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Instacart paying 80 cents an hour because worker received a large tip (workingwa.org)
1320 points by timebomb0 17 days ago | hide | past | web | favorite | 675 comments



There's a related blog post up on Medium by this same group (Working Washington) where they placed the same order, once with tip and once without, so people could directly compare.

From my perspective Instacart is stealing from its customers and workers by doing this. I'm a huge fan of instacart (my fiance and I use it regularly), but this is definitely going to push me away from the platform. At a minimum I'm going to be tipping in cash.

https://medium.com/@workingwa/instacart-heres-our-22-cents-n...


> From my perspective Instacart is stealing from its customers and workers by doing this.

This is 100% wage theft.


And while it is not as important an issue, I, as a tipper, feel that I have been defrauded when this happens (now that I am aware that this does happen, I assume that it has probably been done with some tips I have made.) To be clear: this is not an alternative way of looking at the issue, it is an additional indictment stemming from the practice.


> I, as a tipper, feel that I have been defrauded when this happens

It is standard (though not universal) practice for restaurant staff to pool and divide tips, which would appear to be the same thing from a defrauding-the-tipper perspective.

I'm more upset about this line from Instacart:

> We include tips in the calculation [of pay for deliveries] so that you can get a more accurate picture of what your earnings will be after completing a batch.

This is incredibly dishonest. They're arguing with a straight face that they're doing you a favor by smoothing your earnings from an unpredictable (for example) $8-$50 per hour down to a more reliable $8-$9 per hour.

This is actually the same argument the US government advances in favor of its sugar tariff. Sure, it raises the price of sugar by 200% on average, but it protects us from the awful unpredictability of the world sugar price.


Tip pooling/sharing is different in a few significant ways, though.

First, restaurant staff always know ahead of time if they have to share tips.

And their hourly compensation, as ridiculously low as it may be, is never adjusted to compensate for higher than normal tips.

And, finally, in most restaurants the tip pool is also split up with bussers, bartenders, and hosts who don't always make tips of their own, but still contribute to the overall experience.


At my first waiting job, we didn't report our full tips because if our income including tips surpassed $8, our salary would be reduced. With the "benefit" that if we made less than minimum wage, we would be compensated. However base pay was $2.50/hour + tips, so do the math.

Yet somehow the system only ever seems to work in one direction. I once had to pay $20 after working an 8-hour shift before leaving home under threat of termination (right-to-work state) because of the two tables I had that night, one was a giant party that didn't tip me at all and the other ran out on his $20 meal while I was taking care of other duties in the back. Somehow my responsibility, of course.


  Somehow my responsibility
Right-to-work state or not, I know if no state in which that $20 clawback (as you describe it) was legal.


I have no doubt it was considerably illegal, however I would have been terminated immediately in a town where finding another job without a vehicle or parents would have been impossible, and since I was living on my own as a minor at this time it was pretty important that I maintained income.

After several more undoubtedly illegal maneuvers by a new manager to fire me and other waitstaff so that he could replace them with random girls he wanted to work for him so he could hit on them, being taken off payroll without clearing it with the senior manager, and afterwards being reduced to a single day a week on the slowest days, I quit.

I then had to leave the place I was living at two months later to a brand new city, contracted mononucleosis, and, not having any saved up money after quitting this job and unable to work due to being bedridden for 4-5 months, basically starved myself into extreme malnutrition other than the food I could steal and scavenge, surfing from couch to couch. So, essentially my worst fears about quitting my job over illegal practices were realized.

I could also tell you stories from other jobs about bosses pulling firearms on me, commanding me to do straight up illegal things like lie to the police, illegally withholding paychecks for entire staff for months at a time, illegal unpaid overtime, slashing wages between paychecks, working me into extreme injury from RSI and then subverting my ability to collect comp, firing me over "clerical errors" for trying to cancel a shift I didn't even mean to sign up for on a stupid new workforce app after my boss explicitly lying about my employment not being in jeopardy, etc, and all of the hardships I had to endure for leaving each of these jobs at my breaking point.


You all are being duped into contrived outrage. The example given in the OP link is very misleading and it is quite obviously cherry picking (to spark emotion) and is actually an outright lie. The truth is that Insticart actually pays a $10 minimum per delivery (this isn't even mentioned in the OP link) So how did this person make 80 cents an hour? The delivery was 0.7 miles and took 69 minutes. Ironically, under Insticart's previous policy, this delivery person would have made essentially the same amount. People making deliveries in dense urban areas (especially during traffic hours) can actually make far more than they used to.

I am not sure why delivering 6 bags of groceries took over an hour in this case. It is entirely possible however that they made several other deliveries in between Wegmans and this location (making a $10 minimum for each). It is possible that this person actually made $50+ during this 69 minutes.

Source for more details of new policy: https://www.miamiherald.com/site-services/new-newsletters/bu...

So is not a typical scenario. I could put together an article just as misleading showing that Insticart pays a mint...

I don't like when people try to mislead me. Perhaps the fact that the tip is not going directly to the delivery person is offending some of your sensibilities. This is quite legal. Many states have done this for the past 80 years. I don't know how residents of states that practice this are surprised. All restaurants and other service industry locations you frequent do the same.

Being a food delivery person, a restaurant server or for that matter a McDonald's employee is not a skilled labor position and has never been a job someone should aspire to feed a family off of. We have people busting their butts, putting themselves through college, working their way up the ladder. We have 50k skilled labor jobs vacant in this country that pay a good wage and even offer training. People used to move across the country for these jobs. They used to leave their grandma's basement and go make something of themselves. Now we just have them making a bunch of noise over McDonald's not paying a Living Wage. Grow up. This world should not reward the lazy, it results in ever increasing mediocrity.

https://www.npr.org/sections/ed/2018/04/25/605092520/high-pa...

https://www.forbes.com/sites/kathycaprino/2018/08/30/dirties...

https://www.cnbc.com/2018/07/05/the-us-labor-shortage-is-rea...

https://www.google.com/search?q=the+us+has+vacant+skilled+la...


What the hell does that have to do with my comment and my own experiences?

I worked these jobs while trying to support and educate myself so that I could get a better-paying job.

At the same time, if 6-8 hours a day of Instacart deliveries isn't enough to provide you with an apartment, tuition money and food & entertainment for a wife and two children, then it's a service that shouldn't exist and it is only propped up by investor cash.

Because that is what minimum wage was originally meant to provide for an individual in America, before nearly a century of propaganda and misdirection convinced people like you that someone on minimum wage is lazy and doesn't deserve enough money to eat healthily, rent a decent apartment and have enough cash for some entertainment, and generally live better than someone in a third-world country, much less afford something like an annual vacation or car payments.


>"I worked these jobs while trying to support and educate myself so that I could get a better-paying job."

So did many of us. People are not supposed to have to support a family as a primary earner on minimum wage and they never were. According to the 2013 Bureau of Labor Statistics, full time minimum wage earners earn over the poverty line by more than $3,000 per year. Two minimum wage earners can support a family of four and live above the poverty line. Avoiding poverty is all about choices.

>"At the same time, if 6-8 hours a day of Instacart deliveries isn't enough to provide you with an apartment, tuition money and food & entertainment for a wife and two children, then it's a service that shouldn't exist and it is only propped up by investor cash."

>"Because that is what minimum wage was originally meant to provide for an individual in America, before nearly a century of propaganda and misdirection convinced people like you that someone on minimum wage is lazy and doesn't deserve enough money to eat healthily, rent a decent apartment and have enough cash for some entertainment, and generally live better than someone in a third-world country, much less afford something like an annual vacation or car payments."

You have your facts quite wrong about the minimum wage and what it was originally meant to provide. The minimum wage was first enacted in 1938 by FDR. It paid a meager 25 cents per hour (this is $4 today when adjusted for inflation). So it has become substantially more generous as time has gone on. This is the opposite of your claim.

People in third-world countries earn less than a dollar a day. I'm sure they would love to earn even the 25 cents per hour that the original minimum wage paid.

Everyone I know that has been stuck in minimum wage jobs have definitely been lazy or made very poor choices (like stealing from their employer ETC.) in fact, only 3% of people above age 25 in the US make only the minimum wage.

Get the actual facts before making biased and factually incorrect claims (and cite sources when doing so). It really hurts your credibility to just make things up and try to sound like an expert so maybe no one will call you on it and you will appear to make a valid point.

Source: https://bebusinessed.com/history/history-of-minimum-wage/


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Attacking another user like this is a bannable offence on HN. Please review https://news.ycombinator.com/newsguidelines.html and follow the rules when posting here.


If the facts that I stated are incorrect, cite your sources. If you wish to debate something I said... I welcome it.

You place yourself in a weak position philosophically and argumentatively simply going for the old dumb bully method of personal attacks, character assassination, shouting someone down, insults ETC.

