Stop Ironing Shirts: Instacart Shopper

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My FIRE plan has failed and now I’m shopping for Instacart!   Okay, that’s not entirely true, but I was given the idea to try Instacart from this post a few years back when Mr. Money Mustache decided to drive for Uber.   I’ve recently found myself with some extra time between being laid off from my side gig and the beaches being shut down (so much for working on my surfing this spring!).   Our portfolio also took quite a hit, so I thought about what are some options to make use of my newfound idle time and earn a little money while helping some folks. Enter Instacart:  I’m a fairly able bodied adult in good health and with some caution felt comfortable giving this a shot. Here is my experience:

My fancy badge

SIgnup Process:    As a shopper, the signup process took just under two weeks.  I went on to the app, spent about fifteen minutes giving them information, and completing a basic quiz.  I then had to wait for a background check to be completed and give them bank account information for direct deposits.  The company mailed me an Instacart Debit Card and a lanyard which showed up before the background check cleared. I checked with their online help twice because the background check was stuck as “estimated time to completion:  0 days”. A few attempts at their online chat and eventually I got the message that I was approved. Time to get to business.

The Shopper Experience:

The starting page of the Instacart App includes a button that says Start Shopping.   I hit that button and it shows me a batch. This could be one person order or multiple orders to be shopped at the same time with a map showing which store the order is for and the dropoff locations.  I can also see how much pay is involved, including the payment from Instacart and the customer’s tip. I get a very small preview of the items being purchased, but only in image format. I can’t see the customer’s name at this point.

Instacart will show me one batch at a time and after I decline a small number, it stops showing me batches.  I am not sure if this is either due to lack of orders or one of the strategies to get lower paying customer’s orders picked up.

Once I pick up an order, I have an hour to get to the store and start shopping.  There’s a chat window I can use to exchange messages with the customer while I shop.  This process is pretty straightforward similar to doing my own shopping from a list, while occasionally working through an item replacement or substitution.  Once I finish the order, I tap a button on the app then head to checkout and use the debit card issued by the company.

Once I leave the store, I start the delivery process and get the exact address for delivery.  I find the house and everyone has us leave the items at the door, some waving through the window and others waiting until we leave.  I complete the delivery process by either choosing to “handed to the customer” or “left at the door” (including a picture).   

We ran our first four orders without much regard to the pay or what was on the order to “just figure it out”.   That was about the right amount, by the time I got to the 5th order I was pretty proficient at scanning the items, the map, and the pay and figuring out if it was a good fit for me.  I ran a total of fifteen orders in the first week, putting in just under 15 hours worth of time.

Who Are The Customers?

This has been an interesting experience.  With everything going on in the world, around 50% of the deliveries have felt like I was doing something important.   There have been multiple elderly customers that were new users and thankful for not having to go out. I’ve delivered to parents that appeared stressed out handling kids at home seven days a week.  I’ve found two people toilet paper and even surprised one elderly gentleman with an order his daughter sent. That felt pretty good and offset the able bodied 40yr old man at the beach house talking to us from the porch and the 30 something real estate agent laying out in her front yard in a bikini who wanted sympathy by saying “this is my life now” as I hand delivered four pints of ice cream.  (as a side note, why would you be spending money right now as a real estate agent, your income is about to go to zero!).

What Are the Other Added Benefits?

Getting paid to go where I already go.   Our Aldi is just over 10 miles away and we’ve now twice supplemented our personal shopping trip through Instacart by taking an order at Aldi that needed to be delivered to our house.  It added around thirty minutes to our grocery trip but paid us roughly $20 each time. Not bad for a trip we would do anyways.

Seeing neighborhoods and real estate.  We’ve lived in this area for just under a year and want to eventually buy a home and a few rentals when prices come back down to reality.  We’ve already found a couple of nice pockets of properties that we didn’t know existed. This is an excellent way to get paid to learn a new city.

