24 ms·

Instacart to cut 1,900 jobs, including its only union roles

245 points by Jerry2 6y ago

theinverseidea 6y ago
I always get a kick when businesses do exactly what the numbers said they would do and other people act surprised.
- jasonshaev 6y ago
  To be fair, there were only TEN unionized employees at Instacart who were let go (out of 1900 jobs cut). With such a small percentage of the workforce unionized, it's highly unlikely those employees enjoyed any additional bargaining power or job security that could result from having a significant fraction of the workforce unionized. With such a small fraction I don't think you can draw conclusions in either direction. [edit] In other words: these employees would have lost their job regardless of their union status [/edit]
  - deleted 6y ago
    [deleted]
  - theinverseidea 6y ago
    Oh I was referring to the unions and the other job losses as well -- I cant imagine the new federal minimum wage makes it easier to employ an army of low wage workers who can come and go at will.
  - moate 6y ago
    >>In other words: these employees would have lost their job regardless of their union status IDK that we can make that assumption. Instacart management has made themselves out to be anti-unionization (a common view by management in the US). If you're an anti-union manager, and you're about to make a massive, 2,000 person layoff declaration, you're going to make sure the unionized group of 10 people is on that list. Can't let that sort of thought spread to other locations, and this serves as a good example to those trying to organize in the future. It's easy to avoid a NLRB loss if you bust the union as part of a larger layoff. The only thing that would have been telling is if they had announced a huge layoff and NOT taken out the union shop.
    - jasonshaev 6y ago
      You're right -- my last statement was a bit too much of a leap. In this case I wonder if it would have even mattered if a significant percentage of the workforce was unionized.
      - moate 6y ago
        It might have. Unions are political forces. You get a few thousand people calling and screaming at politicians and news outlets to create a negative stink about it, maybe the company looks at other ways to make themselves more financially healthy. I'm not saying it would, just that it could. That's a big part of the appeal of a union, having a group of people with diverse backgrounds and experiences able to bring those backgrounds to the table to help in fights against management.
  - tyingq 6y ago
    "In other words: these employees would have lost their job regardless of their union status" 10 unionized employees out of thousands isn't enough critical mass to count as a union for the things that matter. The power is in numbers.
    - ardy42 6y ago
      > 10 unionized employees out of thousands isn't enough critical mass to count as a union for the things that matter. The power is in numbers. That may be so, but laying off those 10 could be a strategy to kill the union in the crib by keeping the number from ever getting to the thousands. Employees faced with future unionization votes may vote against the union because they're afraid management will find a way to lay them all off if they vote for it, before they're strong enough to resist.
    - jasonshaev 6y ago
      I agree (hence my original statement: "With such a small percentage of the workforce unionized, it's highly unlikely those employees enjoyed any additional bargaining power or job security that could result from having a significant fraction of the workforce unionized. With such a small fraction I don't think you can draw conclusions in either direction.") However I then, uh, went on to draw a conclusion anyway in contradiction of my own statement saying we shouldn't draw conclusions because of the sample size. Methinks it's time for more coffee :).
deleted 6y ago
[deleted]
fermienrico 6y ago
I always hear progressive views about unionization which I agree with and they make sense. What are some of the disadvantages of unions? Edit: Before you hit that downvote button, can we not have a balanced discussion about pros and cons of Unionization? I am a progressive and a Democrat but I want to know both sides of the coin. For people saying this question is of bad faith, I am not really asking "What are the advantages of murder?" here, Unionization is a complex topic and it would be interesting to understand that it's not just companies exploiting employees, but there is a lot more to it than that.
- draw_down 6y ago
  Topic is Instacart layoffs not union debate
- jawns 6y ago
  Unions can be tremendously helpful when there is a wide disparity in bargaining power between employer and employee. In the late 19th and early 20th century, labor unions made tremendous strides in improving worker conditions and pay/benefits. Among the criticisms I've heard ... Sometimes market forces can get you adequate conditions and pay/benefits without the need for collective bargaining. For instance, software engineers tend to be well paid even without needing to unionize. So if you don't feel that you need a union, but you're forced to be in a union (and pay dues) against your will -- as happens in many industries -- you may feel those dues are taking money out of your pocket unnecessarily. In fact, the union leadership might actually be making decisions that benefit them or the members collectively but that don't benefit you individually.
  - bombcar 6y ago
    The union workers I know generally are annoyed to hate the union, both for the dues unceremoniously rippéd and for "protecting lazy co-workers". It's usually held to grumbling but they always have an eye out to grab a higher-paying non-union job if one shows up.
    - itsoktocry 6y ago
sct202 6y ago
tldr; Instacart is shifting work to the grocery store's employees to pick and pack grocery orders instead of having Instacart employees do it. FWIW, the union referenced is at a Marianos, and Marianos (and all Kroger owned groceries) are unionized already. So the work is shifting from one union to another union.
dfxm12 6y ago