Is that really the best you can do? I pointed out inaccurate information and information gaps in this story. This claim reeks heavily and obviously of major bias. I wouldn't be surprised in an Instacart competitor actually is behind this. It's sad that others in this thread didn't already do the same. The group think and blind social justice here is really sad. There are many people here far smarter than I, yet they cannot see when such a weak and slanderous smear attempt is made?

If you want to change the labor laws to make tips and wage separate then go ahead. But just know that every restaurant and service company in states that allow this do it. If a certain business doesn't, they will have a hard time competing against the company across the street who does.

This 80 cents an hour case is so factually incorrect and lacking specifics that you and others should frankly be embarrassed to be making judgments based on it.


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Considering they couldn't even spell Instacart right, I dunno...


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I've never shared a story on the internet about a hardship I've endured, large or small, without an apologist coming somewhere out of the woodwork to make assumptions that the only way I could have such shitty luck with people is by making a whole lot of bad choices. Apologists who have never met me, know nothing of my personality or socioeconomic background, what my childhood was like, nothing. Just strict, close-minded judgement based on preconceived notions. Congratulations, you're a statistic.

> If you were a minor, you would have been a ward of the state. They would have paid to take care of you. You wouldn't even have to work.

My experience with the State is that foster care where I grew up is the last place you want to be if you at all want a decent shot at a good future. We could talk about criminal indoctrination, institutionalization, lack of resources, lack of boundaries, lack of personal space and belongings, I mean really there are so many reasons why being a ward of the state fucking sucks.

> You could live, go to school, and get all your needs met for free.

In highschool, my mother didn't have a job. We were homeless at times. My sister tried very hard to stay in school but dropped out. My brother had the luxury of living with some extremely abusive relatives who fucked him up in the head and he dropped out as well. I took matters into my own hand and first worked hard to get accepted in a boarding school, and later when that didn't work out found a place to live, found a way to get to a job, and finished out high school. Getting an education was really important to me, and I did it despite an abusive, impovershed and malnourished childhood, despite my parents not being in my life or keeping jobs to help support me, despite a lot of things. And somehow you're finding a way to condemn me for it? How incredibly close-minded and judgemental of you.

> The life of a guy I grew up friends with reminds me of you and what you went through. He never listened to good advice and always ended up in bad situations.

Yes, GreenToad5, because we go way back as you know, and you know all about me. You know people that remind you of me, and you know that I never listen to good advice and always end up in bad situations. Just like your other friend, whom I'm not entirely inclined to believe you have made an accurate assessment of. Please, tell me all about my life and the mistakes you've seen me make. Pigeon-hole me some more with the handful of lazy shits you know.

> It is clear just by your demeanor and manipulation of facts that you have some challenges brought on by yourself.

This is literally delusional thinking. Nothing is clear based on what I wrote. I wrote two very vague and summarized posts about large portions of my life. You don't a single thing about any of the events I described except that they happened. It's insane to think you could derive anything else from that, even if you had a PhD in Psychology, which you obviously don't.

> If you are a minor, the state will take care of you. If you are broke and not a minor, pass a GED, then get financial aid for a Junior College or Trade School.

Again, I decided to get a job and work through highschool while homeless and parentless. And I passed high school with nearly a 4.0GPA and got a scholarship to every college I bothered applying to, with several full rides and paid-for state tuition. On track to actually do what I want to do, not settle for some stupid bargain job through a trade school, spending the rest of my working life doing something I don't like. As life would have it, a vindictive teacher illegally modified my final grade and refused to apply mandatory points that would still have passed me despite her modifications, and I failed a core class and had to forfeit all of my scholarships. Believe me, I was at the schoolboard, I was in the principal and guidance counselor's offices, I did not let it go--- and I was promised it would be fixed. And it never was.

Somehow you'll tell yourself that I must be lying, the system is perfect, it could never fail someone so badly and that teacher would surely have lost her job. Well, that's what I thought too when I put so much time into doing well in school.

So I didn't get to go to college unless I got massively in debt with the State. Instead of taking out loans like my peers, I continued to educate and support myself until present day where I am now happily employed as a software engineer with an actual sane boss. While my peers are still wrestling with student debt and working low-salary jobs despite parental financial aid. I bet somehow that's the wrong decision, too.

I have done so well for myself in spite of adversity, and honestly I'm very proud of myself for even being alive today, much less happily employed in the field I wanted. But the worst part about all I've gone through is that I feel afraid to share my experiences with others because I know that even without the loudmouth jerks such as yourself, many people will simply silently disbelieve me. It really sucks having to defend the same stories over and over and over again until finally you give up ever offering any explanation for the way things are.

> Making laws based on emotions and feelings have got us nowhere in the last 80 years

Emotions have nothing to do with this. I was sharing some of my experiences with the hope that they would add value to the conversation.

> Look at all the government programs and affirmative action that have been made for African Americans over the last 80 years... Yet their poverty levels remain exactly the same. Why?

Oh. Wow. Ok, I get it now. You're one of those. One of those people who can't understand socioeconomic oppression when it's staring you right at the face. One person sees that the black community is still impoverished 60 years after the Civil Rights movement and places blame on the government for not doing enough to reverse hundreds of years of institutional racial oppression. You see the same thing and decide to blame the poor person for still being poor.

> We have created a culture of public assistance dependence and generations of "victims" with all the welfare.

Classic diversion argument. We spend over 50% of the federal budget on our war machine each year, more than the next 13 countries combined, we lose billions to tax havens and loopholes and lobbyist tactics, and you want to talk about the underfunded garbage that is our excuse for State welfare.

It's so incredible that on one hand you chastise me for working my way through school, telling me I should have freeloaded off the state and not worked at all, and then on the other hand you piss all over state welfare and its recipients. The level of mental gymnastics required for such cognitive dissonance is just incredible. You're a serious intellectual titan.

I don't want to change your mind. I'm not going to be able to. I know that. I'm not interested in speaking with extremely close-minded people, especially when they're just plain frustrating to talk to. Go ahead and make your long-winded judgemental reply, but don't expect one in return.

https://www.nationalpriorities.org/campaigns/military-spendi...


This is really common in restaurants. Legal or not, it happens ALL the time. I've not only seen in in restaurants I've experienced it as a waiter as well.


> And their hourly compensation, as ridiculously low as it may be, is never adjusted to compensate for higher than normal tips.

This varies by state. Google "server wage" and your blood will boil. It's illegal in WA, though — servers make standard minimum wage and employers can't take servers' tips.


It’s somewhat bullshit that the people who did all the work making the tasty meal get nothing, while the person handing it to you gets 20 percent. Especially when Seattle minimum wage is $15/hour and tips cannot count as part of that.


Tip sharing as a concept is well extended.

Having seen the wrong people get rewarded bonuses, RSUs and raises all the time. You are just better off with a salary band/pay grade and give money uniformly across the band.

Ideally 'top performers' are supposed to be rewarded for 'top performance'. But in any subjective evaluation you are just dealing with cooked up documentation to prove a person did something, therefore deserves extra. Pretty much any and anyone's story can be twisted and narrated in a way that could sound positive or negative, to reward or punish respectively.

You are better off with a tip pool and paying it across the band.


I've also wondered about it (though I know that bring a server is still by no means an easy task). I think Freakonomics had an episode on topping and reported (advertised?) some restaurants that split the tip between servers and cooks, or just don't let the customer tip but pay their employees more, upfront.


Yes, tips are bullshit


Tips are a holdover from the days of slavery. That's why it's so terrible.

https://www.fordfoundation.org/ideas/equals-change-blog/post...


Farming is a holdover from the days of slavery too. Almost everything is.


Yes, minimum wage for servers is lower than for people who don't get tips. But it's still illegal to lower a person's wage below what was advertised because the person got a tip.


I think you're confused.

You're describing "server wage" laws, in which employers are free to steal tips up to the difference between real minimum wage and server wage per hour. In effect, servers in these states make above minimum wage during peak times and at most minimum wage off-peak. But they have to work off-peak or they don't get scheduled for peak hours.

In WA, this form of wage theft is illegal. Your statement, "minimum wage for servers is lower than for untipped workers" is false in Washington state, which is where the wage theft in TFA took place.


I don't see how my previous comment was confused. It was drawing a distinction between "server wage" and what Instacart is doing.

I never claimed "server wage" laws apply to this situation.

Also, the term "wage theft" seems like it doesn't apply to "server wage", because "server wage" is a construct specifically created by the law, whereas wage theft is something that's illegal.


If the restaurant pays you less due to the expectation of significant tipping, then I do have a bit hard time too see why the practice of Instacart and restaurants differ that much. I guess you need to be American to understand this tipping logic.


Instacart is dynamically adjusting down wages in response to tips; restaurants have a fixed wage, with a legislated minimum — even if it accounts for average tips.

The difference is that one allows the customer to dynamically adjust the wages in response to service; while in the other the company is pocketing that variance themselves, rather than passing it on to workers.

It’s simply fraud to pretend one situation is the other — there’s a distinct and meaningful difference in who pockets tip variance.