The temporary benefit:  My state is not under a mandatory stay at home order, but the local towns on the beach islands are prohibiting non-residents from entering.  This bummed us out because we go walking on the beach multiple times a week, it’s just part of our routine. Since signing up for Instacart, we’ve twice taken orders to the beach islands then enjoyed our walk.  Like the Aldi run, it’s a nice supplement for a trip we would make anyways with a massive benefit of legally getting us past a “residents only” checkpoint.  

Not a bad lunch break

How To Calculate Pay:

Instacart shoppers are paid in two ways:  A batch payment from Instacart and the gratuity from the customer.   The deposits are then made weekly to the bank account. There is an option to get the Instacart portion quicker for a small fee, but the customers have three days to adjust tips and the only option is to get paid weekly.   

The biggest expense with Instacart is using my own car for delivery.  The IRS allows for two options to account for this and I went with the option to deduct mileage expense from income, which is $0.575 per mile in 2020.   The second expense to account for is taxes. Instacart pays me as an independent contractor, so this means I am obligated to pay income taxes, state taxes, and the 15.3% self employment tax (both sides of FICA plus Medicare).   Here’s a rough outline of one week’s earnings:

Pay – One Week$325
Miles Driven130
Mileage Rate$0.58
Mileage Deduction$74.75
equals Income Subject to Taxes$250


Taxes
Self Employment15.30%
Federal12%
State7%
Total Tax Burden34.30%
Income Tax Expense$86

Net Income$164.41
Plus 1/2 Mileage Deduction$37.38
Total Take Home$201.79

In total, I earned $325 in gross earnings for the week.  I was not great at optimizing trips in the beginning and put 130 miles on my vehicle.   Once I apply the mileage deduction, I ended up with $250 in income subject to taxes.  Instacart doesn’t withhold any taxes, so I need to remember to put aside enough to cover taxes, which came out to $86 between Federal, State, and Self Employment Taxes. This left me with $164 in after-tax net income. Since I’m driving a fully depreciated vehicle, I estimate my actual cost per mile driven to be half of the mileage deduction and I added that back net income to come up with my actual take home pay.

Verdict:  $201.79 for around fourteen hours worth of work.  I averaged just over $14/hr in take home pay with full control of my schedule.

Question and Answers: I know some of my follows on twitter are curious about Instacart or users themselves, so I asked if there were any questions they wanted to see answered. Here were some of the questions I received

What is the substitution process?

From the shopper’s point of view, three things can happen when an item is missing:  

  1. The customer has a 2nd preference item entered, so I go look for that. 
  2. If I still can’t find it, I scan a suggested substitution.
  3. Customer inputs refund items if exact can’t be found.

Some of the grocery stores have been scarce on the 1st/2nd request, so I often send a message to the customers with a suggested replacement or ask if they have a preferred brand.  One of my recent orders was at a store that experienced a run on salt and vinegar potato chips and another way out of almost all tortillas. The app said refund, but I exchanged messages and sent them a picture of the only brand available and got an okay to replace it.

Only one person out of fifteen have required a call to approve substitutions and that customer actually just wanted to give more explicit delivery instructions.

Should I be mad if my shopper didn’t get organic?

My observation is Instacart goes above and beyond to specify when a customer wants organic products.  Organic is also more expensive and improves the percentage based tip, so the shopper should be more than motivated to buy organic.  In the situations where Organic was sold out but the same product was available in non-organic, I’ll message the customer.  

What is the average tip?  Can the shopper see the tip?

Yes, I can see the tip amount before accepting the order.  It is one of the major drivers of which jobs I take, along with proximity and number/type of items.  More than half my orders defaulted to the 5% tip. I can think of three orders that tipped higher (and I was excited to take), one that tipped more after the fact when I sent her a message saying they had toilet paper, and one tipped zero.  So far, nobody has modified the tip down after the fact. It appears the customers have three days to modify the tip.

What’s your highest and lowest tip?

