June 23, 2017

Instacart’s Service Fee Riles Tipped Workers

Image Credit: Kwangmoozaa/Getty Images Depending on your point of view, tipping is either a way to link compensation to quality of service — or a way to give workers a lower hourly wage and put the onus of paying their salaries on the customer. But however you feel about tipping, you probably agree that tips should go to workers, not to the company that employs them. The law agrees with you there, doling out stiff penalties to employers who attempt to take a cut of their employees’ tips.

But that’s just tips. Levy a “service charge,” in addition to or in lieu of tips, and there’s almost nothing stopping a company from adding to their bottom line, potentially at the expense of their workers.

That’s what some disgruntled workers allege is happening with grocery delivery startup Instacart. Last year, the company replaced tips with a service fee with the stated goal of making pay more consistent for its workers. Per Instacart : “100% of the variable service amount is used to pay all shoppers more consistently for each and every delivery, not just the last shopper to touch the order.”

“Many workers looked at it another way: Instacart, in their eyes, saw […]

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The News for the Gig Economy Staff is constantly searching the web for the latest news regarding freelancing and gig platforms to bring them to you in one handy place. All articles with this generic author have been sourced with the original location at the bottom of the piece. We encourage our readers to view the original source of all excerpts. NGE is a project of ARC Online, LLC.

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