Instacart Inc. is cutting about 1,900 employees’ jobs ... as the company seeks to boost its ranks of contract workers. It's important to note that "employees", in the US, are entitled to benefits [0] that "contractors" aren't. As more and more employers try to glorify the gig economy or fire employees in favor of contractors, it is more important than ever to make sure that critical benefits, especially affordable health coverage, are uncoupled from employment status. 0 - https://www.investopedia.com/articles/personal-finance/120914/8-federal-laws-protect-employees.asp https://www.investopedia.com/articles/personal-finance/12091...
- s3r3nity 6y ago
  I'm not sure why the onus is on the business here, rather than the individual: when deciding to be a "contractor" vs. "employee," I should & do take those risks and decisions into account, and weigh the trade-offs. You want 401k match and other nice benefits? Then become a full-time employee somewhere. You like more flexibility and independence, given the trade-offs? Then go with independent contracting.
  - true_religion 6y ago
    Because they don’t give you that flexibility. They require a high number of working hours to stay in the system, and require you to work peak hours anyways. No one really gains as a contractor working 39 hours a week without benefits.
  - Finnucane 6y ago
    The whole point of the sharecropper economy is to make it so a lot of people don't really have much choice.
  - pfooti 6y ago
    Because, given the opportunity and no regulation, companies will always push to make all employees contractors. Independent contractors represent a significantly lower liability on the balance sheets. Except that those lower liabilities are just externalizing the cost of employment to other systems (health and unemployment insurance, etc). If we don't regulate corporations, they will just race to the bottom in how they treat labor.
HarryHirsch 6y ago
Dumb question: is this in any way related to California Proposition 22?
- bbatsell 6y ago
  It is entirely due to Prop 22.
- s3r3nity 6y ago
  The article loosely hints at this context, but provides no evidence either way. Looking at Instacart revenue / margin numbers, they hit profitability _for the first time ever_ in April 2020 alongside the COVID pandemic. Further, margins are CRAZY THIN - meaning maintaining profitability is really difficult in an environment of increasing competition from Uber / Google, among others. (Ex: Uber bought Postmates, as the latter had similar margin difficulties.) My read is that this type of move was planned as an option for Instacart for a while, and Prop 22 maybe pushed up the timeline slightly. EDIT: not sure why I'm getting downvoted. I know the article tries to build this narrative as much as possible (without even mentioning Prop 22) but then doesn't even provide the financial details that show that Instacart has really tight margins - and if they're trying to IPO, at this rate they're going to stumble there.
  - huac 6y ago
    The article doesnt mention Prop 22 by name but the last paragraph is very clearly about Prop 22 > San Francisco-based Instacart and other gig companies including Uber Technologies Inc. and Lyft Inc. last year bankrolled a successful $200 million campaign to pass a California ballot measure exempting them from a state law declaring workers were employees if they did work in the “usual course” of their bosses’ business. Emboldened by that victory, the companies are pushing for similar changes elsewhere that would make it easier to claim workers are contractors.
    - s3r3nity 6y ago
      Completely agree, but I would argue that the article is a bit deceptive in that it's trying to build that context without any evidence or data that this is the driver for Instacart's move. correlation <> causation, etc. etc.
hising 6y ago
Read about them earlier today, they are getting ready for IPO. Can't help to think news like this has to do with building a better offer. The market likes these kind of news.
- halfdan 6y ago
  Look, we're profitable after firing half our workforce!!!
- dfxm12 6y ago
  The market likes these kind of news. When someone points to a rising stock market as possible evidence of a strong economy, just keep in mind that the market likes it when a company fires a ton of employees.
  - vmception 6y ago
    Jobs for the sake of bragging about how many people are employed is just as useless. Do what helps you make revenue, don't do what doesn't. I am a fan of one-off utility of people, I think of everything like a commissioned trip to a new continent. Take risk, get the gold, return, distribute payments, disband. Reach out again if there is a similar project. Keeping people around for no reason is folly and merely trendy.
    - vkou 6y ago
      > Jobs for the sake of bragging about how many people are employed is just as useless. They aren't useless in a society where the only means of survival is having a job. In fact, in a society where the only means of survival is having a job, part of the social contract is 'everyone should be able to get a job'. Otherwise, you may get to meet a lot of angry, desperate people, with nothing to lose.
      - vmception 6y ago
        Yeah we should fix that and is a separate issue. Vilifying a corporation that suddenly remembered they have a lot of random people don’t help generate revenue is odd. Similarly, assuming distress of a corporation when they remember to cut its workforce is just as odd. Its probably an accurate assumption, it just doesn't have to be and it would make more sense for corporations to be more nimble.
rtx 6y ago
Imagine if these unions start a competitor, it would be glorious and we can call it a co-operative.
- tehjoker 6y ago
  The main barrier I imagine is access to capital.
  - pfooti 6y ago
    that, and the instacart business model is only feasible with large VC infusions (so yeah access to capital) and via externalizing other costs of doing business (living wage, insurance, benefits) to the social safety net instead of providing such services to their labor.
    - amelius 6y ago
      It really sucks how VC money can cause so much financial insecurity for the little guy.
- heavyset_go 6y ago
  Good luck raising money to start a co-op.
jiofih 6y ago
[paywall]
xrd 6y ago