My highest tip was a job I saw at 6pm, go to the store in my area and deliver it to a house close by for a $40 tip.  It was over a 100 item order, but it paid more than $50 for 1.5 hours work. The drive time and the tip made me take it immediately, even if the order was painful.   I’ve had two others over $20 for reasonably small orders. One tipped zero and Instacart combined that order with another into one batch to make sure it got fulfilled.

What is the average order size?

I’ve seen a wide range, but typically it’s more than $35 and the highest cost order I’ve picked up was $289.   The majority of our pickups have averaged between $90 and $130.

How do you handle the Toilet Paper shortage?

I’ve seen a few orders come up asking for four packages of hand sanitizer and two packages of toilet paper, it’s been a quick decline!  I’ve once found toilet paper when it was on an order and twice messaged customers to let them know the store has toilet paper and ask if they needed it.  My only upward adjusted tip happened from this! My only caution from the shopper point of view is that a 24 roll pack of toilet paper is 1) likely not at the store and 2) overstating the value of the trip because I’m not paid for an item I can’t pickup.

Are they closing the store allowing you to shop early / are you privy to easy pickings?

Not in my area.  I’ve heard of some improvements at Costco, but have yet to see an order from Costco to experience it.

Are you concerned about Covid-19?  Is Instacart taking any steps to protect me?

YES!  Our area had a fairly low caseload until the end of March and I’m not being a lot more selective on the orders I take.  Now we’ve got a nice little outbreak that’s been traced back to a local church that decided to hold service on March 15th.

There’s only so much of a risk vs. money exchange that I’m willing to make. I went to five stores on my peak day and don’t have any interest in doing that until things calm down in my area. I’m more inclined to take an order at the empty organic grocery store or somewhere I can get in and out of quickly like Aldi (no produce weighing!) compared to a full service order that sticks me in a tightly packed full price grocery store for 1.5 hours.   My preference would be to pick up $100 to $200/week in gross earnings a week right now in three to four trips. Instacart is not taking any real steps for protection, I think there’s a way I can get them to send me hand sanitizer, but there’s certainly an elevated risk right now.  

Did you participate in the strike?

“I’m not a scab or a union member” – One of the funnier comments from the Instacart Shopper Subreddit.  I did however decide that Monday would not be a “hustle day”. Instead I went running in the morning and picked up one small order that got me onto the beach island to enjoy a 76 degree sunny day.   I do think there are some valid complaints from the shoppers, but when I see something like this, I also ask: Who’s organizing this and what are they attempting to gain from it? My guess is unions are behind this in two ways:  1) The fight to change independent contractors to employees so they can unionize and pay dues or 2) Trying to disrupt Instacart’s business to make grocery stores use unionized employees to provide this service. Neither of those ideas appeal to me as the peak time / on demand shopper:  I’m just not interested in a traditional job and I’m not sure if people who do on demand shopping want full time employment.

Instacart released a statement late Monday that there 200,000 additional shoppers on the app this week compared to the prior week, so I don’t expect the unionization effort to make much progress.   

My opinion on what would help the shoppers:

  1. Directly campaign to the public and Instacart to change the perception of what an appropriate gratuity is.
  2. More transparency on Instacart’s app to let the market by shoppers declining low paying jobs.

What Can Instacart Improve On?

There was a lot of chatter about a worker strike on March 30th over hazard pay and requesting some more provided items.  I’ve also seen customers complain about not being able to get orders for a week and workers are upset about some of the strategies Instacart is using to minimize the expenses paid to shoppers.  My outsider’s view on all of this is Instacart is a company run by technology folks (and maybe not business/economics majors) and many of these issues can be easily solved. Here are some suggestions that Instacart can do to improve both the customer and shopper experience:

