mileage, $40 worth of data***, $150 in parking tickets, and $350 I will have to pay back in taxes, I am left with a take-home wage of $460…just $5 an hour, less than I took home in 1994 working as a dishwasher at a diner (and I didn’t have to pay for rent or my own food back then!). I am 1000% certain that I could find any number of things to do for $5/hour. Have some self-respect and #QuitInstacart before your own exploitation adds up to thousands.

*Getting a job with Instacart is so easy in fact, that I suggest anyone reading this who doesn’t trust my numbers go directly to the Instacart website and apply for a job. I’m surprised that more journalists haven’t chosen to do this instead of only reporting on Instacart’s investors, how convenient the service is, or the litany of #firstworldproblems borne by unsatisfied customers.

**There are some people who might argue that the federal rate of $.56/mile is a tax boon for drivers who don’t get paid mileage. I drove hundreds of miles a week for my last job, so I am quite aware of the costs involved. I am $7000 underwater on my 2012 car because the mileage is so high, having lost more than 75% of its value from work driving (only about 5% of my mileage has ever been for personal use). Not to mention all the oil changes, having to replace the tires twice in the last three years, fixing the heater twice, and paying car insurance. Even if you have a fuel-efficient car, putting so many city miles on it takes a huge toll – my fuel efficiency went down by 1mpg in the three short weeks I worked for Instacart, If you drive a lot for work, I’m sure you already know that $.56/mile is not just “free money”, but reflects the real costs involved with owning and operating a car you drive for employment purposes. Instacart has completely externalized these costs onto you, my dear precarious worker who cannot afford it, even though vehicles are a necessary part of the service they advertise. Without your unpaid mileage and poorly paid labor, Instacart could not exist, let alone be valued at $2 billion.

***Yeah, I know they tell you that you “already have” a smart phone, that this is a way for you to make money using something you already pay for.  Consider that you are charged $.25/per order for the use of the Instacart app as a shopper and that you spend the majority of your shopping/driving time in that app or Google Maps to carry out the basic functions of your job. It is not incidental or an optional add-on to make your job easier. Instacart requires your smart phone in order to run their business. Now consider using the “already have it” logic with a different company, say Comcast. You call Comcast and say, “I already have a cable box, my apartment is wired for cable, and you already bring cable to all of my neighbors. So I’m just going to stop paying for cable since it won’t cost Comcast any money to just give it to me for free.” How do you think Comcast would respond? If a multi-billion dollar company would laugh at such a proposal, why the hell would YOU let a $2 billion dollar company do that to you, my downwardly mobile/student loan riddled/can’t find fulltime work/living with several roommates to-get-by friend? 

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