"Delivery Startups Are Using Tips To Fulfill Pay Promises, And Customers Are Mad" — BuzzFeed
Instacart confirmed that when its payment algorithm determines a driver should be paid below that guaranteed $10, the company uses the customer’s predelivery, “up front” tip to cover the difference. The “up front” tip is automatically set to 5% on the Instacart app; if the customer removes the tip, and the payout would be below $10, Instacart itself covers the cost. The company said the number of orders where the algorithmically determined payment comes out to under $10 is low, but declined to specify a percentage.
When Instacart rolled out this payment system nationally at the end of last year, drivers complained that it lowered their incomes. But it wasn’t until the Washington state–based labor group Working Washington published a viral blog post about Instacart’s practices that customers realized how their tips were being used.