Despicable. That way of hiding the tip belongs in Wikipedia under Dark Patterns. I hope Instacart burns.
Instacart is playing games with its workers’ pay
141–150 of 371 posts
Re: Instacart is playing games with its workers’ pay
#142I'm an avid Instacart user, and I refuse to pay the service fee, nor the tip. Companies need to pay the drivers fair wages, and charge the customers enough to do so. Don't push that responsibility to the customer. Also, the service fee is perfect example of a Dark Pattern[1]. The actual service fee option (which is pre-selected at 10%) is hidden below the fold in the iPad app (and iOS?) checkout widgets. You have to…
Of course you have the right not to tip, it's optional after all, but many people do choose to give tips, and then the question is whether part of the tip is being skimmed off by Instacart.
Restaurants have paid large fines under the Fair Labor Standards Act for tip skimming; I have no idea if FLSA applies here, but if a consumer chooses to tip, s/he has a reasonable expectation that the money will be going to the person providing the service and not to the person's employer.
Re: Instacart is playing games with its workers’ pay
#143They have tens of thousands of customers, yet are worth multiple billions of dollars (valued at $2bn in 2015.) That's just incredible. Let's say they have 100k customers who each use the service every week. That's 5.2m orders per year. Let's say $100 per order, to be generous. At a 10% service fee, that's $50m for a two-year-old 40x revenue multiple. Before paying their contracted workforce. This does not make sense.…
>What is the market for +10% on groceries and basic necessities? People who live in the suburbs without cars. Cities are successfully discouraging car ownership by making parking scarce near downtown offices and even the suburban transit stations that lead to downtown offices. At the same time, cities aren't permitting the construction of dense, walkable neighborhoods, at least not fast enough to make them affordable…
> People who live in the suburbs without cars.
I've ordered lots of Instacart in NYC and Chicago. I used to have it drop off a few things at the office for lunch, and a few to go in the fridge for lunches later in the week. Consider that Instacart will charge 10% to deliver a baguette and some cheese, which can make lunch for several people. This is a way better deal that Seamless.
Seamless charges what amounts to a 25% markup to deliver food which has often taken so long on the way to its destination and ends up relatively unappetizing.
In NYC the startup Maple has tried to solve the soggy Seamless problem by improving logistics. I haven't tried it, though, so I don't know if they were successful.
Re: Instacart is playing games with its workers’ pay
#144> Instead of the tipping option appearing on the checkout page as it originally had, a default 10 percent “service fee” sat in its place. If I could take a guess, I'd say this is more related to the user experience. I hate tipping. I'd rather just attach a 10-20% fee instead of needlessly evaluating someone else's performance with every delivery. Or better yet, I'd rather just use a company that adequately pays its o…
I feel like even if they paid their delivery people a reasonable wage they'd still expect tips. Ive had movers that made over 50/hour not including the cost of materials/truck/etc ask for a tip. I was all for Uber being tip free until drivers started driving for Lyft which does tips in-app, and now all the drivers expect it. I've always felt this way with Pizza. Most places charge a delivery fee. That itself should b…
With pizza, your solution can't work. You have to pay the driver base pay, and they get tips on top. So the base pay has to come from the menu price + delivery fee, and if you get rid of the delivery fee, it has to come from the menu price. But if you raise that, you're distorting demand by making in-restaurant purchases more expensive.
Re: Instacart is playing games with its workers’ pay
#145They have tens of thousands of customers, yet are worth multiple billions of dollars (valued at $2bn in 2015.) That's just incredible. Let's say they have 100k customers who each use the service every week. That's 5.2m orders per year. Let's say $100 per order, to be generous. At a 10% service fee, that's $50m for a two-year-old 40x revenue multiple. Before paying their contracted workforce. This does not make sense.…
It's basically Webvan 3.0. https://en.wikipedia.org/wiki/Webvan
No, it's nothing at all Webvan. Instacart owns no warehouses, no inventory, and not even any vehicles.
Re: Instacart is playing games with its workers’ pay
#146Earlier quoted context omitted.
Here's a secret: most investors lose money.