  • Give shoppers more time to review a batch before accepting it:   I only get thirty seconds to accept or decline a batch and have to squint to see what is in it.  There’s a lot of information to process in 30 seconds: What is the travel distance? What is the store? What items do they want? Are those items in stock based on my last trip to that store?  How much am I going to be paid for it? There’s only thirty seconds to make that decision and that’s abusive towards the shopper. 
  • Eliminate multiple orders inside a batch or give much more time to review a multi-order batch.  I’ve noticed that Instacart buries some of the $0 tipping customers inside a two or three delivery “batch”.   Early on before we got proficient in reviewing the orders, I got stuck accepting a zero tip order 3rd floor apartment order with toilet paper.  I even found the toilet paper and the person left no tip! I believe Instacart’s software tries to combine high tipping orders with low tipping orders to get a shopper to pick up the low tippers job.  A customer who inputs a zero dollar tip in this high demand/low supply environment just shouldn’t see their order picked up. That’s just not how a functioning market works. I believe this process intentionally distorts the willing buyer/willing seller part of the market by lumping orders together.
My guess is one appropriate tip got combined with two low paying orders
  • Change the default tip to at least 10%.  I don’t think there’s enough of a markup in the Instacart/grocery side to pay more for the batches, but Instacart can easily set the default tip up to 10% and create a little additional friction in the process of lowering the tip amount.  In my research, the default tip will be changed to 10% on March 30th, but only for new customers that sign up after this date. I ran an order on the 30th and received the default 5% (but it did get me to the beach!). 
  • Enforce a minimum gratuity.   The only shoppers who are taking a $0 tip order are brand new or desperate.  There’s also a dirty strategy known as “tip baiting”, where an instacart customer will offer a large tip to get their order picked up, only to go and modify it down to near zero after delivery.  I’ve not been personally “tip baited”, but will probably be upset if that happens.
  • Allow a rating system for the customer:  Only the shoppers are rated currently and it would be helpful if I could rate the customer like an Uber driver can rate a passenger; that would be helpful.  The best customers should see their orders picked up faster. The people who “tip bait” should receive 1 star ratings and get banned from the service in the same way Uber bans passengers.
  • Picture of the house!  I don’t understand why Instacart doesn’t ask its shoppers to upload a picture of their house.   The shopper already has the address, but a picture would be very helpful. I’ve had a number of subdivisions with more discrete addresses or odd blocks cause challenges in finding the right property.   This is an easy technology based solution that could help both sides and improve accuracy and timely delivery.

If you’re an Instacart customer, what can you do for shoppers?

  • Tip More!   I’ve seen replies over the Instacart worker strike story of “I’m cancelling my membership!”  Huh? There’s all this energy around shopper pay, but you as the customer are completely in control of this.  You pick how much your shopper makes. They’ll earn $7 plus a little bit for distance on your order, so tip your shopper like you would waitstaff.  If you have dinner at a high end restaurant, then you might tip $20 on a $100 bill. The waitstaff then gets a small hourly wage, have 3-5 tables going at once, and aren’t using their own vehicle for delivery.  If I spend an hour’s time dedicated to one person and use my own vehicle for Instacart’s base pay, it’ll come out to the same or less than the base wage that wait staff receive. A five percent gratuity just isn’t enough and I’d encourage you to either tip 15% to 25%.  If that’s too much, consider going and getting your own groceries.  
  • Be lenient on replacements and be responsive:  Consider setting your app to auto approve replacements.  Some stores are out of some items, it’s the reality of today.  Replacements already take time and hurt the shoppers speed rating.    Please be responsive, time is money and especially today I want to spend as little time in the store as I can.
  • Consider buying from Aldi.  It is a much quicker and easier shopping experience since there is no weighing of produce, entering weight on random meat items, or navigating a store with 80,000 SKUs.  There’s the added benefit that Aldi + Instacart costs are probably still cheaper than going to your local grocery store.
  • Rate your shopper.  These ratings matter and ⅓ of the people I’ve shopped for didn’t put any ratings in. 

Would This Be A Good Full Time Job?

I think it would be tough.   After the first few days, I can now average over $20 per order and nearly $20/hour in gross earnings, but I can only do this now because I’m selective about what I pick.   If I were trying to dot his full time, I would not have the luxury of choosing only the higher paying jobs (financial independence for the win!). Miles traveled can also quickly eat into a driver’s net income. I can see how someone trying to hustle 10 hours a day would get frustrated during the times where the only options are low paying orders.   