I agree that the first two points are significant, but I don't think they're particularly relevant to the viewpoint "as a tipper, I feel I'm being defrauded when this happens".

The third point is also correct, but in that case I think it supports the idea that the tipper is being defrauded when it happens.


I feel like you maybe need to write a book about why you think a server sharing their tips around is equivalent to a corporation reducing wages based on tips.

I don't see how any shorter treatment would be a sufficient explanation.

I mean, imagine the scenario where the server just buys a line cook a drink to say thank you. Fraud!


> I mean, imagine the scenario where the server just buys a line cook a drink to say thank you. Fraud!

That would be a case of the server getting the money and deciding to buy something for the cook.

Whereas in an actual tip-sharing restaurant, the server gets his share of the tip pool after the cook's share has already been taken out. He doesn't get a choice in the matter.

This is generally not what the people giving the tips have in mind.


The point being made that you're repeatedly ignoring is that that in this scenario the staff gets the tips. Only the staff. In no point in time, whether it's individual tips or tips sharing, does the restaurant receive any part of the tips pool.


From the tipper's perspective, what would the difference be between the restaurant garnishing the waiter's tips vs the restaurant garnishing the waiter's tips and then giving some to the cook?


>This is generally not what the people giving the tips have in mind.

Can you substantiate that in any way with any kind of evidence or is it a baseless claim?


I'm just one data point, but I imagine I'm not alone:

If I tip someone well, it's because they've been incredibly attentive, kind, accommodating, etc. As much as possible, I want the tip to brighten their day. The effect is greatly diminished if that money is immediately divvied up amongst the other servers, making the difference to what they bring home negligible.

I've never worked as a server (though I did work at Chik-fil-A in highschool; employees are not allowed to accept tips there), and I did not realize that many restaurants are involved in the handling of tip money, rather than the tips going directly to the respective server.

So, no, that's not what I had in mind.

Why should anyone expect that sort of handling of tips? Not everyone has worked a job involving tips. I didn't. Should I have spontaneously asked one of my server friends "hey, btw, how are tips handled at your job? Like, I suspect that when I tip someone, you know, that money goes to them, because after all, I gave it to that person and not the restaurant and not anyone else, but just in case I'm mistaken, could you tell me what happens with the tip money after I leave it on the table? It's a question that's been gnawing at the back of my mind, and I just had to ask!"

My point being: unless you're a server at one of those restaurants, how would you know that your server doesn't get the tip you left for them? Could you substantiate such a claim?


You are not alone, just in a minority of people who are not familiar with something that is almost integral to US culture: that most people in the hospitality/services/restaurant industry depend more on tips than wages, and that the bigger the business (chain restaurants vs small local places) the more likely that their system involves pooling the tip money.


There are issues with tip pooling, but there's one thing that I am absolutely sure of: my tip was not intended for the person's employer, and certainly not for anyone who claims to have arranged for the work to be done by a nominally self-employed contractor.


There's the crux. People may or may not think that their tip is going into a pool, but people definitely do not think that their tip is them saying to the establishment itself "I wish you'd charged me more!"


>It is standard (though not universal) practice for restaurant staff to pool and divide tips, which would appear to be the same thing from a defrauding-the-tipper perspective.

In that case at least the staff get your tip. In this case Instacart is taking it for themselves.


> It is standard (though not universal) practice for restaurant staff to pool and divide tips, which would appear to be the same thing from a defrauding-the-tipper perspective.

Absolutely. Thought its definitely more pernicious to find out the restaurant owner was keeping the tips.


Switch to cash tipping. Tipping through CC or some other mechanism means at least one other party is involved and takes a cut. Cash tipping ensures the money at least is seen by the service staff.


I’m pretty comfortable tipping via credit card because I understand that the card company and a bank is taking a cut. I am _not_ comfortable with something like this, where it’s not immediately clear what’s happening.


Anecdotally, I've been told by a lot of former restaurant workers that management generally walks off with most or all of the credit card tips. I generally tip in cash everywhere as a result.


I worked for years as a server and this never happened to me. We just got taxed on them and everyone didn't report their cash tips.


Statistically speaking, the main party missing out on its cut when you tip in cash is the IRS. Not really an ethical concern for most of us, but for those who do feel bad about this, you could just overpay your taxes every year by say 10% of what you estimate you tipped in cash.


It is the obligation of the tipped employee to report their tips as income and pay taxes on them. True, it's difficult to audit so sometimes they don't, but that's hardly my problem.

The notion that you should overpay your own taxes to solve this is just bewildering.


The worker is supposed to report all cash tips. Since most of these workers probably pay little to no taxes, it really doesn’t harm the treasury, even if they fail to report.


Recipients of cash tips must report the income to the IRS for taxation purposes. The fact that many people choose to refuse to disclose their cash tip earnings doesn't mean that I should bulk up my taxes to make up for their fraud.


Companies must now report credit card transactions to the IRS. It's possible for them to see % of cash vs credit and the amount topped in credit. It would not be hard for them to audit you, the worker, if you report lower cash tips than the average than your boss reports in his business.


and it also reinforces the point that the whole tipping culture is ridiculous


I had a service industry job in texas that payed me around 2.50 an hour (iirc) and as long as I made enough in tips to cover minimum wage they didn't have to pay actual minimum wage.

It's immoral as fuck to steal tips. I don't care if it's legal. If I'm a customer tipping the person a certain amount I want to make sure it's actually helping that person and not just lining the pockets of their employer, that's absurd.


That might be legal in Texas, but in Washington it's explicitly illegal. In the state, tips are completely irrelevant to base pay, all employees must get paid at least minimum wage as base pay.

Instacart is going to get fucked very quickly by the Washington AG. This is as bad as Walmart not paying employees for overtime.


Especially because Washington's Attorney General is particularly fond of jumping on cases like this, particularly worker rights. But he is also fond of keeping startups in line. So this is a double-whammy case for him.


I'd love to see someone at Instacsrt jailed for wage theft.

They should have to pay back "the winnings" by 3x and fire the people involved.


The WA AG is a bit on the antsy activist side too: this is like a great poster case for the anti-gig-worker advocates.

in any case, this is really awful for the poor drivers. I had no idea.


This always seemed crazy to me. Basically the employer pays only a pittance and then stops paying until your tips exceed minimum wage. They're basically stealing the tips between $2.50 and whatever the minimum wage is in your area.


tipping encoded in to law in general seems crazy to me. many (most?) other countries don't have this ritual, and seem to do just fine. I've dined out in many other countries outside the US, and service is generally good regardless of whether tipping is involved/expected or not. And in the US, I don't feel my normal service is all that much better because someone is thinking I might tip an extra dollar or two on an $8 lunch.


I even feel it's the other way around, in other countries the tip is usually the change, like $8 meal, just leave a $10 bill and leave, staff is either happy or neutral, in the US if you don't leave enough you get nasty looks as you exit even if the service was unremarkable.


Many many places do that. I worked in PizzaHut in NJ, and they pay you less than minimum wage initially. Then you report your earnings, and if your tips + salary / hoursworked < minimum wage, then they will pay you the difference to match minimum wage.

So you have incentive to report 0.0 tips. But then our manager at PizzaHut let go everyone who reported 0.0 tips (when asked why, he said they called customers to confirm we did receive tips).

And that's not only PizzaHut, that's everyone doing that, at least in NJ.


Many states have what’s known as a tipped minimum wage which is different from the minimum wage.

The tipped minimum is usually something like $2 vs the $7 minimum wage (these numbers are probably off now that so many places have raised the minimum wage to $10 or $12).

Since in this instacart case they ended up paying out $.80 an hour it’s below even tipped minimum wage standards, although I assume there’s some dodge about claiming the employees are contractors to get around paying wages.


WA doesn't have a separate tipped minimum wage, which makes the violation even more flagrant.


> when asked why, he said they called customers to confirm we did receive tips

That would make some sense even. If a server doesn't get tips, that could be a sign that they are a bad server.


Also, that they were lying to him.

(Not agreeing with wage / tip theft, of course, but, as an employer, you need to be able to believe your employees.)


There is no moral obligation to say the truth when it is inappropriate to ask the question in the first place.


Yep. They need to pay reimburse those workers with a penalty fee tacked on.


That's not necessarily true. Folks in the gig economy are often classed as "independent contractors" and thus are not subject to the Fair Labor Standards Act, including minimum wage laws. They also are not entitled to, nor almost ever receive, reimbursements for work expenses. When you are talking about using your own vehicle and paying for depreciation, mechanical work, and gas, this is considerable. It often winds up being an implicit loan against one's own vehicle.

I'd be surprised if calling something a "tip" makes it legally obligated to go to a contractor. I'm sure their lawyers are very aware of the law on this. As someone else said, there is almost certainly a binding arbitration clause. This removes the possibility of individual or class-action lawsuits.

edit: The abuse of the term "independent contractor" is just one of many examples of how labor law enforcement has become lax in the last several decades. How many people on this site aren't in management and work unpaid overtime?


