Instacart is playing games with its workers’ pay

This sounds extremely scummy, and if the story really is as simple as this article tells it I don't understand how the CEO of this company can look at himself in the mirror.

I think a great example of an app that lets me give positive feedback to service people is Uber. They let you get a ride ASAP with as little decision making as possible, and then you can rate it after you get where you're going and you have some down time. If they let me, I would probably leave a tip along with my good ratings. Everything else is invisible: I have no idea if there's a "service fee" included in the ride fare. They don't make me worry about it. They definitely don't make drivers have to hand out paper flyers in order to feed their family.

it is still not clear to how the people actually doing the work get paid and how much of the order they make?

Before 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, routes, etc. To be clear this was a bare bone, CLI application. I would run the service for 5 minutes, and collect the metrics. One thing was clear as mud, the more we scale up, the higher the loss. The thing was that my brother kept telling me that I am paying too less to my drivers, and that no one would work for me at that rate. Also, I will admit that my algorithm was a "simple Fed-ex" style hub-spoke model.

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-work leisure time by 10-20% per week.

If you consider that grocery stores are more crowded during the weekend, and assume 10 hours per day of leisure time, someone who places one order per week likely increases weekend leisure time by 10%.

Since stores close early on Sunday, having Instacart do the shopping on Monday instead can make a weekend getaway possible that would otherwise have had to end in time for that Sunday shopping trip.

I'm sure some people prefer to wander through the store filling up a cart, searching for difficult-to-find items and waiting behind several people for the checkout clerk to finish bagging all their orders. I do not.

I've also found that Instacart sorts items by price, so it's easy to fill the virtual cart without falling victim to all the end-cap advertising and impulse purchase scams that the stores have going. When I go to a physical store I frequently end up buying things I didn't really intend to, but with Instacart, I only end up with the things I actually wanted.