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The fight for $15 (per hour) comes to the gig economy

With take-home pay dropping as companies prune for IPOs, drivers for Instacart, DoorDash, and other services are uniting to demand a minimum wage.

The fight for $15 (per hour) comes to the gig economy
[Photo: Maarten van den Heuvel/Unsplash]

DoorDash, Grubhub, Instacart, Postmates, Uber Eats. Consumers are flooded with options to get meals, groceries, and virtually anything else delivered to their door, pronto. This boon in customer convenience had also been great for workers looking to make quick cash. Some even quit full-time jobs, lured by good pay and the freedom to work when and as often as they want.

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But the economics have gotten tighter as companies try to cut costs, many drivers tell Fast Company.

“I started on May 28 of last year, and in the beginning I was making a decent amount of money,” says Janssen Sartiga, an Instacart delivery driver who lives in Seattle. His earnings, and the ability to work whenever he chooses, allowed him to travel back and forth to the Philippines to visit his wife and daughter, and to move them to the U.S. in December.

His finances changed in November, Sartiga claims, with Instacart’s new algorithm to calculate pay. Per-job and weekly earnings statements from the Instacart driver’s app that he shared with Fast Company show a marked decline. Before November, Sartiga was averaging close to $20 an hour spent on assignments (less if you consider the time he was logged in but between gigs). In January, he was averaging well under $15 per hour, with more idle time.

Sartiga isn’t alone, says Sage Wilson, communications director at labor advocacy organization Working Washington, which launched a protest among Instacart gig workers, known as “shoppers,” on January 17. About 1,600 shoppers, from Washington State and beyond, signed a companion petition complaining of 30%-40% pay declines and demanding changes.

They won a significant victory just three weeks later, when Instacart rolled out new minimum payments for workers–a range of $5 to $10 per assignment, regardless of what the algorithm spits out. Nor do those fees use customer tips to subsidize wages–a practice that has enraged workers across the gig economy.

Far from appeasing workers, Instacart’s concessions have emboldened them to demand action on more complaints, such as Instacart bundling multiple customer orders into one batch in order to pay less. They are also reaching out to contractors at other delivery services, such as DoorDash and Amazon Flex to reform how workers get paid.

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The new fight for 15

On February 13, over 600 people joined a national teleconference, organized by Working Washington, to launch a campaign demanding a $15 per hour minimum wage throughout the gig economy. It’s a way to cut across the complex accounting of algorithms that pay based on distance, number of items, weight of items, time of day, and other factors–calculated differently by each delivery-app service.

“No matter how the pay works, there ought to be a bottom line they can’t go below,” Wilson told the meeting. “The details matter a lot, but we need a baseline that can apply to all apps–$15, plus expenses.”

That last point is no small detail. Amazon Flex, for instance, guarantees workers a minimum of $18 per hour. But workers furnish their own vehicles, paying for gas, maintenance, and depreciation. Instacart breaks out a per-mileage fee paid to drivers, but considers it part of pay. (As independent contractors, the drivers also pay higher payroll taxes and expenses like health insurance.)

Instacart, DoorDash, and most other services quote a fee per assignment, not per hour, requiring contractors to do a lot of math in their head to determine if a job is worth accepting. It seems that Working Washington’s proposal would only cover actual time on a delivery, not downtime. “Our thinking is that it would be $15 for time you spend with an active job, so from the time you accept the job until the time you drop off with the customer,” said an organizer for Working Washington who goes only by the name “Emily.”

Furthermore, workers will demand this pay irrespective of how much the customer tips. DoorDash, and more recently Instacart and Amazon, have come under fire from drivers for counting tips toward user pay.

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DoorDash, for instance, pays as little as $1 per assignment if the customer tip is enough to make up the difference of what its algorithm calculates a job is worth. Instacart always paid its algorithmically generated fee, called the batch payment, regardless of tip. But it would count tips towards a minimum fee of $10 guaranteed for all jobs. (A notorious 80-cent batch payment paired with a $10 customer tip exposed the company’s pay policy to harsh criticism, prompting the changes.)