From what I understand from these comments, it sounds like Instacart is going to leverage labor at union staffed stores, like Kroger, to fulfill on its business opportunities. This seems like a clever form of arbitrage, or shall we call it, disruption? Is this the new frontier (or perhaps I'm just late to the game in understanding it) where larger online businesses (like Amazon) shift away from full time employment (with the costs associated with it) and let some other "local" or "brick and mortar" legacy businesses try to keep those employees with living wages and healthcare employed while those same "frenemies" (purchasing from them, but also competing with them) avoid those costs? I spoke to an accountant friend the other day who works for a local independent grocery store. They are really trying to keep their low wage workers on payroll, despite having revenues cut in half because of COVID. Everyone is shopping at Amazon+WholeFoods. If those workers lose their jobs, will they be homeless? I don't think consumers care or think about them, even though they might be their neighbors.
- windthrown 6y ago
  Keep in mind that after Prop 22 in California, some grocery chains (Vons, Albertsons) are replacing their employees with contractors: https://www.washingtonpost.com/business/2021/01/06/vons-albertsons-doordash-prop-22-layoffs/ https://www.washingtonpost.com/business/2021/01/06/vons-albe...
  - djrogers 6y ago
    Slight clarification - they are replacing their delivery employees with contractors...
    - amelius 6y ago
      Does that make any difference, unless the contractor is a large postal service that can speak up for itself?
- darkwizard42 6y ago
  Less arbitrage and more benefit to Instacart/the stores. Who probably knows a store better: random Instacart shopper or employee of the store? In the end, Instacart gets faster fulfillment and more accurate fulfillment for a price (whatever cut Kroger etc. take to do this). The stores get direct access to the order data and can then stock their stores better, capture the extra demand, and keep their employees engaged in revenue generating work (Instacart probably pays the store for this service of in-house shopping)
darkwizard42 6y ago
It seems pretty clear the motivation here is that Instacart doesn't need/can't afford the workforce and is instead probably finding that store employees are able to fill the orders via some partnership with the big chains for a cut that is more margin efficient than hiring their own "shoppers" to do so. Also just generally this makes sense... a Safeway/Shoprite/Whole Foods employee can probably navigate and fill a cart faster than a random shopper who might not be as familiar with every store's layout. For Instacart this is a huge win, faster fulfillment and probably even higher accuracy of fulfilled orders. For chains this is also a great win since they can utilize their employees more, make a little extra off Instacart, and potentially even optimize their store layouts better to cater to this new style of shopping. Also the headline is quite misleading given that there are only TEN union workers... so "all of its union roles" is misrepresenting the whole thing a bit.
- notsureaboutpg 6y ago
  The stealth win for the chains is that they will eventually nail the logistics of delivery and undercut Instacart's prices (which are wayyyy too high) and win the grocery delivery game
thismodernlife 6y ago
I don’t know much about Instacart as I live in Scotland but what they have done (Andrew Kane in particular) for the Ruby on Rails community through their open source is incredible. Kudos.
- jherdman 6y ago
  I wasn't aware they had done anything. Do you have an article on the matter?
  - thismodernlife 6y ago
    Check out their GitHub https://github.com/instacart https://github.com/instacart
- hiharryhere 6y ago
  Agree, Searchkick is brilliant
aklemm 6y ago
While I like and use Instacart, the model is wrong. I am paying too much for a slightly unreliable service and the employees aren't getting paid enough. The stores should provide the shoppers, delivery should be a separate service, and the cost should be about a $15-30 premium for a large grocery order (15+ minutes of order picking + delivery similar to a cab ride). That leaves the ordering platform, which might be a nice niche for Instacart to provide across multiple stores. Anyway, this has been a tough business all the way back to Webvan!
- boringg 6y ago
  Agree with this. The premise is nice but the execution and shadiness of raising prices so you don't really know how much you are paying for the instacart premium feels bad. You'd think this business would be going through the roof during the pandemic. If it can't work now, how is it ever going to work?
  - Bud 6y ago
    Well, just to cite one factor, it might work better under conditions where we aren't literally putting people's lives at risk by asking them to shop instead of us shopping for ourselves. In other words, conditions in which the pool of labor is less heinously and obviously exploited and better workers are easier to recruit for the job in question.
    - boringg 6y ago
      While I agree with you about that, I don't think most people have that logic when they consider ordering on insta-cart. If demand for insta-cart is dropping I would wager that doesn't bode well for its use in the future regardless of the level of talent/exploitation of the employees. In other words, if all of a sudden insta-cart was much more generous with their employees and managed to hire better talent, that wouldn't likely translate into more demand for their product. Yes places like Trader Joes treat their workers well (and build brand around that) - the lions share of demand revolves around on merits/price. I wish it was more along your factor but sense that it isn't a factor with an order of magnitude change associated with it.
kirillzubovsky 6y ago
At the end of the day, the people will get hired back by somebody who needs their groceries delivered. Meanwhile, this makes Insta more of a software company, and lets the stores deal with hiring. The market is going to love this because it will de-risk Instacart. Grocery stores should love this because they will be able to increase utilization of their employees. And of course employees, despite the popular narrative, will actually gain more power because they would have more localized work, and less competition. It's a win-win-win.
