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.
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.
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.
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.
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.
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.
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.
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.
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, 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.
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?
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.
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.
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.
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.
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.
> 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.
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.
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.
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.
> 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.
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.
> 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.
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.
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?
"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.
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.
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.
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.
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.
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.
>>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.
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.
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.
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.
> 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 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].
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.
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.
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...
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.
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.
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.
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?
> 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
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
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.
... 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...
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...