
Half of Instacart’s drivers earn less than minimum wage, labor group claims - seancaptain
https://www.fastcompany.com/90337972/half-of-instacarts-drivers-earn-less-than-minimum-wage-labor-group-claims
======
sonnyblarney
I believe these services will fail if employment laws are ever strengthened,
or held up more rigorously.

The 'not so dirty secret' of the American economy is that it 'depends' (i.e.
in it's current form) on tons of cheating, illegal migrant labour, de-fact
sub-minimum wage, skimping on health benefits etc. etc..

It's 'sustainable' only to the extent that some workers, particularly
undocumented - are willing and able to take the crap for the opportunity for a
new life. Which is only _slightly_ fair (fair to the extent that were a
foreign workers regime legalized, conditions would be ballpark where they are
now, and it would legally be 'legit' and there'd be plenty of workers).

But in socialized countries, I just don't see it working, the numbers don't
add up.

I see these services working in NY/SF/LA and 'parts' of Chicago, maybe Ft.
Lauderdale, Boston i.e. wealthier areas - the rest - no way, at market wages.
London of course, maybe Paris. Though probably most of Asia.

I just don't see this as mathematically viable in Scandinavian countries, or
Canada, or most of the US.

The end-game will require more efficiency in delivery, for example like some
kind of better pickup arrangements for buildings, maybe ownership by the
grocery companies so there's fewer entities trying to take money from the pie,
possibly some kind of 'weekly delivery/sign up' for longer term engagement
etc..

~~~
hocuspocus
> maybe ownership by the grocery companies

Big retailers deliver groceries in many countries already. In some places it's
been the case for over 15 years! It's not rocket science really.

~~~
bobthepanda
The main reason this hasn’t become bigger in the US is because of the
sprawling, inefficient layout of most US residential areas; unless you are
doing major volume on the order of FedEx or UPS you are probably wasting tons
of miles getting to customers in isolated cul-de-sacs.

------
Cyclone_
All of these gig economy companies seem pretty fragile, they are all risky
investments. Most of them are only one court decision or legislation from
being put into a difficult position.

------
tyingq
Instacart was straight up stealing tips until they were caught:
[https://www.theverge.com/platform/amp/2019/2/6/18214335/inst...](https://www.theverge.com/platform/amp/2019/2/6/18214335/instacart-
reverse-controversial-pay-policy-tip-stealing)

I wouldn't listen to anything they have to say on the matter of pay. They have
zero credibility.

~~~
jchw
I quit using instacart and ended my subscription after this. It was seeming
like a promising alternative to using a car to shop, but I'll just continue
working on that in other ways.

~~~
slimsag
I was outraged when I found out about this and made this clear to their
support. They didn't even respond.

Switched to Prime Now and have never looked back:

\- Has an actual consistent service level, I've had some crazy Instacart
people here in Arizona.

\- The tip has a default value, pre-calculated based on your order.

\- No more orders where half of my items get cancelled as out of stock.

~~~
goostavos
Damn, I didn't know about the tipping schenanigans. However, it's weird how
different my Instacart experiences are from yours. In Seattle everyone has
been top notch, friendly, and like crazy helpful. I've been using it for, I
dunno, a year? And I still get free shipping + waived delivery fees when I
order. I have no idea how they make any money.

I've tried Prime in the past, but I'm not in the demographic they cater too.
Whole Foods isn't my scene, and while I'm not too cheap to have something
delivered, I am too cheap to pay $2.30 for an organic onion.

~~~
slimsag
Oh, that doesn't surprise me at all. Instacart is fine service-quality-wise in
SF/NYC/Seattle areas. It's just in any other major city in the US they seem to
suck quite badly..

Also Amazon cut the prices on everything at Whole Foods by like 50% a few
months after buying them. I completely agree their prices before (and still on
non-whole-foods brand items) are crazy.

Everything I get from Prime Now is roughly the same price as my local grocery
store, and I don't buy organic junk or anything.

------
ineedasername
I hate their tip-stealing practice but I wish there'd been more concrete
details of methodology for this. Car expenses are all tax deductable and yes
paying 15.3% off the top in SSE employment taxes is a hit but it seems like
these estimates may underestimate by a few dollars an hour. Not that that's
saying much of course, it's still low. I just like hard data in these
narrative-driven pieces.

------
denimnerd42
A minimum wage job is not that hard to get if you own a car so I'm curious how
long these people are working at less than minimum wage before they find
another opportunity. Maybe these people are only working a few hours a week to
make a few extra bucks?

~~~
tyingq
I think it's as simple as them not doing the math. Self employment taxes, gas,
vehicle wear, etc. They just see the check is bigger than what their prior
minimum wage job was. Probably true for Uber, Lyft, etc, also.

And, to be fair, it's more flexible, as you say. I suspect some drag their
kids along, or work for Instacart after their day job (or other obligations)
is done, etc.

~~~
yeahitslikethat
As are all the "sharing economy" scams out there. They all hide the costs in
the math and pass them on to their employees. Uber, airbnb, etc.

~~~
PopeDotNinja
They aren't scams. They are just opportunities of low compensation. A scam is
where someone is robbing you blind because they lie to you. A crappy "job"
doesn't have to be a scam to be crappy.