breck 6y ago
I would love to live in a world where we do away with the term "employee". Where people were just part of a team. Where your boss didn't have to be concerned with which doctor you went to. Where you could work for $5 an hour for a cause you believed in, and not have to worry about making ends meet. Some day we need to #RefactorAmerica.
- orthecreedence 6y ago
  Sounds like the free association of producers: https://en.wikipedia.org/wiki/Free_association_(Marxism_and_anarchism) https://en.wikipedia.org/wiki/Free_association_(Marxism_and_....
rootsudo 6y ago
Wonder why they don't partner with Uber/Lyft so the logistics are always there, on demand... since the radius of delivery is always near, I can't see it being that pricier then having to have a shopper and driver. But also, hmm, delivery is so hard here.
syntaxing 6y ago
I wish Costco would launch it's own service rather than use Instacart. Instacart has been a hit or miss but my Amazon Fresh/Whole foods delivery have been significantly more consistent. Like other said, it kinda sucks to pay more for the groceries, the fees, the tips, and in the end you get mediocre service.
- refurb 6y ago
  Costco does delivery through their website. But it’s not same day.
justinzollars 6y ago
This is a very dishonest headline 10/1900 were union.
satya71 6y ago
I don’t understand why there aren’t ghost groceries, similar to ghost kitchens or warehouses. Delivery is now large enough that having someone walk around a large store optimized for display, one order at a time, is super inefficient. Just have warehouses/stores optimized for delivery and batch the orders. Boost productivity and start paying people decent already.
- cma 6y ago
  There's a startup in the UK with something optimized like that: https://youtu.be/4DKrcpa8Z_E https://youtu.be/4DKrcpa8Z_E
  - satya71 6y ago
    Very cool video! Ocado is hardly a startup though. It’s a pretty big public company now.
    - nicoburns 6y ago
      Indeed: founded in 2000. It's worth noting that off the back of Ocado's success, all major UK supermarkets also offer online delivery. And my understanding is that this is mostly serviced directly from stockrooms rather than going via store shelves (albeit individual store stockrooms).
      - fy20 6y ago
        Ocado started deliveries in 2002 selling products from Waitrose shelves, but it was only in major cities (maybe just London?). Around the same time Tesco (I can't find exact dates, but when I started working there in 2004 it had already been around for a while) launched their competing service, however they did so across the whole country (at any store big enough and with enough parking space to support it).
    - scrollaway 6y ago
      And i haven't lived in the uk in a while but Ocado is still doing all the deliveries itself I believe, which restricts it in terms of coverage and availability slots, doesn't it? A British friend was complaining that during lockdown there were never any available slots.
lostmsu 6y ago
I am not surprised considering major grocery stores in Greater Seattle Area all have their own curbside pickup/delivery services.
snarkypixel 6y ago
Both with Dropbox and Instacart, their business model didn't make sense to me. But they still became billion dollar companies that will go bankrupt in a few years after making many people really wealthy. I guess it's a different way to play the game
mpentecost 6y ago
Just last week I made a large Instacart order to Costco, and the shopper was nice enough to leave the Costco receipt in one of the bags so I could compare. Instacart Receipt: $340 + $35 tip --- $375 Costco Receipt: $245 I cancelled my Instacart premium membership after that and will not use them again. I just can't justify a $90+ upcharge before tip. IMO Instacart took way too much cut for themselves. I have been sticking to my local grocery who uses their own in-house shoppers. I miss some of the items I am used to from Costco but at least won't be paying 30%+ premiums.
- SN76477 6y ago
  It is likely the shopper was only paid $20 for their efforts. When times were hard I did instacart and it was a struggle to pay my modest bills even when working 55 hours a week.
- gbronner 6y ago
  It takes a while to shop at Costco, load everything carefully into your car, drive it to you, and deliver it, not to mention provision for breakage, overhead for the car, etc.
MrDresden 6y ago
I genuinely feel for the people laid off. With that said, wont Instacart, and other similar business models that rely on grocery stores and human labour to fulfill the orders, simply start becoming obsolete in the coming few years as robotic fulfillment centers[0] start popping up all over the place? Perhaps these centers will not service the most rural of places, but then again I imagine these services (i.e Instacart) are mostly used in more densely populated areas anyway. https://www.youtube.com/watch?v=4DKrcpa8Z_E https://www.youtube.com/watch?v=4DKrcpa8Z_E
PointyFluff 6y ago
Instacart is dropping these positions because they are trying to trim down and look like a good buy. Instacart is Homegrocer 2.0; and by that I mean an abysmally managed top-only company that only takes and does no re-investment. From what I can see their business model is, minimal investment, maximum unsustainable sort-term profit, and sell or go bankrupt while floating upon pool-in-yacht. Their "customer care" staff are assigned multiple shoppers and customers to deal with simultaneously, and they are out of country NOT trained in English or US culture, as such they are clearly unable to communicate effectively; queue lines in the thousands. I spoke with one once who told me they were NOT ALLOWED to communicate the fact they were dealing with multiple customers, with people just constantly spamming them because they could not keep up; a system which will obviously bottle neck at any load increase. Oh, and, according to her the entire system is "managed" by "If" statement masquerading as an "AI HR" software. Once the vaccine comes out in full, Instacart will most likely be no-more or sold off.

