Instacart counted customer tips toward its pay floor — then apologized and reversed

In October 2018 Instacart launched a new shopper earnings structure built around a $10 floor 'inclusive of tips': when Instacart's payment plus the customer's tip came in under $10, Instacart topped up only the difference. The arithmetic surfaced in receipts workers shared online — one shopper received $0.80 from Instacart for over an hour of work because the customer had tipped $10 (Instacart later paid $10.80, of which just $0.80 was its own money); another got $7.26 including mileage for more than two hours.

Workers organized on Reddit and other forums, advocacy group Working Washington publicized the cases, and a class-action lawsuit alleged Instacart 'intentionally and maliciously misappropriated gratuities' to pay wages while claiming that 100 percent of customer tips went directly to shoppers — a representation that, the suit argued, led customers to believe tips came on top of wages.

On February 6, 2019, CEO Apoorva Mehta apologized in a blog post: 'the inclusion of tips as a part of this guarantee was misguided.' Tips became separate from Instacart's contribution on all batches, minimum batch pay rose from $3 to $7–10 for full-service orders and $5 for delivery-only (varying by region), and Instacart promised to retroactively make whole every shopper whose tips had been counted toward the minimum — 'it happened to one shopper and that's one time too many.'

Class action over wages and tips, a public CEO apology, retroactive payments, and a new Instacart-paid floor of $7–10 per batch.

Counting tips toward the floor meant customers' generosity lowered Instacart's own payout — a mechanism no tipper would have designed.

The marketing promise (100% of tips go to shoppers) was technically true and practically hollow, which is what the lawsuit seized on.

Calling the $0.80 batch an edge case failed when workers produced more receipts and organized around them.

A pay structure change shipped in October with no visible safety net for small batches, inviting the exact backlash that came.

Never let customer goodwill substitute for your own obligations: when the trick is discovered, you repay the money and the trust, with interest.

Instacart separated tips from its contribution, raised guaranteed batch floors to $7–10 (full service) and $5 (delivery-only) paid by the company, and began proactively reimbursing shoppers whose tips had been counted toward the old $10 minimum.