This is absolutely illegal. They are defrauding customers. No one would voluntarily add money to an order if it was labeled as "donation to Instacart" instead of "tip". They are deceiving customers to get money from them.


This really probably doesn't add up to fraud. There's a difference between being scummy and crime. This should be illegal of course, but it really probably isn't. Restaurants illegally take tips from their employees all the time, which would be a fraud against customers in the same way as this case. However, they don't get into trouble for fraud against customers, but wage theft. That of course doesn't apply to Instacart.


Would customers give the money if it were not labeled a "tip"? No. Is it a tip? No. Does Instacart gain something of value from this deception? Yes.

That is textbook fraud.


No, that really doesn't follow.


> There is almost certainly a binding arbitration clause. This removes the possibility of individual or class-action lawsuits.

But it does not remove the ability of the court to overrule the clause itself. So someone could still sue Instacart knowing that it will be thrown out if the court decides to enforce the clause.

In my life experience, these things are almost always up in the air until a judge says otherwise.

Getting to the contractor thing, the most workers can really do is file IRS Form SS-8 and see if the IRS will release them of some of their tax obligations. Other than that, there's really not that much enforcement.

Source: I was a misclassified contractor in 2017 while working in WA state. IRS forgave some of my tax burden, but Labor/Industries and Employment Security are absolutely useless if you don't have a literal Form W2 to use.


>But it does not remove the ability of the court to overrule the clause itself. So someone could still sue Instacart knowing that it will be thrown out if the court decides to enforce the clause.

Which they will. There's been a few recent cases that have made mandatory arbitration clauses more-or-less bulletproof.


I wouldn't be so sure about their lawyers being "very aware" of the law. If they were, they wouldn't have called it a "tip" in the first place, as "tip" has a specific legal meaning in most states and in the US tax code.

In fact, I would hesitate to say that the lawyers for most startups have any clue what they're doing, as most seem to be in it to play startup lawyer rather than provide necessary legal advice to their client/employer.


That's a shame. I wonder if customers have any recourse? I'd feel absolutely defrauded if I found out a tip I made through a service like this was (effectively) going to the operator rather than the person who the app represented it as going to.

I don't think "oh the tip went to the contractor we just lowered their wages by the same amount" sounds convincing in a court room.


Class action lawsuit.


So we need to get rid of this "independent contractor" loophole.


Neither major party is at all interested in doing this, only some on the left wing of the Democrats. Labor reform is opposed in unison from the entire business community, so it is extraordinarily difficult in our political system.


Same rules for should apply to wage theft as ordinary theft, more than $950 and it's a felony.


This isn't wage theft since they are independent contractors. It's more like a company stiffing a supplier. More of a civil than criminal matter. Of course, these folks wouldn't have the resources to sue anyway, even if they weren't bound by binding arbitration.


> More of a civil than criminal matter

I think the question though is _why_ is that? If I steal $950 from someone then it's criminal, but if I refuse to pay them what I agreed then it's civil. It's an odd discrepancy IMO.


Well, if you steal it, it's criminal, but that's simply because that's the definition of theft.

Taking stuff away from people, though, is not necessarily theft, and also not necessarily criminal. If you accidentally take someone else's property because you confused it with your own, for example, that's not criminal, but the other party still has a civil claim against you (namely, to be given back their property).

On the other hand, if you intentionally mislead someone into providing you with some service or product, promising to pay them for it, even though you never intended to pay, that constitutes fraud and is very much criminal.

Generally, it's criminal if it's in the interest of the public and civil if it is primarily in the interest of some party. Not paying some debt because you actually have doubts that you have to pay, or due to an honest mistake is not really something that affects anyone else. Someone intentionally causing situatons where others can't rely on them fulfilling their legal oblications can erode trust in a society, therefore it is in the public interest to prevent that. The boundaries can be fuzzy, but wage theft can very much be criminal.


For one, we probably don't need the police to come and arrest Instacart's CEO in this case.


/shrug

In this case they're doing something (questionably) legal but terrible.

There are plenty of cases out there of outright wage theft. I wouldn't have a problem with the people in charge of those decisions getting arrested.


I bet the U.S. Chamber of Commerce can tell you the answer to this one.


They are also committing fraud by telling customers it is a "tip" rather than a "donation to Instacart".


> This isn't wage theft since they are independent contractors. It's more like a company stiffing a supplier.

Why do you keep saying things to this affect?

A company stiffing a supplier is going to rapidly find themselves without suppliers, or the supplier can afford to / accounts for being stiffed on some orders.

An independent contractor who works for one, or maybe two very similar types of, company is very much like an employee in every way that matters to that individual “independent” contractor, and literally nothing like a B2B supplier.

Additionally, you seem preoccupied with existing legislation as though it has some higher virtue, whereas in reality the law can be, and frequently is, unjust and absurd.


They better hope there's no binding arbitration clause.


The workers may be subject to arbitration, but state regulators (who enforce employment law) are not.


The chances of there not being is approximately zero.


It may be, Federal Law is more specific on tipping, allocation, role definitions in the restaurant industry, but not well expanded to define other industries. State law can further regulate . In spirit, a tip is an independant transaction between 2 parties and should be accounted as one. You must pay min rate for position (2.xx+?) and employee must make above fed/state min wage with tips once accounted, you must increase your compensation to make up a defecit between wage + tips vs min wage. You cannot pay below a certain wage regardless of tip amount, or maybe that's only in specified roles. I'm not sure.


It will not matter. Washington state law does not apply. The sovereign state of Washington laws are superseded and invalidated by mandatory binding arbitration. The rights set out in the State of Washington's constitution do not apply, for they are superceded and ignored by mandatory binding arbitration.

Any dispute will go to a monkey court instead.


> The sovereign state of Washington laws are superseded and invalidated by mandatory binding arbitration.

No, they aren't; binding arbitration is a venue for resolving disputes about the application of laws, it doesn't supersede the laws, and manifest disregard for the law is one of the few reasons for courts setting aside a binding arbitration decision.


Washington state law certainly does apply. The state did not sign a mandatory binding arbitration agreement. The employee/contractor may not have the right to bring suit against Instacart, but the state maintains that right.

Thought experiment: could Instacart assault, kidnap, or murder a delivery driver and claim that arbitration is the only venue for redress?


And even then, the worker does have the right to petition the court to review the clause itself. So the worker can still sue with the knowledge that it will be thrown out if the judge decides to uphold the arbitration clause.


Washington state law is very clear that Labor laws cannot be superceded by arbitration clauses, and that employees, including contractors, cannot waive their labor rights.


This 'sovereign state' is the same state that uses a (regressive) sales tax to generate revenue, rather than an income tax. Maybe it'll grow up and be an adult state one day.


According to what ruling?

It depends on the agreement between Instacart and delivery staff.


The Fair Labor Standards Act disallows this type of agreement for ordinarily-tipped jobs.

I don't know how the contractor status of Instacart drivers affects this. They're not technically employees. But the verbiage of "Tip" in the UI is a strong signal to the customer that the money is directly credited to the driver. It should bear no relation to their fee from Instacart.

This is wage theft. A horrible agreement doesn't make it right, even if it is legal.


The google term you want is "tip credit" -- it is common and legal federally and in most states to deduct tips from your hourly wage. Washington state is one of the few where tip credits are not legal.

This is a very common setup in other pay structures as well, such as commissioned sales where you are paid a "draw" (such as minimum wage) and you don't paid get any commission until your commissions exceed minimum wage.

What's more, the tip money did go directly to the driver; Instacart just decided to pay less.

It's a pretty inhumane thing to do but on the face of it I don't see how it's wage theft. Welcome to the gig economy.


How is this allowed by law? If you have to pay back your minimum wage before you get your commission then it’s not really a minimum wage.


There are lots of kinds of draw, but this kind is essentially a loan against your future commissions (or in our context, against your tips).

Here's some more information about how it works legally: https://corporate.findlaw.com/human-resources/legal-consider...


The Fair Labor Standards Act (FLSA) covers only employees, not independent contractors.


Maybe so, but WA State Labor and Industries is not quite so "generous" to the gig economy, including their test for contractors, which is a bit more ... "rigorous" ... than some startups would like:

Does the independent contractor bring more than their personal labor?

Do they hire crew of their own or are they bringing other employees?

Or, are they bringing heavy or costly specialized equipment?

Are they an established business, working without your direction or control?

Are they free from your supervision, direction or control?

Is the individual’s business different and separate from your own?

Is the individual’s service “outside the usual course of business,” or in other words, does the contractor do something different from what you do?

Is the individual’s service being performed “outside of all of the places of business,” or in other words, does the contractor perform the service away from where you perform your services?

Is the individual contractually obligated to pay costs affiliated with the location from where the work is controlled (usually its headquarters)?

Does the individual have an established independent business that existed before you brought them on – OR – does the individual have a principal place of business that qualifies for an IRS business deduction?

Do you have evidence to demonstrate that the individual has an established business?