245 points by Jerry2 6y ago

theinverseidea 6y ago

I always get a kick when businesses do exactly what the numbers said they would do and other people act surprised.

jasonshaev 6y ago
To be fair, there were only TEN unionized employees at Instacart who were let go (out of 1900 jobs cut). With such a small percentage of the workforce unionized, it's highly unlikely those employees enjoyed any additional bargaining power or job security that could result from having a significant fraction of the workforce unionized. With such a small fraction I don't think you can draw conclusions in either direction. [edit] In other words: these employees would have lost their job regardless of their union status [/edit]
- deleted 6y ago
  [deleted]
- theinverseidea 6y ago
  Oh I was referring to the unions and the other job losses as well -- I cant imagine the new federal minimum wage makes it easier to employ an army of low wage workers who can come and go at will.
- moate 6y ago
  >>In other words: these employees would have lost their job regardless of their union status IDK that we can make that assumption. Instacart management has made themselves out to be anti-unionization (a common view by management in the US). If you're an anti-union manager, and you're about to make a massive, 2,000 person layoff declaration, you're going to make sure the unionized group of 10 people is on that list. Can't let that sort of thought spread to other locations, and this serves as a good example to those trying to organize in the future. It's easy to avoid a NLRB loss if you bust the union as part of a larger layoff. The only thing that would have been telling is if they had announced a huge layoff and NOT taken out the union shop.
  - jasonshaev 6y ago
    You're right -- my last statement was a bit too much of a leap. In this case I wonder if it would have even mattered if a significant percentage of the workforce was unionized.
    - moate 6y ago
      It might have. Unions are political forces. You get a few thousand people calling and screaming at politicians and news outlets to create a negative stink about it, maybe the company looks at other ways to make themselves more financially healthy. I'm not saying it would, just that it could. That's a big part of the appeal of a union, having a group of people with diverse backgrounds and experiences able to bring those backgrounds to the table to help in fights against management.
- tyingq 6y ago
  "In other words: these employees would have lost their job regardless of their union status" 10 unionized employees out of thousands isn't enough critical mass to count as a union for the things that matter. The power is in numbers.
  - ardy42 6y ago
    > 10 unionized employees out of thousands isn't enough critical mass to count as a union for the things that matter. The power is in numbers. That may be so, but laying off those 10 could be a strategy to kill the union in the crib by keeping the number from ever getting to the thousands. Employees faced with future unionization votes may vote against the union because they're afraid management will find a way to lay them all off if they vote for it, before they're strong enough to resist.
  - jasonshaev 6y ago
    I agree (hence my original statement: "With such a small percentage of the workforce unionized, it's highly unlikely those employees enjoyed any additional bargaining power or job security that could result from having a significant fraction of the workforce unionized. With such a small fraction I don't think you can draw conclusions in either direction.") However I then, uh, went on to draw a conclusion anyway in contradiction of my own statement saying we shouldn't draw conclusions because of the sample size. Methinks it's time for more coffee :).

deleted 6y ago

[deleted]

fermienrico 6y ago

I always hear progressive views about unionization which I agree with and they make sense. What are some of the disadvantages of unions? Edit: Before you hit that downvote button, can we not have a balanced discussion about pros and cons of Unionization? I am a progressive and a Democrat but I want to know both sides of the coin. For people saying this question is of bad faith, I am not really asking "What are the advantages of murder?" here, Unionization is a complex topic and it would be interesting to understand that it's not just companies exploiting employees, but there is a lot more to it than that.

draw_down 6y ago
Topic is Instacart layoffs not union debate
jawns 6y ago
Unions can be tremendously helpful when there is a wide disparity in bargaining power between employer and employee. In the late 19th and early 20th century, labor unions made tremendous strides in improving worker conditions and pay/benefits. Among the criticisms I've heard ... Sometimes market forces can get you adequate conditions and pay/benefits without the need for collective bargaining. For instance, software engineers tend to be well paid even without needing to unionize. So if you don't feel that you need a union, but you're forced to be in a union (and pay dues) against your will -- as happens in many industries -- you may feel those dues are taking money out of your pocket unnecessarily. In fact, the union leadership might actually be making decisions that benefit them or the members collectively but that don't benefit you individually.
- bombcar 6y ago
  The union workers I know generally are annoyed to hate the union, both for the dues unceremoniously rippéd and for "protecting lazy co-workers". It's usually held to grumbling but they always have an eye out to grab a higher-paying non-union job if one shows up.
  - itsoktocry 6y ago

sct202 6y ago

tldr; Instacart is shifting work to the grocery store's employees to pick and pack grocery orders instead of having Instacart employees do it. FWIW, the union referenced is at a Marianos, and Marianos (and all Kroger owned groceries) are unionized already. So the work is shifting from one union to another union.

