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Instacart Workers’ Revolt Over Tips Reveals A Big Problem For The Gig Economy

Companies like Instacart, DoorDash, and Uber rely on workers to report problems with the app, creating an opening for both regulators and the public to criticize them.

Posted on February 14, 2019, at 6:22 p.m. ET

Jeff Chiu / AP

In the face of widespread public outcry, Instacart last week scrapped a controversial policy that used tips to subsidize the minimum payments it promises workers. The policy caused customers to feel misled and workers to feel cheated, and the ensuing dustup — which was noted by members of Congress — called attention to other unseen exploitations of gig economy workers, among them time spent doing unpaid troubleshooting and tech support for the well-funded platforms built on their labor.

While certainly a cost saver, this strategy could be a liability as regulators and the public have turned a critical eye toward Silicon Valley: “It’s outrageous. It’s a $7 billion company, they’re going to IPO, and they’re basically having wage theft,” said US Rep. Ro Khanna while discussing Instacart in a recent appearance on Fox News’ Tucker Carlson Tonight. “It’s a scam.”

Khanna — a Democrat from Silicon Valley, which makes his appearance on Carlson’s show all the more notable — has been outspoken about regulating the tech industry, which is in some ways a bipartisan issue. But he wouldn’t have known about the Instacart issue at all if it weren’t for the gig economy workers who took screenshots, compared notes, and coordinated with Working Washington, a Seattle-based labor group, to publish evidence of what Instacart was doing.

Unlike the freelance hackers who sometimes earn real money from reporting security vulnerabilities to tech companies, gig workers who spend hours on the phone with customer service to report glitches on platforms aren’t compensated for their time. The customer support teams that are supposed to facilitate internal communication and quality assurance are often call center workers following scripts, with heavy workloads and little ability to actually resolve the daily issues that gig workers encounter.

And those issues don’t exclusively impact workers: When Instacart customers realized how the company was using their tips, they threatened to stop using the service. As the events of the last week have shown, legislative scrutiny around gig economy issues is high, which means relying on unpaid labor to monitor gig platforms could be a problem for these companies — especially as they push toward IPOs.

“We do troubleshooting for these platforms, and we don’t get compensated for it at all,” Vanessa Bain, a San Francisco–based Instacart delivery worker who’s been involved in efforts to organize the company’s contract workforce for three years, told BuzzFeed News. Bain estimates that she spends 30 hours per week addressing issues with Instacart while she’s not actually working.

“The workers themselves are operating as HR departments.” 

In general, gig economy workers are paid low wages, on which they have to pay taxes, in addition to covering the cost of things like car maintenance, accidents, or parking tickets. Bain says she spends over 40 hours a week with the Instacart app turned on waiting for lucrative jobs to pop up, but only earns about $500 for 25 hours of actual driving and delivery work. Instacart delivery workers aren’t compensated for time they spend waiting with the app on.

“The onus of responsibility should be on the corporations to make sure they’re meeting their own pay standards,” she said. “It shouldn’t be on us, as independent contractors who aren’t compensated for anything other than rides or deliveries, to allocate tons and tons of time to these situations that occur on an almost daily basis.”

Gig workers on other platforms also say they spend hours of their off-the-clock time troubleshooting glitches and discrepancies. For example, at the end of last week, Uber drivers in San Francisco caught yet another glitch in the company’s app: It was charging passengers high prices for rides in the city due to surge (demand-based) pricing, but the same surge wasn’t appearing in the driver app. That effectively meant that Uber was collecting extra payment from passengers that it wasn’t passing on to drivers.

After reviewing drivers’ screenshots shared by BuzzFeed News, Uber said this was an unintentional glitch. The company apologized for the error and said it would refund affected drivers. But to get Uber to fix the mistake, the drivers had to spend their time testing the error themselves, discussing their findings in driver forums, and sharing their results with journalists. This system continues to fray drivers’ trust, which itself could be a long-term problem as companies churn through the labor force.

“It’s always a challenge for workers to show that they are being cheated, but these companies are such black boxes that the barriers are that much higher — and of course the companies have no interest in discovering errors that might cost them money,” Rebecca Smith of the National Employment Law Project told BuzzFeed News. “The workers themselves, and the organizing groups that are working with them, are operating as HR departments as well.”