Does the individual have a principal place of business that qualifies for an IRS business deduction? Do you have evidence to demonstrate it?

Is the individual responsible for filing a schedule of expenses with the IRS, such as would be part of a business tax return?

Does the individual have all required registrations and licenses for their business?

Does the individual maintain his/her own set of books and records that reflect all income and expenses of the business?

This question is for construction contractors only: Is the individual a properly registered contractor?

Note that this is not an "Answer 'yes' to any question to be considered a Contractor", it's a "totality" thing. (https://www.lni.wa.gov/IPUB/101-063-000.pdf)

"I subcontracted some work to a guy who has a contractor’s registration with L&I. Doesn’t that mean he’s not my employee?"

Not necessarily. L&I auditors look at “direction or control” and other factors described on the previous pages. Because he is a construction contractor, all seven parts of RCW 51.08.181 must be met.

And so on...


All great questions but what has the state labor board not been enforcing it on Instacart up to now?


Because it wasn't obvious / evident / they haven't received a complaint from an affected individual in regards to this practice?


Regulations typically aren’t proactively enforced, but retroactively penalized.


Yet another reason this independent contractors thing is an exploitive scam.


Logically, independent contractors should get paid more, not less, than full time employees, because they don't get the other benefits.


Not sure why this is being downvoted, as you absolutely are not wrong about this. They are independent contractors who entered into a contract just like a restaurant could contract with a food supplier. They aren't employees in the least as far as the law is concerned.


Because Washington state is a little more rigorous than "did you enter into a contract? nope, not an employee!" than you describe.


How and why are you so vehemently defending instacart when it comes to WA state law?


I'm not defending Instacart, I'm just pointing out legal realities. Many folks in this thread are severely mistaken about employment law. Just because something is morally wrong doesn't mean its illegal. I'm from Washington as well. I know a decent amount about employment law here.


Is lenticular defending Instacart? It helps no one - much less the victims - to inaccurately portray their legal situation.


> At a minimum I'm going to be tipping in cash.

Do the right thing. Take a stand for human decency and make a compromise by closing your instacart account now. Absorb the inconvenience and do your own shopping. And make sure to tell instacart to (insert profanity of choice) if you can while closing your account. That behaviour is low down and dirty. Shady craigs list used car dealer level stuff.

I just walked three blocks in the rain to the local grocery store to pick up stuff to make dinner and food for tomorrow. Not like I was jumping for joy and made a dash for the door. I didn't want to, but I did. That's life.


Yep, exactly. I started using Instacart when it first came out. It was very convenient. But then I started to see more stories about how the company was changing the compensation structure. It got so bad that the delivery people were leaving flyers in the bags, made by that person, explaining how Instacart was basically screwing them.

I haven't used Instacart since then.


You didn't explain why that's "the right thing". Making sure the worker is paid well is the most important part.

It's also possible that instacart will lose money on the sales where they can't scam tips; that means you can use the service and pay the worker well and punish instacart and increase the incentive for them to change their policy.


Respectfully, I think you're being a bit naive. At the moment, the evidence points to Instacart _not_ being the kind of company that will respond to "incentive to change policy", but that they _are_ a company that will commit wage theft. Pull the ripcord, delete accounts, tank all the metrics (MRR/DAU/WAU/MAU), and force the company to change or collapse. Subtle hints won't be effective here, as the response their community support indicates.


This is basically the argument for removing the minimum wage entirely. Some money is better than no money, right? I'd prefer not to live in that dystopia.

Or we can just make it very clear that companies that engage in outright wage theft should be put out of business, so no other business ever tries it in the future.


I don't think you understand my argument at all. I'm suggesting that the tips be rearranged so that the working is making significantly more than minimum wage, and the company can't scam their way out of paying what they promised to lure in workers in the first place.

I'm all for bringing a legal hammer down on them! I'm just saying that as far as personal action goes, getting them to lose money while their worker gets a healthy wage is better than a boycott.


exactly. Most people don't tip on Instacart so doing the right thing would be to make sure they pay their employees well.


maybe the right thing is just stopping tipping altogether? Then Instacart will be forced to pay a somewhat reasonable wage


Good for you, but arbitrary moral judgements against everyone else never goes well. Walking miles to gather food and water is the reality for billions of people.

Using Instacart is a luxury in the first place, but having everyone close their account only hurts the very people you seem to be for. In case you missed it in the article, there is a workaround so that your tips are correctly considered, or you can always pay cash: http://www.workingwa.org/22cents


If Instacart closes down because of this kind of shitty behavior, people may learn a thing or two, and the next company in this space might decide that wage theft is not going to be part of their competitive advantage.


Sure, and meanwhile these workers don't get paid anything. There are ways to fix things without shutting it all down.


>>There are ways to fix things without shutting it all down.

Same arguments were used to suppose slavery. If we make slavery illegal, where will slaves work apart from cotton farms?

There are other jobs to do, it doesn't mean we have to allow blatant injustice to go on, in exchange for profits. All the while using a moral arguments to justify it.


My issue is claiming moral righteousness of the struggle of shopping for your own food after using a luxury shopping app. I pointed out that the article itself asked customers to use a workaround so both sides get what they want.

Frankly I don't care about this company but equating this to slavery just comes across as more of the same virtue signaling.


There appear to be plenty of other unethical companies to work for so this is unlikely to be a problem.


> arbitrary moral judgements

This is redundant. You are making a general argument here against making decisions based on your own morality.


Same here. I’ve been using instacart since 3 years almost everyday. But this is it. I am off it. I can’t believe the greed that some companies go to, to take advantage of people struggling to make ends meet. Shame on them


Same. I just tried to cancel my membership but the link isn't working. I contacted customer service to get a working URL and I will report back here when I receive it.


OP mentions the tip 22c and then the rest in cash to show instacart they shouldn't be doing this. I think it's a fair approach to see if they can be persuaded to make the right call.


That works, until it doesn't.

They are extremely likely to make another, more subtle bad call.

People who think this is OK can be very difficult to motivate.


Doordash too, apparently:

https://notipdoordash.com/

I've tipped a lot on Doordash. I feel ripped off.

My company regularly used Doordash for years and made a point of tipping on orders. Crazy.


Argh! I'll be closing my DoorDash account right now and also sending that website to anyone I know who uses DoorDash.


I used the support form to request a full refund of the component of all tips that I’ve made that were used to offset DoorDash’s expenses. I doubt they’ll do anything but close the case but it’s wirth the annoyance.

I tried to find a way to close the account but there does not seem to be one.


The reason it pisses me off so much is I have used them like, 3+ times a week for 2 years, and every time I felt good about tipping which of course now feels... well, not good.


I feel exactly the same about it, albeit weekly for 3ish years.


If they refuse, you could probably take them to small claims court for fraud, depending on the total value and how much you care. Though you'll have to do your own research on how to prove fraud in court or hire a lawyer...


If you go to support and search for how to cancel your account, they tell you to file a support request asking for your account to be closed. So you did the right thing.

I wish I had thought to ask for a refund of tips too, but I already sent my support request.


That's disappointing. Anyone heard anything about Grubhub?


hmm... what if tipping itself is a problem?


> Some of us have seen wages lowered by 30–40% overall.

I think this a danger of contracting for VC-backed "gig economy" services like Instacart and Uber. They often subsidize the cost of the service using funding (billions, in the case of Instacart and Uber) in order to quickly attract customers and workers, then reduce the subsidies once they are established.

It's not right, but at this point gig economy workers should expect it and plan accordingly.


I've used it a half dozen times. The quality of has gone way down. The first time was amazing with the shopper suggesting a combo that was not only better but cheaper. And it was delivered an hour and a half later.

Now it seems they skip items, replace it without asking and the earliest delivery is tomorrow. And the produce has a lot to be desired. It'll last two days and already looks crappy on delivery. I think they are in such a rush they just grab whatever.

The best thing for any app service, keep 20 in singles and just tip cash. I honestly don't know how the app tipping works but I have a feeling the full amount isn't going to the person.


I think this is a good step towards de-incentivizing people to tip for everything.


yes, please always tip in cash for any service. there's no reason the business needs to be a middleman there.


100%. I expect a class action suit from consumers.


I love how even knowing the company is stealing from their employees isn't enough to get you to drop using their service. I'm going to send at most 3 angry tweets about this before I forget about it and move on to the next thing to be upset about today.


There was a book [1] written about the myth that there are ethical consumers. Basically, no matter what people _say_ convenience, cost and other factors win out on the whole. I heard about the book in a recent Planet Money episode [2].

[1] https://www.cambridge.org/gb/academic/subjects/management/bu...

[2] https://www.npr.org/sections/money/2019/01/18/686665609/epis...


Tipping in cash seems like the best way to support the workers. Keep in mind the workers themselves are organizing this campaign- they want people to put a 22 cent tip (to show solidarity) and then tip in cash.

If that doesn't work then of course I'm going to drop their service. I just believe that supporting worker led actions is the best way to push change at this very moment.


