Delivery App Changes Tipping Policy after Backlash

Category: Business


Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. revamp / riˈvæmp / (v) – to change something and make it better

    The HR department revamped the company’s policies by adding more employee benefits.

  2. compensate / ˈkɑːmpənˌseɪt / (v) – to give something in return for something else

    Most businesses compensate their employees’ hard work through bonuses.

  3. shortcoming / ˈʃoɚtˌkʌmɪŋ / (n) – a fault or mistake

    My friend apologized for his shortcomings, but I’m not ready to forgive him.

  4. call (someone) out / kɑːl aʊt / (phrasal) – to criticize a person or an organization

    The manager called the staff out for always being late.

  5. transparency / trænsˈperənsi / (n) – the act of being open and honest

    Companies need to practice transparency to gain the trust of their employees.


Read the text below.

A US-based delivery app will be revamping its system of tip distribution to employees.

Instacart, a grocery shopping and delivery app founded in 2012, announced the change last February. This change comes after Instacart’s workers reported that the company had been using the tips they earned to pay for their salaries.

In October 2018, Instacart implemented an earning system called “batch payment.” In this system, workers were paid based on the kind and amount of items they deliver. The company guaranteed that workers would receive a base rate of $10 per batch payment.

However, in instances wherein the batch payment did not reach $10, Instacart compensated for the shortage by using tips given by customers. Workers reported that this action caused their total wages to significantly decrease by around 30% to 40%.

After receiving backlash, Instacart’s CEO apologized about the company’s shortcomings. He also assured that the company’s updated policy will provide a more fair and competitive compensation for employees.

In the new policy, tips earned by workers will be separated from their salary. Instacart also said that there will be an increase in the workers’ minimum batch payment for “delivery-only” jobs and for “pick-up and delivery” jobs. The company will also compensate workers who were not able to receive tips from October last year.

Workers’ advocacy group Working Washington welcomed the change. The group called Instacart out for its unfair policy through an online petition early this year. Working Washington encouraged Instacart’s workers to continue fighting for pay transparency. It also urged Instacart to become more transparent in accounting workers’ salaries.

Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

• Do you think Instacart’s new policy is enough to compensate its workers? Why or why not?
• In what other ways can Instacart compensate its workers? Discuss.

Discussion B

• Why is it important for companies to recognize employees’ rights? Explain.
• In your opinion, what employee rights should be given higher priority (e.g. fair compensation, required benefits, freedom from discrimination)? Discuss.