A San Francisco-based driver named Michael who was impacted by last week’s glitch told BuzzFeed News that he repeatedly reached out to Uber’s customer support line about the problem, but never got a resolution. He said that when it comes to missing pay, it’s important for drivers to advocate for themselves, whether by email, phone, or going to one of Uber’s “Greenlight Hubs,” where drivers can talk to customer service reps in person.

“You’re spending a lot of time, and a lot of these things are little money, so sometimes it’s not worth it to fight that amount. But then you don’t get that money, and Uber just gets to keep it,” he said. “It’s like, ‘Do I really want to go into the hub for $8?’ If you don’t, think of how many other people are losing $8, and Uber gets to pocket that.”

Michael said he's been partially refunded by Uber for last week's glitch, but is still corresponding with customer support about further adjustments. "One day," he said, "I hope they will be transparent with what's really going on."

Amazon drivers who suspected the company was (like Instacart) using their tips to cover its promised minimum pay, went to even greater lengths to get proof. Algorithms often determine gig workers’ pay, and it’s often presented in an opaque fashion, making it hard for them to understand exactly what they’re earning, and how. According to an LA Times story published last week, one Amazon Flex driver actually had a package delivered to his own house and was ensured that he’d be the one delivering it, so he could leave himself an unusually large tip; when that tip didn’t appear on his payout that week, he was able to confirm that Amazon was using tips to subsidize minimum pay guarantees. (Amazon confirmed this, but it won’t be changing its policy.)

Sage Wilson, communications director for Working Washington, the labor group that helped elevate the Instacart workers’ campaign, saw firsthand how much time and effort the workers put into monitoring the app and getting the company’s attention.

“They’re hurtling from one glitch, scandal, or lawsuit to the next.” 

“When you’re a customer, the glitch … it’s an inconvenience. But when you’re relying on an income to pay the rent, it’s bigger than an inconvenience when the thing doesn’t work. It’s interesting to see how they don’t seem to have incentives to get that stuff right currently,” Wilson said. But, with the help of groups like Working Washington, Wilson said public and legislative backlash could become the impetus for companies to be more cautious with their treatment of workers.

“The way they’re doing it now, left to their own devices, isn’t working for anyone,” Wilson continued. “They’re hurtling from one glitch, scandal, or lawsuit to the next.”

Gig companies are plagued by scandals. Amazon delivery workers who, under pressure and without enough time to find a bathroom, are caught on camera doing their business outside go viral. Two years ago, thousands of customers decided to #DeleteUber over the company’s decision to raise pay for drivers picking up riders at the airport during a taxi strike, which was seen as a form of scabbing. The public crisis was the beginning of a very bad year for Uber, which resulted six months later in its CEO’s resignation. In a world where there’s fundamentally little difference between the service offered by Uber versus Lyft, Instacart versus Shipt, or DoorDash versus Postmates, public sentiment matters.

Lawsuits, too, dog these companies. Workers have sued almost every gig economy company (Uber, Lyft, Instacart, DoorDash, Postmates, Grubhub, and Deliveroo, just to name a few), but those suits take years to resolve, and many have been settled before reaching a resolution.

The intervention of progressive legislators like Rep. Khanna — who, in the general shakeup of primary season, are eager to stand out from from the crowd — could have a more immediate impact. While over the past few years lawmakers have talked about drafting legislation that would protect independent contractors — the notion of inventing a third worker classification was bandied about four years ago, while more recently, the idea of a portable benefits system has become more popular — the current political atmosphere has made some elected officials, especially progressives, more vocal.

“The digital revolution is creating an extraordinary amount of wealth. They can afford to make sure there’s a middle class. I think it's almost ridiculous for these people not to see the divide, and how they’re contributing to that,” Khanna told Tucker Carlson. “If you want to make sure that we have a unified country, then do some basic things: First of all, make sure everyone is participating in the benefits of technology, not that all the wealth is just going to a very few individuals.”

Khanna — who coauthored a bill with Sen. Bernie Sanders that helped get Amazon’s full-time employees a $15 minimum wage — isn’t the only one weighing in. Rep. Alexandria Ocasio-Cortez’s policy adviser Dan Riffle chimed in about Instacart on Twitter, arguing that all tipped workers should be paid a minimum wage, regardless of where they work.

“We know, ultimately, we need to not rely on these companies to self-regulate,” said Bain, the Instacart worker who’s been part of the organization effort. “They aren’t going to do it, and they’ve proven it time and time again. So, realistically, the only way we’re ever going to see long-term, lasting change is from external pressure like the law. That’s our end goal.”


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