dfxm12 6y ago

Instacart Inc. is cutting about 1,900 employees’ jobs ... as the company seeks to boost its ranks of contract workers. It's important to note that "employees", in the US, are entitled to benefits [0] that "contractors" aren't. As more and more employers try to glorify the gig economy or fire employees in favor of contractors, it is more important than ever to make sure that critical benefits, especially affordable health coverage, are uncoupled from employment status. 0 - https://www.investopedia.com/articles/personal-finance/120914/8-federal-laws-protect-employees.asp https://www.investopedia.com/articles/personal-finance/12091...

s3r3nity 6y ago
I'm not sure why the onus is on the business here, rather than the individual: when deciding to be a "contractor" vs. "employee," I should & do take those risks and decisions into account, and weigh the trade-offs. You want 401k match and other nice benefits? Then become a full-time employee somewhere. You like more flexibility and independence, given the trade-offs? Then go with independent contracting.
- true_religion 6y ago
  Because they don’t give you that flexibility. They require a high number of working hours to stay in the system, and require you to work peak hours anyways. No one really gains as a contractor working 39 hours a week without benefits.
- Finnucane 6y ago
  The whole point of the sharecropper economy is to make it so a lot of people don't really have much choice.
- pfooti 6y ago
  Because, given the opportunity and no regulation, companies will always push to make all employees contractors. Independent contractors represent a significantly lower liability on the balance sheets. Except that those lower liabilities are just externalizing the cost of employment to other systems (health and unemployment insurance, etc). If we don't regulate corporations, they will just race to the bottom in how they treat labor.

HarryHirsch 6y ago

Dumb question: is this in any way related to California Proposition 22?

bbatsell 6y ago
It is entirely due to Prop 22.
s3r3nity 6y ago
The article loosely hints at this context, but provides no evidence either way. Looking at Instacart revenue / margin numbers, they hit profitability _for the first time ever_ in April 2020 alongside the COVID pandemic. Further, margins are CRAZY THIN - meaning maintaining profitability is really difficult in an environment of increasing competition from Uber / Google, among others. (Ex: Uber bought Postmates, as the latter had similar margin difficulties.) My read is that this type of move was planned as an option for Instacart for a while, and Prop 22 maybe pushed up the timeline slightly. EDIT: not sure why I'm getting downvoted. I know the article tries to build this narrative as much as possible (without even mentioning Prop 22) but then doesn't even provide the financial details that show that Instacart has really tight margins - and if they're trying to IPO, at this rate they're going to stumble there.
- huac 6y ago
  The article doesnt mention Prop 22 by name but the last paragraph is very clearly about Prop 22 > San Francisco-based Instacart and other gig companies including Uber Technologies Inc. and Lyft Inc. last year bankrolled a successful $200 million campaign to pass a California ballot measure exempting them from a state law declaring workers were employees if they did work in the “usual course” of their bosses’ business. Emboldened by that victory, the companies are pushing for similar changes elsewhere that would make it easier to claim workers are contractors.
  - s3r3nity 6y ago
    Completely agree, but I would argue that the article is a bit deceptive in that it's trying to build that context without any evidence or data that this is the driver for Instacart's move. correlation <> causation, etc. etc.

hising 6y ago

Read about them earlier today, they are getting ready for IPO. Can't help to think news like this has to do with building a better offer. The market likes these kind of news.

halfdan 6y ago
Look, we're profitable after firing half our workforce!!!
dfxm12 6y ago
The market likes these kind of news. When someone points to a rising stock market as possible evidence of a strong economy, just keep in mind that the market likes it when a company fires a ton of employees.
- vmception 6y ago
  Jobs for the sake of bragging about how many people are employed is just as useless. Do what helps you make revenue, don't do what doesn't. I am a fan of one-off utility of people, I think of everything like a commissioned trip to a new continent. Take risk, get the gold, return, distribute payments, disband. Reach out again if there is a similar project. Keeping people around for no reason is folly and merely trendy.
  - vkou 6y ago
    > Jobs for the sake of bragging about how many people are employed is just as useless. They aren't useless in a society where the only means of survival is having a job. In fact, in a society where the only means of survival is having a job, part of the social contract is 'everyone should be able to get a job'. Otherwise, you may get to meet a lot of angry, desperate people, with nothing to lose.
    - vmception 6y ago
      Yeah we should fix that and is a separate issue. Vilifying a corporation that suddenly remembered they have a lot of random people don’t help generate revenue is odd. Similarly, assuming distress of a corporation when they remember to cut its workforce is just as odd. Its probably an accurate assumption, it just doesn't have to be and it would make more sense for corporations to be more nimble.

rtx 6y ago

Imagine if these unions start a competitor, it would be glorious and we can call it a co-operative.

tehjoker 6y ago
The main barrier I imagine is access to capital.
- pfooti 6y ago
  that, and the instacart business model is only feasible with large VC infusions (so yeah access to capital) and via externalizing other costs of doing business (living wage, insurance, benefits) to the social safety net instead of providing such services to their labor.
  - amelius 6y ago
    It really sucks how VC money can cause so much financial insecurity for the little guy.
heavyset_go 6y ago
Good luck raising money to start a co-op.