While I agree that the parent comment should probably drop them. This comment won't get them to stop. Maybe something like proposing alternatives, and empathy. We don't know them so let's not generalize them into the crowd of 3 tweeters.

I use Uber from time to time. Knowing full well that they have some practices I admonish. I use Google, Microsoft, Amazon, Safeway, etc. I try to be a better consumer with products but it doesn't always work.

I think we can approach this without the pitchforks and realize we all do this to some extent. The OP recognizes the problem and suggests they'll change their behavior. That's a win.

Parent - good luck moving off of the service. It's hard to swap something you've come to rely on out, and good on you for recognizing that as a consumer you need to make a change.


I'll drop them if it comes down to it, but if anyone actually read the link I shared it would show that what I'm doing is supporting the worker led action that is trying to make change. The workers themselves are asking people to keep using the service, but to only tip 22 cents in the app (paying the rest of the tip in cash) in protest.


I saw that and that's even better. Which is part of why I don't like people jumping on the shame bandwagon without knowing the full story.

Thanks for clarifying. Good on you for taking an active approach to this and being thoughtful.

Also - I think this is where the power of the unionization comes into effect. While Unions can be a tremendous blocker of progress I feel that the pendulum has swung too far the against them.


GP is also tipping in cash, forcing instacart to pay the full boat and returning tip to its rightful place as additional (and untaxed!) income.

Seems like a not-bad approach.


Where did you get the notion that tips are supposed to be untaxed income?


It's not that they're "supposed to be." But they are.

Frankly tax fraud from people working for tips in the service sector should be among the very least of our worries as a society.


Probably from real life.


Have you ever seen anyone accurately report tips earned in cash?


If they're under the IRS estimate? Absolutely.

Above? Not so much.

A lot of wait staff seem content to push mis-information: "If you tip poorly, the IRS makes us pay tax on it anyway, i.e. we're having to pay to serve you!"

No, the IRS makes an estimate on how much tipped workers are paid. If you document and it's less, then you pay tax on that. But using the IRS as the big bad wolf to get more tips that you know damn sure you're not going to report, doesn't make me the most sympathetic.

I've seen wait staff say that they believe 20% should be a baseline, for bad service, 25 for "decent" and 30% for good service...


I worked a tipped job where we signed an agreement with the IRS to automatically report a flat rate of tips, regardless of what we actually earned. So on a bad day it was certainly possible to earn less than minimum wage. That said, I don't know how common such agreements are.


Admittedly, that's a good point. I somewhat view that as electing to always take the standard deduction, regardless of whether you'd get more itemized.

Not quite the same, but perhaps it's a quid pro quo, of sorts. "Ups and downs in the economy, we won't come after you for earnings above the flat rate, but you will pay when lower". Which does negate my point, but such an agreement is consensual.


I've never worked at a job with tips, but that agreement sounds weird to me. Do you have any more information on that? What is it called?

It doesn't seem to me that the IRS could just make "deals" with individual restaurants since congress has to actually legislate the internal revenue code. But I don't see anything when I search for what you describe.


> 20% should be a baseline, for bad service, 25 for "decent" and 30% for good service...

where does this insanity stop? 50%? 100%? No matter how much you tip, people will grow to expect it as baseline, and then some more


I've never heard wait staff making claims like that about the IRS, but what I can say is that if wait staff didn't want to get more money, they'd be quite unique in that respect...


Still financially supporting literal thieves.


The problem is the company, not the commenter you're responding to. Is it really necessary for you to shame them when they expressed concern about this, just because they won't take as extreme an action as you want them to? They're expressing some honesty and self-awareness, and you're directing your outrage at them instead of Instacart.

Why don't you do something productive with your outrage, like changing your own lifestyle and keeping it to yourself? Or better yet, raise awareness without bullying someone else's attempt to process their frustration in an even-tempered way.


[flagged]


Maybe so, but please don't post unsubstantive comments here.


I'm not even going to send an angry tweet. I'm going to keep ordering. If a driver takes the job, at the price Instacart wants to pay, it's on the driver, of course. And this works until it doesn't! Once people quit driving for IC, THIS is the market price signal which will cause the system to reconfigure. If IC can't get drivers, they must pay more!

I have zero illusions that enough people understand the free market to be patient and allow for this to happen. We need to teach more economics in grade school.


Instacart is defrauding their customers, who believe the tips are going to the driver, not straight into Instacart's pocket.

Customer awareness is the free market solution to this, if that's the hammer you want to use to fix everything.

Maybe grade school should focus on reading comprehension.


The proof of the sketchiness is that if you call the DoorDash support line, their phone reps are carefully trained with exact wording to be as misleading as possible about this. If you bring up the way payments depend on tips, they will carefully reiterate the talking points.

You can learn a lot from how companies feel about their practices by looking at how they train the customer support personnel with talking points to avoid admitting certain of them.


> Maybe grade school should focus on reading comprehension.

You had a strong comment without the implied insult. Don't compromise your point to be mean to someone.


I can't help but feel every time someone says "people don't understand the free market" its people who can't understand anything past the most simplistic explanation.

I'm going to leave you with a quote from Adam Smith who most would say founded the field of Economics.

> The interest of the dealers ... in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public... [They] have generally an interest to deceive and even to oppress the public ... We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labor above their actual rate ... It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms.


As a consumer, are you surprised that your tip is being used this way? I'd operate under the assumption that someone was being paid some sort of fair compensation, and my tip was an addition to whatever comp they earned.

Also, it's not clear to me, are the drivers told their comp for the job before accepting? Did this person know they would earn $0.80/hr?


The person was actually paid $10.80 - $10 of which was tip, and $0.80 was from Instacart.


Yes? That doesn't meet my expectations. I'd expect them to paid whatever reasonable wage ($12/hr? $15/hr?) and then get the $10 on top of that.


It doesn't meet my expectations either, but your phrasing made me worry that you thought their total compensation was $0.80.


Price signals are not the one, only, sole legitimate form of communication of preferences.


[flagged]


Personal attacks will get you banned here regardless of how wrong someone else is or how badly you think of them. Please follow the site guidelines.

https://news.ycombinator.com/newsguidelines.html


> how even knowing the company is stealing from their employees isn't enough to get you to drop using their service

why should it be?

ahh whaaat? mashes downvote button

since you are still reading, what is the exact thought process here, can you articulate this? So the service works and still provides a convenience for you, but is this action being masqueraded as the most effective way to get the company to change a policy amongst all other possible actions? Is it just to not "support" a company that does a single thing you disagree with? Is it something else?

I think there are more effective ways of bringing Instacart into compliance with your ideals. Isn't that a possibility?

edit: and no responses by time of writing while on the way to getting downvote censored. Be interesting to see if it flips when a different crowd gets off of work.


I downvoted this comment because it's got not one, but two complaints about being downvoted. Also, because it seems to be very low empathy ("Why shouldn't we reward thieves if they're effective thieves on your behalf?")


So ignoring 90% of the post and the entire point of it, got it

The perspective of “rewarding thieves” is a perspective I asked for

Yet you wouldnt have even commented except for the meta downvoting mention. I dont even think you realize that the “first” downvoting complaint was part of the original post and wasnt a complaint, it was because people are predictable and maybe they would continue reading and contribute to the thread


Can you give an example of more effective ways of bringing Instacart into compliance with your ideals? Do you mean, write them a sternly worded email?


I would make the hypothesis that mass sternly worded emails would have the same desired effect as mass service cancelling.

or to put it another way, I would say that an individual cancelling to telepathically convey their disagreement with a company is just as effective as an individual writing a sternly worded email

or even protesting on the street


It is important to be tipping in cash to begin with. Anyone doing unskilled labor and getting tips is not likely in a position to be able to afford the income tax on those tips. Always tip in cash.


Keep in mind that if they're not earning much, they're probably not paying any income tax at all, and until they're earning at least $38,700, the most they'll be taxed on their taxable income is 12%.

I don't think that supporting tax evasion should be a primary reason for tipping in cash.

But there are other reasons why tipping in cash is a good idea, such as making sure that the money actually goes to the worker, and knowing that they'll have immediate access to it, rather than having to wait until their next paycheck.


Breezing past your suggestion that workers should do some tax fraud, not reporting your tips also lowers your social security earnings which is going to lower your payouts as well.


Anyone who is doing an unskilled job that receives some component of their tips in cash is already “do[ing] some tax fraud”. Perhaps I am projecting my familiarity with the food service industry onto others; if you were not aware, this is the overwhelming norm with a rate of occurrence approaching 100%.

If you are working a laborious job and you get cash tips, they go into your pocket. Full stop. To assert otherwise is to be simply unaware of the realities. No one scraping by with cash tips is summing them for their 1040. No one.


Not everyone. I agree with you that it's very common, but an guarantee you from experience it's not 100%.


... it's been a while since I've been in the USA, but isn't the Earned Income Tax Credit still a thing? That might also show up if you're not earning that much...


