Instacart to InstaCrash: Are they next?


“In aggregating Shoppers’ stories, we’ve discovered a pattern of troubling and systemic issues with Instacart’s relationship with its front-line workers.” 

There is a toxic relationship brewing between Instacart, the $3B grocery delivery startup, and its Shoppers who are responsible for delivering its groceries to customers.  Instacart’s business model depends on tens of thousands of shoppers across the US, designated as independent contractors.  We’ve heard from hundreds of these Shoppers over phone interviews, social media, and the dumpling community.  In aggregating Shoppers’ stories, we’ve discovered a pattern of troubling and systemic issues with Instacart’s relationship with its front-line workers.

Shoppers would like to see Instacart dramatically improve their poor behavior.  Here are some of the more troubling issues we’ve heard:

  1. Misleading “service fees” 

  2. Privacy concerns with the Instacart Shopper app

  3. Physical injuries to Shoppers assigned to deliver commercial orders

The situation is emblematic of the growing disconnect between Silicon Valley’s elite and the working class – and Instacart is a case study.  We predict this will result in negative consequences for the company, and is perhaps an early indicator that Instacart will be the next to follow Uber’s dramatic shakeup.  Are Instacart’s founders and investors going to fix Instacart’s problems before it’s too late?  Shoppers have important recommendations for them.  We hope Instacart is listening.  Let them know what you think.

Apoorva Mehta, Brandon Leanardo, Max Mullen

Board Members & Observers
Jeff Jordan, Michael Moritz, Mary Meeker, Hrach Simonian

Andreesen Horowitz, Sequoia, Kleiner Perkins, YCombinator, Canaan Partners

Costco, Whole Foods, Safeway, CVS, BevMo

Misleading “service fees”

Instacart charges a 10 percent service fee that Shoppers believe is purposely misleading customers into thinking that it’s a tip for their Shoppers.  In fact, the service fee is paid to Instacart, while the tip amount defaults to zero.  To tip Shoppers, customers must complete a hard-to-find, multi-step process.  This issue is so important that Instacart recently settled a class action lawsuit with over 31,000 workers and agreed to clarify the difference between service fees and tips, as reported in Recode and Techcrunch.  Despite legal action, Shoppers tell us that Instacart’s deceptive service fee practices continue.  “Shady company,” “deceptive,” and “unfair business practices” are descriptions we hear from frustrated Shoppers about this issue. 

We placed an Instacart order to see for ourselves.  During the checkout process, Instacart automatically sets the service fee to 10%. The fine print says the service fee is intended to “competitively pay all Shoppers working with Instacart.”  However, the Shoppers we spoke to didn’t receive the service fee directly.  Confusingly, Instacart also labels the tip field as optional, though doesn’t mention that the service fee is optional too.  Other food delivery companies such as Doordash clearly label and explain their fees, in addition to adding a default tip during the checkout process.

Instacart’s service fee, in our assessment, is purposely deceiving customers – it funnels shoppers’ tips to Instacart’s revenue, creating the facade of better unit economics for Instacart investors at the expense of their Shoppers.  And given the previous legal action and current Shopper frustrations, this is a huge risk for the company.

Recommended Changes:  Shoppers would like to see Instacart improve their deceptive service fee and tipping practices.  Instacart should study industry best practices for more transparent and ethical treatment of tips.  Also, add a default tip amount to the main checkout page and rename the confusing service fee as “Instacart Service Fee.” Let customers know that this fee is not a tip.

Comment from Instacart Shopper on

Instacart’s confusing service fee and tip options.  Source:

Doordash clearly shows service fee and tip information.  Source:

Privacy concerns with the Instacart Shopper app

Instacart’s Shoppers are concerned with the company’s treatment of their personal information.  The Instacart Shopper app requires that Shoppers share access to their location “Always” and that they enable “Background App Refresh.” So, to work for Instacart, they force Shoppers to grant access to their personal information, always, and at Instacart’s discretion.  This is making some Shoppers uncomfortable.  Not surprisingly, the Instacart Shopper app is not available for download from Google or Apple’s app store.  Uber and Lyft’s driver apps are both available there, so we wondered why Instacart was so different. 