jiofih 6y ago

[paywall]

xrd 6y ago

From what I understand from these comments, it sounds like Instacart is going to leverage labor at union staffed stores, like Kroger, to fulfill on its business opportunities. This seems like a clever form of arbitrage, or shall we call it, disruption? Is this the new frontier (or perhaps I'm just late to the game in understanding it) where larger online businesses (like Amazon) shift away from full time employment (with the costs associated with it) and let some other "local" or "brick and mortar" legacy businesses try to keep those employees with living wages and healthcare employed while those same "frenemies" (purchasing from them, but also competing with them) avoid those costs? I spoke to an accountant friend the other day who works for a local independent grocery store. They are really trying to keep their low wage workers on payroll, despite having revenues cut in half because of COVID. Everyone is shopping at Amazon+WholeFoods. If those workers lose their jobs, will they be homeless? I don't think consumers care or think about them, even though they might be their neighbors.

windthrown 6y ago
Keep in mind that after Prop 22 in California, some grocery chains (Vons, Albertsons) are replacing their employees with contractors: https://www.washingtonpost.com/business/2021/01/06/vons-albertsons-doordash-prop-22-layoffs/ https://www.washingtonpost.com/business/2021/01/06/vons-albe...
- djrogers 6y ago
  Slight clarification - they are replacing their delivery employees with contractors...
  - amelius 6y ago
    Does that make any difference, unless the contractor is a large postal service that can speak up for itself?
darkwizard42 6y ago
Less arbitrage and more benefit to Instacart/the stores. Who probably knows a store better: random Instacart shopper or employee of the store? In the end, Instacart gets faster fulfillment and more accurate fulfillment for a price (whatever cut Kroger etc. take to do this). The stores get direct access to the order data and can then stock their stores better, capture the extra demand, and keep their employees engaged in revenue generating work (Instacart probably pays the store for this service of in-house shopping)

darkwizard42 6y ago

It seems pretty clear the motivation here is that Instacart doesn't need/can't afford the workforce and is instead probably finding that store employees are able to fill the orders via some partnership with the big chains for a cut that is more margin efficient than hiring their own "shoppers" to do so. Also just generally this makes sense... a Safeway/Shoprite/Whole Foods employee can probably navigate and fill a cart faster than a random shopper who might not be as familiar with every store's layout. For Instacart this is a huge win, faster fulfillment and probably even higher accuracy of fulfilled orders. For chains this is also a great win since they can utilize their employees more, make a little extra off Instacart, and potentially even optimize their store layouts better to cater to this new style of shopping. Also the headline is quite misleading given that there are only TEN union workers... so "all of its union roles" is misrepresenting the whole thing a bit.

notsureaboutpg 6y ago
The stealth win for the chains is that they will eventually nail the logistics of delivery and undercut Instacart's prices (which are wayyyy too high) and win the grocery delivery game

thismodernlife 6y ago

I don’t know much about Instacart as I live in Scotland but what they have done (Andrew Kane in particular) for the Ruby on Rails community through their open source is incredible. Kudos.

jherdman 6y ago
I wasn't aware they had done anything. Do you have an article on the matter?
- thismodernlife 6y ago
  Check out their GitHub https://github.com/instacart https://github.com/instacart
hiharryhere 6y ago
Agree, Searchkick is brilliant

aklemm 6y ago

While I like and use Instacart, the model is wrong. I am paying too much for a slightly unreliable service and the employees aren't getting paid enough. The stores should provide the shoppers, delivery should be a separate service, and the cost should be about a $15-30 premium for a large grocery order (15+ minutes of order picking + delivery similar to a cab ride). That leaves the ordering platform, which might be a nice niche for Instacart to provide across multiple stores. Anyway, this has been a tough business all the way back to Webvan!

boringg 6y ago
Agree with this. The premise is nice but the execution and shadiness of raising prices so you don't really know how much you are paying for the instacart premium feels bad. You'd think this business would be going through the roof during the pandemic. If it can't work now, how is it ever going to work?
- Bud 6y ago
  Well, just to cite one factor, it might work better under conditions where we aren't literally putting people's lives at risk by asking them to shop instead of us shopping for ourselves. In other words, conditions in which the pool of labor is less heinously and obviously exploited and better workers are easier to recruit for the job in question.
  - boringg 6y ago
    While I agree with you about that, I don't think most people have that logic when they consider ordering on insta-cart. If demand for insta-cart is dropping I would wager that doesn't bode well for its use in the future regardless of the level of talent/exploitation of the employees. In other words, if all of a sudden insta-cart was much more generous with their employees and managed to hire better talent, that wouldn't likely translate into more demand for their product. Yes places like Trader Joes treat their workers well (and build brand around that) - the lions share of demand revolves around on merits/price. I wish it was more along your factor but sense that it isn't a factor with an order of magnitude change associated with it.

kirillzubovsky 6y ago

At the end of the day, the people will get hired back by somebody who needs their groceries delivered. Meanwhile, this makes Insta more of a software company, and lets the stores deal with hiring. The market is going to love this because it will de-risk Instacart. Grocery stores should love this because they will be able to increase utilization of their employees. And of course employees, despite the popular narrative, will actually gain more power because they would have more localized work, and less competition. It's a win-win-win.