> That's right: the customer's tip doesn't get added to the worker's check — it just gets deducted from what Instacart pays. In other words, up-front tips go to Instacart, not to the worker.

My understanding is that the Fair Labor Standards Act does not allow for employers to whithold tips.[0]

Gratuity/tip is a legally recognized concept. You can't just throw the word in your app and do what you want with the money it generates. There are legal expectations around how the money goes from the customer to the worker.

[0] https://www.ramoslaw.com/is-your-employer-committing-wage-th...

[edit] Added "not"


Instacart delivery workers are classified as independent contractors, which allows the company to flout basic labor laws. This is commonplace in digital age 'gig economy' jobs, but dates back to the early days of food delivery - e.g., most pizza delivery drivers are classified as independent contractors.

That having been said, the concept of defining contractor wages in relation to customer tips is new to me. I could see a legal argument being made in the employer's favor if the worker gave due consent to the transaction.

The idea here would be: Instacart states somewhere on the order prior to pickup 'if you choose to accept this order, you will receive $10, of which $.80 will come from us.' Since the delivery worker isn't running a 'shift' as an 'employee,' but just coincidentally happens to be running Instacart orders for 10 hours straight, this counts as one of many transactions that they've accepted and hence waived the legal right to complain about.

If this legal fiction sounds absurd to you, you're not alone.


I would agree, if the app didn't say "tip for delivery person" instead of "tip for instacart" or something maybe more ambiguous like "tip." Take a look at the screenshots of their app being discussed here: https://www.forbes.com/sites/bizcarson/2018/04/24/instacart-...


Are you sure those aren't the upcoming changes? There's another older screenshot further down that has more ambiguous wording.

Edit: welp, even that says it 100% goes to the person doing the shopping. Gross.


Insidious, right? 100% of the tip technically does go to your shopper.

Welcome to the world of 'tipped wages'. In my state, every paycheck, the first $520 worth of tips effectively goes straight to your employer for the purposes of paying your minimum wage and then you can have whatever is left over.


What’s more, this article is made by employees from Washington state, where they don’t even have a separate tipped minimum wage.


I think that may be the theory Instacart is using, but I suspect it hasn't been tested, and that they're doing this under the move fast, flout legal conventions until someone makes you stop startup strategy.


> Instacart delivery workers are classified as independent contractors

Only Instacart believes this.


They don’t believe it either, but it’s convenient lie, like corporations being people. It’s ridiculous, but as long as it’s the law and the people benefiting tip their politicians well, whomp whomp.


Dismissing corporate personhood as “a convenient lie” is pretty flip when the Supreme Court has ruled it is enshrined in the constitution.

But boy I’d love to dis-enshrine it.


Let’s not overstate the issue. The SCOTUS has a history of convenient lies, from the legal basis of segregation to fuckery around evolution.


> You can't just throw the word in your app and do what you want with the money it generates.

That's simple fraud. It's like going door to door collecting money for a charity and then just pocketing the money. Potentially Instacart will need to refund those 'tips'


I'm very curious to find out what may be in instacart's TOS here. Because at face value, and without hyperbole, this does look like it could be fraud. It seems unlikely that their legal team was not aware of potential issues here.

The strange thing about this is that it may actually be fraud against the people buying from instacart. The ones giving the tip. I'm curious then what kind of damages a customer could sue for beyond the amount of the tip. And I'm also curious if instacarts TOS for customers forces arbitration and prevents class action lawsuits.

This should be interesting to watch unfold.


Yup, and Washington state specifically does not allow tip credits. Tips in WA are always on-top or hourly wage. (Which is why even a terrible bartender in Seattle can do pretty well.)


But as soon as someone 1099's you, you're out of luck. Found this out the hard way when I got 1099'd by a startup I was working for in 2017. The IRS has a mechanism on the Federal level to fix things enough to avoid the higher tax burden, but WA state explicitly requires a W2 from an employer for even the most basic of unemployment benefits (the determination letter from the IRS apparently doesn't count).


So go the other way and report them for abusing 1099, for 1099 to be legal they can't even directly give you any hardware, you need to pay for it yourself, I think there are even laws about using their desks.


What I'm trying to say is that even if you report them for 1099 on the federal level, you do not necessarily convert to "employee" status in a state's eyes. This has an impact on your ability to file for unemployment, tax burdens, etc. You'd think that the federal opinion would influence the state's, but there's a breakage.


Also add on the fact that in Seattle the tipped minimum wage is 12/hr, where you only need to serve 20 dollars an hour worth of food in order to be making above minimum wage with tips should you also be busing your own tables.


> My understanding is that the Fair Labor Standards Act does allow for employers to whithold tips

I think this sentence says the opposite of what you intended it to.


Correct. I fixed it.


Isn't this exactly what restaurants all over the country do? Tips count as wages, and then the employer pays on top of that to make up the difference.


My understanding is that wages from the restaurant are fixed and tips do not count towards them unless the employee does not hit minimum wage- at which point the restaurant has to pay them more. I have never heard of a restaurant paying an employee less because they got more tips.

But I have never worked in a restaurant so I could be completely wrong.


How many restaurants have $1.9B in funding and are valued at ~$8B? There's also an obfuscation on payment to workers that doesn't happen in a restaurant.


They don't actually withhold the tip. The sentence you quoted is being sloppy. If the tip was $50, the worker would get the full $50.

The problem is that they use the tip as an excuse to pay basically nothing. It's not acting like a real tip.


This is a distinction without a difference. There is no practical difference between paying less "because tip" and not paying the tip. The legal system is not staffed by robots, either. I don't see how they can defend a class action regardless of what words they've written on a TOS.


> There is no practical difference between paying less "because tip" and not paying the tip.

There is, because the pay can't go negative.

> The legal system is not staffed by robots, either. I don't see how they can defend a class action regardless of what words they've written on a TOS.

It depends on what the lawsuit is for. Normally we have things like "minimum wage" but those don't apply if you manage to convince everyone it's a contractor situation. If they can be classified as employees then there's all sorts of lovely anti-tip-taking law. But that's a big if. And I don't think contractors have tip laws? It's not generally illegal to say one thing about how your company allocates money coming in and then do another.


Also the increasingly common practice where a seller takes your money, wrongs you in the most blatant way, such as just not sending half of your order (Instacart), charges you for wasting your time and never providing any service (Uber) and when you complain, they keep your money and give you their Monopoly money instead.

I feel like for someone somewhere in the attorney general's office, prosecuting these should be someone's full time tax paid job.


I hope that one of the employers in the new “gig economy” gets taken to court over the contractor-versus-employee issue and that the case sets a sane precedent. An old joke (“western koan”?) comes to mind:

Suppose that we decide to call dogs cats. In that case, what is a domesticated canine? Answer: it’s a dog, whatever you choose to call it.

(Pretty sure I butchered that, but hopefully the point still came through.)


So wait, isn't this a good thing? It discourages people to tip.


More evidence as to why tipping culture needs to die. Tipping fundamentally takes away the responsibility of paying someone for their work from the employer to the customer. In what other business context do I pay an employee of a company I deal with directly outside of the service industry where tipping is common? Wages are a cost of doing business. Pay the worker enough. If you want to still provide them an incentive to work hard, offer them incentive plans! Bring up your prices to reflect the true cost of your product or service. It's time to abolish tips.


Tipping is the "trickle down"-myth's small scale cousin.

It doesn't only take away responsibility of paying, but adds emotional and mental load cost to the customer. It's hilarious that people accept that in exchange for an illusory level of control (you being the mini manager/boss of your service task) over quality of service.


I think many people just haven't traveled to for e.g. many European countries where tipping culture is mostly non-existent because over there people the service industry receive appropriate wages and the prices of things are adjusted accordingly. The quality of service is good, and the people working seem much happier. They have a guaranteed income for their time.


As a customer tipping culture is highly annyoing to me, I don't want to be upsold three times per dining at least. The attention given, coming form european non-tipping culture, just feels absurdly fake to me.

I feel sorry about this, but from my experience, the only other business that comes to mind, that is so build on 1-on-1 flattering "good choice sir" and selling attention to me is prostitution. I mostly don't need that much attention, when I just wand to have a beer or lunch.


>The attention given, coming form european non-tipping culture, just feels absurdly fake to me.

Agreed.


In Europe the cultural meaning of a tip is also different than the US -- you tip for superb service, and it's generally only in restaurants.


And also (in Europe) most of the time you just add enough tip to round off the number. E.g. if it's 390 you pay 400. Locals (mostly) never tip too much. Particularly in countries where people eat outside often, e.g. Italy. You add that little extra to round up the total, never mind how many people you are in the group. Tourists usually tip way too much.

There's no tipping in Japan, and people get offended if you try to tip. If the taxi is 1963 yen, you pay 1963 yen (or get back the change to make it so). It's lovely. And the service is great.


Why do they get offended?