After research, we learned that the only way to start shopping for Instacart is to bypass the app stores and to install the app directly from Instacart’s Shopper website.  By default, Google Android and Apple iOS prevent these types of apps from running.  “Install Blocked” is the message Android prompts during the Shopper app install process.  To complete the install, a new Shopper must complete a multistep process granting “Instacart Inc” special access to their personal device and data.  Once Instacart’s app is installed, it requests users to turn on “Background App Refresh” and “Allow Location Access – Always.”  However, Instacart’s app is more persistent than others.  Their app only functions when these tracking-features are enabled.  Disabling either one immediately locks the Shopper app.  In comparison, the Lyft driver app operates without Background App Refresh and with location-tracking enabled only while using the app. 

Instacart tells Shoppers that the “Background App Refresh enables many time-saving features…”. However, their privacy policy reveals a different story. Instacart states they are logging personal details, including “pages that you navigate to and links that you click.”  Also, they track your device location ‘when the app is running in the foreground and background.”

One Shopper was surprised to see a message appear on their home screen that said, “InstaShopper Arrived at Home.” What else is Instacart doing with Shoppers’ personal information?  Why is Instacart so persistent in tracking shoppers while not using their app?

Recommended Changes:  Make the Shopper app available in the app stores, just like many other on-demand companies.  This provides Shoppers some protection from software that has not passed Apple and Google’s privacy standards.   Also, allow Shoppers to turn off background app refresh to protect their privacy during and after working their shift.  Allow location only while Shoppers are using the app. 

Source: Instacart Privacy Policy, Oct 2017

Instacart’s install directions.  Source:

Instacart Shopper’s app prompting Background App Refresh.  Source:  InstaShopper app

Physical injuries to Shoppers assigned to deliver commercial orders

Instacart recruits new shoppers with playful images of grocery shoppers delivering flowers and a single shopping bag to homes   However, Shoppers tell us that they are increasingly required to deliver commercial and batch orders to businesses that exceed Instacart’s published weight limit. Instacart requires that Shoppers have “the ability to lift 40 lb with or without assistance.” However, our checks reveal that Instacart offers items that exceed this weight.  In the order below, we could add 50 lb bags of sugar and shortening to Instacart.  The total delivery weight was 1,000 lb.  Instacart Shoppers are not trained or equipped to handle these heavy orders, nor are they allowed to decline such orders without repercussions. 

An Instacart Shopper shared another recent example where she was obligated to deliver 600 pounds of sugar to a business.  After she called Instacart to express concern over the weight, she was threatened by “Shopper Happiness” with deactivation if she didn’t complete the order.  Instacart is her primary source of income, so she complied.  This Shopper sustained a neck injury fulfilling the order.  However, since Instacart designates its full-service Shoppers as independent contractors, the company did not provide her with medical or other assistance as a result of her injury on the job.  These large bulk orders appear to be pervasive across Instacart – see many examples of the large orders Shoppers have received on Instacart. 

Recommended Changes:  Shoppers would like the option to decline heavy or commercial orders without repercussions or “reliability incidents.” For Shoppers that do accept large orders, provide adequate training and equipment such as weight belts, dollies, and delivery trucks to appropriately handle such freight.  Provide additional compensation for Shoppers that do deliver these bulk orders.

A 1,000 lb test delivery from Instacart.  Source:

Instacart’s aspirational portrayal of shoppers.  Source:  Instacart Press Kit

The reality of being an Instacart Shopper.  Source:  Instacart shopper

Let us know what you think about Instacart’s behavior.  Also, share your ideas to help Instacart improve at – a community of workers united to improve their workplace.  This blog represents the sole opinion of dumpling.