Well, sure. They usually know they're going to lose money going in, and they can pick all sorts of things to lose their money on. That doesn't explain why the picked this one particular thing to lose money on.
Of course I can't find the source for it now, but during Instacart's last fundraising round they did some really weird stuff. For starters, the investors were only allowed to view their financials in a printed book in a room, and were not allowed to take pictures or write anything down to mull it over and make a decision.
Apart from that, you have to understand that there are a lot of investors, and if you can convince just a few of them that the upside is huge then you've got funding. It's not hard to get traction in a space like delivery where everybody knows it's something people want. But the problem is they get traction by operating at a loss, so when they try to run profitably they inevitably fail as people bawk at the prices.
Re: Instacart is playing games with its workers’ pay
#147They have tens of thousands of customers, yet are worth multiple billions of dollars (valued at $2bn in 2015.) That's just incredible. Let's say they have 100k customers who each use the service every week. That's 5.2m orders per year. Let's say $100 per order, to be generous. At a 10% service fee, that's $50m for a two-year-old 40x revenue multiple. Before paying their contracted workforce. This does not make sense.…
Say the average wage is $10/hour. If it takes one hour to go and do that shopping, I break even by paying someone else that $10, if I value my leisure time as equivalent to my wage. More likely, most Instacart customers earn much more than $10/hour. For someone with a busy work schedule, there might be 2 hours of leisure time available per day during the week. This means that by using Instacart I increase my after-wo…
> More likely, most Instacart customers earn much more than $10/hour.
Why do you think that?
Re: Instacart is playing games with its workers’ pay
#148Earlier quoted context omitted.
So Amazon Fresh has an optional tip . Instacart is adding a default 10% fee that goes into their pockets - it is not a tip. And they do not pass the 10% fee on to the employees in wages - it stays as part of their bottom line. Higher-ups realized just how much the tips are worth, are now stealing them by default behind a purposely confusing interface that their customers cannot understand, and pocketing the differenc…
I understand it's not the most conventional way of doing it, but why it's someone "higher up" and that's a bad thing? Instacart is not Mother Teresa, its sole purpose is to make profit and I want it to do that as much as it possibly can. I want this service to exist so I don't have to feel like a chimp in a grocery store with a basket going from aisle to aisle in fact why do I even need to justify why I want it to ex…
> I want this service to exist so I don't have to feel like a chimp in a grocery store with a basket going from aisle to aisle in fact why do I even need to justify why I want it to exist?
You're asking why you need to justify paying someone else to "feel like a chimp" so that you don't have to?
Re: Instacart is playing games with its workers’ pay
#149Earlier quoted context omitted.
It makes a lot of sense if you know how perverse financial markets are. The difference between those millions and those billions is the perceived potential of the company. All you need is some investment banker becoming convinced that noone wants to visit physical stores anymore, and suddenly money starts pouring into companies supporting that view of the future, almost regardless of whether they are actually profita…
Right, so the question becomes "Why do enough people perceive the potential of Instacart to be billions when a back of the envelope calculation by a guy on Hacker News suggests that's not the case?" Presumably said investment bankers are capable of doing the same math as Hacker News readers, so why did they still fork the money over when they have many other crazy bets to choose from?
Because a healthy portfolio is distributed not only in the amount of risk (I.e. low vs high risk) but also in economic sectors (I.e. tech/futurism, health, energy, agriculture).
For any given investor, the decision to invest in Instacart or any other "crazy bet" is not made in isolation, but within the context of their existing portfolio, which means that the same investor could rationally decide to either invest or not invest, because that decision depends on the rest of their portfolio.
Back-of-the-envelope calculations on HN are always calculated in isolation.
Re: Instacart is playing games with its workers’ pay
#150Before Instacart was on the scene, my brother and I thought of about a similar service. My brother in his college days used to be a pizza delivery driver, so he had the "real world" experience. Over the weekend, I quickly created a simple dropwizard java jar that would take in two variables - number of drivers, and number of orders. Everything else was randomized to be close to reality - such as delivery times, route…
Very cool story. Love that you tried it, love that you're honest about it now.