It's better explained on this page than how I can explain it: https://www.tripsavvy.com/tipping-in-japan-1458316


> In countries such as Japan where gratuity isn't commonplace, leaving a tip inappropriately is almost like saying: "This business probably isn't doing well enough to pay you a proper salary, so here's a little something extra."

> On the rare occasion that you actually need to give a tip in Japan, do so by putting the money inside of a tasteful, decorative envelope and seal it. The tip should be presented as more of a gift than simply additional cash or payment for services. Hand it to the recipient using both hands and with a slight bow.

> Don't insist that someone accept your tip; it may be forbidden and a condition of employment.

This raises more questions than it answers


There must be some different kind of worldview here.. I guess it must have something to do with coming from a tipping culture vs a non-tipping culture. If I imagine myself, in my current job, dropping by a customer and deliver the updated product, and then the customer tries to hand over a fiver. I would go, in my mind, "What? What am I supposed to do with that? Do I look like a beggar that just happened to bring the product? I have a wage, I don't need to be "supported" with breadcrumbs by someone who think he's above me. I'm not a dog." And so on. It would definitely put a sour taste on everything. And actually my company's code of ethics (we're a worldwide company) do forbid receiving anything from customers, with the exception of the occasional shared lunch.


Most people - traveled or not - would be okay with this if they knew the service person was making a fair wage. The problem is that service workers are not fairly compensated in the current system so our options are (a) hurt the service worker by not tipping to make a point, or (b) tip so the service worker is fairly compensated.

The only real way this changes is if we first make sure service workers are fairly compensated, but for most people this isn't a big enough issue to prioritize it - we only discuss it in forums like this when an article this appalling gets posted - but it is a big issue for the millions of restaurants in the US who would have to increase wages so they will all lobby against it.


Not being flippant but as a genuine question, besides just bribery, remnants of colonialism or heavy tourism destinations for North Americans, is a tipping culture existent anywhere besides North America?

https://en.wikipedia.org/wiki/Gratuity#By_region

We love traveling and I have yet to see local tipping culture anywhere besides North America (besides cheeky let's-get-more-money-from-the-foreign-tourist type).


as a European I must disagree about the quality of service. I only was a few months in the US, but the quality of service was much better than here. I don't know if there's a correlation with tipping though.


As a European who regularly experiences atrocious QoS in restaurants, I'd be willing to bet it has something to do with the fact they get paid a decent wage whether or not they even notice the customer.

As a customer I prefer "fake" service over being ignored, but as an employee I would prefer the European system.


As an American I also agree, since restaurants in Europe have to pay a higher wage, they can only afford a couple wait staff, which definitely makes it harder to get service.

Waiters in Europe also seem to be less interested in coming to your table.


I think it's easier to keep the tipping culture because everyone in the USA is already used to having extra random fees added to the sticker price of things.

In places where the tax and all other costs are already factored into the price, tipping is reserved for truly exceptional service.


There has been a no tipping movement in san francisco that has worked quite well. People don't tip anymore here and it is not socially accepted to do it.


As an SF resident I don't seem much evidence of this movement. I get prompted to tip very frequently for counter service, even at food trucks. People must be tipping if that's the case, although I don't watch other patrons.


generally people don't give tips for these things. It's just the default for a lot of these square point of sales. I don't know why square would do this honestly, this is just encouraging wrong behavior.


It’s configurable by the business, and you know exactly why they do it, to subtly push people to pay more money. There’s plenty of counter service fast food restaurants where I would never even think of giving a tip if paying in cash, but when the Square terminal prompts me whether I want to leave a 15% or 20% tip and then I have to go into “custom” and type in 0, I feel like a jerk. I know they’re just manipulating me and I hate it, but you’ve got of assume that they make significantly more money that way. Recently I’ve seen more and more restaurants adjust the default tip amounts higher, one of my favorite cafés in North Beach recently changed the settings on their Clover point-of-sale system so the tip options are “20% okay service”, “25% great service”, “30% amazing service”, and “(other)”. It’s infuriating.


I was in SF on a layover last October. Definitely tipped on our lunch and a beer downtown. But maybe that just outed us as foreigners. We didn’t get any odd treatment for it, either.


tipping culture has died in part of the country. As another comment pointed out, most people don't tip in San Francisco.


Too bad every restaurant in the US that has tried to eliminate tipping has failed. Servers end up with less money, patrons end up paying more than with tips, and many patrons actually like tipping.


That's not true. Many restaurants in SF refuses tips. It works well.


Well it should start with you right? Are you willing to never tip again in your entire life? If so, let us know how it goes (or maybe is going?)

Or, alternatively, maybe you don't live in a country with a tipping culture. And if so, then tipping doesn't really affect you.

People like to tip. I like to tip. Waiters and waitresses like to be tipped. My wife used to work as a waitress and would clear over $300 a night in tips alone. It's only a small minority of people who are against it.


I can't down vote your snarky comment, but yes I'd be absolutely happy to stop tipping, if the country I lived in paid fair wages to the people working in the service industry. The idea of rewarding high performers can be similarly achieved with incentive plans and at least guarantees people working in the service industry the minimum wage allowable by law. So for now, I'm going to continue tipping the culturally appropriate amount to ensure my server gets a fair wage and I will also support any activist initiative to abolish tipping.


And that's why tipping won't die because the few people who can make bank off of sob stories and bad logic.

Sorry, waiting tables is not a really complicated skill. Tipping is not related to quality of service.

Most people don't think about tipping. They do it because it's expected and maybe the waitress is hot. If pressed, they would likely prefer not to do it.

Servers are also some of the most disingenuous people I've seen when arguing about tipping. Because that top tier knows they can make a lot of money in a low-skill job. They like to complain about how much money they make and how screwed over they are by tips, but when restaurants pay a fair wage and eliminate tips, the staff abandons them for places that do tip. Why? Money.


Some people like to be in control, that's ok. Tipping bundles a simple service task to the in most jobs needless component of giving the customer the illusion of attention. If you're a waitress by choice and tipping works for you, that's fine too, but it simply doesn't scale to a large scale gig based economy. Being able to extract that amount of tips is a skill, that not everybody has. If venues could, they probably would take money for customer facing service job opportunities to work there for tips to exploit that skill, which would be the more honest free market model in my opinion.


> Waiters and waitresses like to be tipped

Waiters and waitresses HATE to NOT be tipped in a world where it's their livelihood. And studies have shown that this leads to racist, classist, and sexism within the service industry.

- Studies show that non-caucasians receive worse service because they are perceived as likely to tip less.

- Studies show that a high class restaurant server gets more in tips than a medium class restaurant, even when the food and service is of lower quality.

- Studies show that men often get tipped less than women for similar service.


Following that last point, it sounds like customer preference is shaping the demographics. If people prefer to be served by women, and tip them more, the field will skew female.


The first one is to show that both customer preference and perceived customer action affect tipping. In many ways these have self enforcing realities.


I worked a tipped job for years and hated that aspect of it. It made my income more stressful and erratic than a normal wage. I can confirm what others have pointed out, that it also reinforces stereotypes.

Like any erratic and arbitrary system there will be some winners who make out well, but it's not a great way of compensating people for work.


> Are you willing to never tip again in your entire life?

I would happily do that if I knew the server would earn a living wage even without my tip.

No one is talking about making tipping illegal. Killing tipping culture means not making food workers dependent on customers' largess and generosity to make a living wage.

Even in most countries without a tipping culture, you're free to hand over additional money to your server or cook if you feel like it. No one is stopping you.


It does. Most people I know in SF, including me, don't tip. Waiters here are way more used to it and don't necessarily expect it.


You are simply wrong. It's trivially easy to disprove your several comments about SF tipping culture with a few google searches.

Don't confuse the fact that nobody has confronted you for the idea that waiters don't expect you to tip them.


I live in SF. I don't tip, most of my acquaintances don't tip either.


If you're in places where non-tipping is expected and the staff are paid based on that, fine. If you're doing this in places where staff pay is determined based on expectation of tips, you may be an exemplar of what people hate about Silicon Valley dudebro culture.

It's entirely possible that restaurants in SF have shifted to non-tipping and jacked their prices up to pay higher base wages just because it's so expensive to live anywhere in that area, but in most of the country people in traditionally-tipped positions are often paid significantly below minimum wage (as low as $2.13/hour as the federal minimum, many states are higher). In California the tipped minimum wage at $11/hour is only $1/hour lower than the regular minimum wage, so not tipping may have less impact.

Numbers taken from https://www.minimum-wage.org/


Restaurants in other part of the country will raise someone's paycheck if the tip didn't reach a minimum threshold. We call waiters who expect tips "wasters" here in the bay.

That's not a bro thing, just a shift in culture.


I for one wasn't aware of a no-tip culture in San Francisco. I would totally not do it provided I was absolutely sure that this culture was a thing.


You should start this in your city! We call "wasters" the waiters that expect a tip here.


Actually, I'm currently in San Francisco, and I haven't heard anything of the sort. I probably should ask around though.

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