Related: DoorDash reveals how much it relies on customer tips to pay its workers


And according to a Los Angeles Times investigation, Amazon counts tips towards its advertised pay of $18-$25 per hour.

“We want Instacart to stop stealing our tips,” driver and worker activist Matthew Telles told the group. “We want them to pay us a fair living wage for our efforts.”

“When a customer gives a tip, they are doing it because they want to give a little extra to the people doing the work,” said Wilson. “There is nobody who wants to be tipping a $7 billion corporation.”

Political momentum

Labor organizing has a left-leaning tilt, but the tipping issue could have a broader ideological appeal. Recently Fox News host Tucker Carlson took Instacart to task for applying pay towards worker compensation–and got in a shot at coastal elites. “The sanctimonious moguls who run the company shifted their payroll costs to the customer and shafted their own employees in the process,” said Carlson.

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Matthew Telles expressed gratitude to Carlson and made another argument that could speak to President’s Trump base–that working-class people should not be left behind by the tech economy. “Any engineer in Silicon Valley would tell us when [we’re] griping about low pay and potentially losing our jobs, they would tell us to learn to code,” said Telles. “That’s unacceptable, and it’s a disgusting rebuttal to our argument.”


Related: Delivery workers: Tip us in cash so companies have to pay us more


There is already plenty of support for the issue on the left. Congressman Ro Khanna of Silicon Valley has criticized Instacart (and appeared on Carlson’s show). And congresswoman Pramila Jayapal, who represents the Seattle area, attended the teleconference. “We know that workers should get paid enough to support themselves, and that customers should know where their money is going,” said Jayapal, who co-chairs the Congressional Progressive Caucus.

Jayapal served on the Seattle Mayor’s Income Inequality Advisory Committee, which helped craft what became the city’s 2015 law establishing a $15 minimum wage–a cause that Working Washington organized heavily to support.

That law, and other wage laws around the country, apply to employees, not independent contractors. Instacart’s stated goal is to ensure that compensation is “both competitive, and it’s a premium relative to minimum wage,” Instacart’s chief product officer David Hahn told me a few weeks ago. However, Instacart doesn’t acknowledge a legal obligation to do so. Nor is it–or any other app-based service–bound by laws in Washington, California, and several other states that prohibit using tips to subsidize pay.

Workers’ preferred tool right now is public pressure, but they are looking to the courts and legislation, too. Instacart shoppers in California recently filed a class-action lawsuit over the handling of tips and treatment of drivers, for instance.

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And the definition of “employee” is in flux. “There’s never a really clear answer until it’s been litigated,” employment attorney Daniel Johnson told me in a recent conversation about Instacart.

Even current pledges to meet minimum pay could put gig companies on the hook, legally. “If they’re concerned that they do have some sort of obligation to make sure their earnings meet a threshold, then that suggests that they know that the [employment] laws may apply to them,” said Johnson.

But activists aren’t waiting on the courts. “We need to make sure we have a way of holding [companies] accountable to the basic principle that the people doing the work deserve to be paid for doing the work,” said Wilson. “I think the way to do that is [by] winning new laws to secure basic rights and benefits for gig workers.”

That’s going to take more than a statewide protest. “Although we have Washington in our name, this effort quickly became a national one because there’s so much interest in organizing across the country,” said Working Washington’s executive director, Rachel Lauter.

It will have to be an industrywide movement, too. In a poll of attendees during the meeting, 57% of respondees said that they work on another gig app in addition to Instacart, and 21% know someone else who does. “We’re connecting now with the DoorDash drivers,” said Telles. “We’re hopefully going to reach out to the Grubhub drivers and the Amazon drivers. And we all have to stand together as one.”

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About the author

Sean Captain is a Bay Area technology, science, and policy journalist. Follow him on Twitter @seancaptain.

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