breck 6y ago

I would love to live in a world where we do away with the term "employee". Where people were just part of a team. Where your boss didn't have to be concerned with which doctor you went to. Where you could work for $5 an hour for a cause you believed in, and not have to worry about making ends meet. Some day we need to #RefactorAmerica.

orthecreedence 6y ago
Sounds like the free association of producers: https://en.wikipedia.org/wiki/Free_association_(Marxism_and_anarchism) https://en.wikipedia.org/wiki/Free_association_(Marxism_and_....

rootsudo 6y ago

Wonder why they don't partner with Uber/Lyft so the logistics are always there, on demand... since the radius of delivery is always near, I can't see it being that pricier then having to have a shopper and driver. But also, hmm, delivery is so hard here.

syntaxing 6y ago

I wish Costco would launch it's own service rather than use Instacart. Instacart has been a hit or miss but my Amazon Fresh/Whole foods delivery have been significantly more consistent. Like other said, it kinda sucks to pay more for the groceries, the fees, the tips, and in the end you get mediocre service.

refurb 6y ago
Costco does delivery through their website. But it’s not same day.

justinzollars 6y ago

This is a very dishonest headline 10/1900 were union.

satya71 6y ago

I don’t understand why there aren’t ghost groceries, similar to ghost kitchens or warehouses. Delivery is now large enough that having someone walk around a large store optimized for display, one order at a time, is super inefficient. Just have warehouses/stores optimized for delivery and batch the orders. Boost productivity and start paying people decent already.

cma 6y ago
There's a startup in the UK with something optimized like that: https://youtu.be/4DKrcpa8Z_E https://youtu.be/4DKrcpa8Z_E
- satya71 6y ago
  Very cool video! Ocado is hardly a startup though. It’s a pretty big public company now.
  - nicoburns 6y ago
    Indeed: founded in 2000. It's worth noting that off the back of Ocado's success, all major UK supermarkets also offer online delivery. And my understanding is that this is mostly serviced directly from stockrooms rather than going via store shelves (albeit individual store stockrooms).
    - fy20 6y ago
      Ocado started deliveries in 2002 selling products from Waitrose shelves, but it was only in major cities (maybe just London?). Around the same time Tesco (I can't find exact dates, but when I started working there in 2004 it had already been around for a while) launched their competing service, however they did so across the whole country (at any store big enough and with enough parking space to support it).
  - scrollaway 6y ago
    And i haven't lived in the uk in a while but Ocado is still doing all the deliveries itself I believe, which restricts it in terms of coverage and availability slots, doesn't it? A British friend was complaining that during lockdown there were never any available slots.

lostmsu 6y ago

I am not surprised considering major grocery stores in Greater Seattle Area all have their own curbside pickup/delivery services.

snarkypixel 6y ago

Both with Dropbox and Instacart, their business model didn't make sense to me. But they still became billion dollar companies that will go bankrupt in a few years after making many people really wealthy. I guess it's a different way to play the game

mpentecost 6y ago

Just last week I made a large Instacart order to Costco, and the shopper was nice enough to leave the Costco receipt in one of the bags so I could compare. Instacart Receipt: $340 + $35 tip --- $375 Costco Receipt: $245 I cancelled my Instacart premium membership after that and will not use them again. I just can't justify a $90+ upcharge before tip. IMO Instacart took way too much cut for themselves. I have been sticking to my local grocery who uses their own in-house shoppers. I miss some of the items I am used to from Costco but at least won't be paying 30%+ premiums.

SN76477 6y ago
It is likely the shopper was only paid $20 for their efforts. When times were hard I did instacart and it was a struggle to pay my modest bills even when working 55 hours a week.
gbronner 6y ago
It takes a while to shop at Costco, load everything carefully into your car, drive it to you, and deliver it, not to mention provision for breakage, overhead for the car, etc.

MrDresden 6y ago

I genuinely feel for the people laid off. With that said, wont Instacart, and other similar business models that rely on grocery stores and human labour to fulfill the orders, simply start becoming obsolete in the coming few years as robotic fulfillment centers[0] start popping up all over the place? Perhaps these centers will not service the most rural of places, but then again I imagine these services (i.e Instacart) are mostly used in more densely populated areas anyway. https://www.youtube.com/watch?v=4DKrcpa8Z_E https://www.youtube.com/watch?v=4DKrcpa8Z_E

PointyFluff 6y ago

Instacart is dropping these positions because they are trying to trim down and look like a good buy. Instacart is Homegrocer 2.0; and by that I mean an abysmally managed top-only company that only takes and does no re-investment. From what I can see their business model is, minimal investment, maximum unsustainable sort-term profit, and sell or go bankrupt while floating upon pool-in-yacht. Their "customer care" staff are assigned multiple shoppers and customers to deal with simultaneously, and they are out of country NOT trained in English or US culture, as such they are clearly unable to communicate effectively; queue lines in the thousands. I spoke with one once who told me they were NOT ALLOWED to communicate the fact they were dealing with multiple customers, with people just constantly spamming them because they could not keep up; a system which will obviously bottle neck at any load increase. Oh, and, according to her the entire system is "managed" by "If" statement masquerading as an "AI HR" software. Once the vaccine comes out in full, Instacart will most likely be no-more or sold off.