~~~
tyingq
Many of these "gig economy" companies have grossly misrepresented the earning
potential[1]. That bit is scammy. As is stealing tips, which Instacart was
caught doing.

[1] One example: [https://www.recode.net/2017/1/19/14330042/uber-20-million-
se...](https://www.recode.net/2017/1/19/14330042/uber-20-million-settlement-
ftc-driver-pay-false-advertising)

------
areoform
I would like to highlight and submit the paradox at the heart of the gig
economy. At one end, the gig economy relies on a critical mass of consumers
willing to pay for additional value on top in the form of convenience and
real-time demand networks, but at the same time the economic model also leads
to a race to the bottom as it assumes and necessitates that every request is
served with the least amount of friction possible (capital, labor or
otherwise). Which creates a problem, if the future of work is an expansion of
the economic trends behind the gig economy (cost reductions by passing the
buck onto the employees and highly dynamic workforces), then that logically
means the number of people who have the capability to afford it in the first
place also decreases as the buying power of the populace decreases.

We are trapped in a strange loop. The excess buying power of consumers that
has arisen from capitalism has also led the same system to incentivize
services and practices that are reducing the buying power of consumers.

Our old way of looking at things in isolated subsets will bring us to ruin. We
really should adopt a new perspective and a new way of doing things where we
view our economies as ecosystems or networks might clarify why these changes
are occurring (the gig economy is far from the only change that's happening).
For example, we can look at excessive economic inequality and understand why
it is bad by looking at natural ecosystems and how they are a closed loop.

For e.g. Consumers are like plankton. They are the injection of biomass
(money) into the system that ensures money changes hands when they buy goods
and services. A single entity, no matter how rich, cannot provide equivalent
mass to the greater ecosystem than a large set of consumers. Or, in other
words, a billionaire requires only so many pairs of sunglasses and Netflix
subscriptions. Ergo, a broad base of wealth where people can afford the
products around them is essential for a capitalistic ecosystem to function, as
these plankton keep feeding entities higher up in the food chain through an
accumulation effect.

For whatever reason, just like we have decimated our natural environment, we
have also decimated our economic ecosystem. The number of entities with high
purchasing power is rapidly decreasing, and this signals a significant problem
for the future of the ecosystem. And it also suggests how automation can end
up eating itself economically unless we institute measures - artificial or
otherwise - that inject capital back into the building blocks of the economy.

I suspect that as computing gets better, we will eventually create models that
will make the invisible transparent and make our debates about these topics
quaint to people of this future. Maybe what we need more than just lobbying
instacart is systems that allow us to see economies in real-time and simulate
outcomes of individual, highly variable, irrational agents at unprecedented
scales in order to give policymakers definitive answers about issues like
this, for we are governing blind and I am afraid of what the future holds for
us.

~~~
fabianhjr
> I suspect that as computing gets better, we will eventually create models
> that will make the invisible transparent and make our debates about these
> topics quaint to people of this future. Maybe what we need more than just
> lobbying instacart is systems that allow us to see economies in real-time
> and simulate outcomes of individual, highly variable, irrational agents at
> unprecedented scales in order to give policymakers definitive answers about
> issues like this, for we are governing blind and I am afraid of what the
> future holds for us.

We already have the compute power, just almost no interest in economic
modeling besides ERPs. There are great projects such as ValueFlows (
[http://valueflo.ws/](http://valueflo.ws/) ) and ValueNetworks (
[https://github.com/FreedomCoop/valuenetwork](https://github.com/FreedomCoop/valuenetwork)
) that are taking a stab at this area.

------
jimrhods23
If they regulate the gig economy, most of these people will be out of work.
The reason is that a company like Instacart will need to make sure that these
minimum wage employees are bringing enough value to the company, which means
less people being hired.

We need to ask the question, is it better to have more people making less
money or less people making more money?

If you interviewed them again, do you think they would rather get paid less
than minimum wage for a contract gig or nothing?

These are also contract gigs that allow a certain amount of flexibility that
you don't have with a regular job (no boss, work when you want, etc).

If you can't afford to pay your bills, you should get a different job (Minimum
wage jobs aren't hard to come by). This isn't going to be solved through
government regulation nor should it be the fault of the company offering work.

~~~
harimau777
An alternative would be the company taking money from their profits and using
it to pay people a living wage.

The argument against that I usually hear is that companies pay people based on
what "the market" says their labor is worth and the employees should just get
a better job if they don't like it.

However, my understanding is that such analysis is based on models which
assume that the people involved are rational actors. That creates a
contradiction: If the employees are not rational actors then the model's
assumptions are not valid. However, if they are rational actors, then the
argument that they should just get a better job isn't valid because a rational
actor would have already done so.

~~~
sokoloff
> if they are rational actors, then the argument that they should just get a
> better job isn't valid because a rational actor would have already done so.

If they are rational actors, why isn't the argument that their revealed
preferences say that they like it "enough" to accept the bargain offered them?
I tend towards the rational actor side of the debate and that they are
satisfied that the bargain offered is their best option, so they (rationally)
take it.

~~~
harimau777
I agree that it is likely the best option available to them. My issue is with
the argument that "if they don't like it they can get a different job" and
therefore it is morally justified for people to be payed a sub-living wage.

I'm not saying that the parent post is necessarily making that argument, just
that it seems like thats the usual justification for this sort of thing.