What About Part Time/Side Gig?  

Yes!  This isn’t difficult work and you just have to be on the lookout for the orders that have a reasonable level of gratuity or are in the path of somewhere you already need to go.   I can see Instacart being something I use when the weather isn’t looking good to head out fishing or to the beach and I want to make some extra spending money. I also fully expect to keep taking orders if they’re already in the direction I need to go.   I think I can put 10-12 hours a week into this during idle time or combining trips and reasonably earn $800 – $1,000 in gross income per month. This works out to around $600 in net income in a month and around $12/hour in after-tax take home pay without a ton of effort.  It’s not a bad way for this early retiree to earn a few extra dollars.

Wrapping Up:

The most interesting thing about experimenting with Instacart is I think the market has to decide if this model makes sense:   Do customers know that the shoppers are basically reliant on tips like a waitstaff? If so, are they willing to pay 15% to 20% gratuities?  Will shoppers hold out and just decline accepting orders that have a lower gratuity rate? Will Instacart tweak their system and make the model work by giving better information to the shopper and more time to review a job?   Those are decisions that Instacart and its customers/shoppers have to make to decide if they want reliable on-demand grocery delivery. In the meantime, if you’re looking for a nice side income to reliably bring in $600/mo in extra net income, I would encourage you to sign up!

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10 Replies to “Stop Ironing Shirts: Instacart Shopper”

    1. Now is a great time to try, I did IC because I actually like grocery shopping. If I were looking to maximize earnings and minimize risk, I’d be running contactless restaurant delivery. Picking up from a restaurant and dropping off at a doorstep seems lower risk and I’ve heard of people earning $35/hr right now

  1. You should consider deducting a portion of your cell phone bill and you also deduct 1/2 of SE taxes so your take home per hour is probably closer to $18.

    1. Thank you for the feedback, I didn’t include the cell phone part in my analysis but should have. It would have been a $5 benefit for the week.

      Interested in the SE taxes, it’s my first time with these.

  2. This is informative. I’ve used Instacart one time as a customer, and I wasn’t impressed, but I think a lot of that has to do with incorrectly managed expectations. I certainly didn’t realize that the money shoppers earn is so dependent on tips. I was also a little confused about why my shopper folded my frozen pizza to stuff it into her cooler bag. I have two questions for you if you have time to answer them… I’m guessing Instacart doesn’t provide you with cooler bags and any you use are your own. Is that right? And has anybody left you a cash tip outside of the official app process?

    1. From what I can tell, some things have changed with the shopper process, including something about cooler bags. When I first looked into Instacart, I said “this sounds too close to an employment arrangement” and didn’t move forward. Scheduled delivery shifts and something about buying my own cooler bags so I passed. When I signed up recently, there was no guidance about coolers, but when I hit “checkout completed”, I get a “must deliver by XX:XX”. The timeframe had been reasonable and all cold items would stay cold. I personally have a giant cooler in my trunk and put the most critical items in that.

      I’ve never received a cash tip, but I am still hoping it happens! I can see how many orders someone has when I accept one, most of the people have been new to Instacart.

      Personally I would use it if I needed an Aldi order and couldn’t get out there. It’s still cheaper than my full price store even with IC’s small markup and a proper tip.

  3. Are there high-end groceries stores offering delivery service? I can imagine anyone willing to pay 25-30% more on groceries would also pay for front-door delivery. Their orders would be $$$ and they might be more likely to tip? Neat way to see new neighbourhoods – cool upside!

    1. Walmart, Whole Foods, and Kroger aren’t participating with Instacart and do their own thing. I am getting orders and seeing orders from Publix’s high end chain, but I’m not noticing a meaningful difference in tip.

      The neighborhood benefit had been great! Highly recommend it, found two different pockets of homes already we didn’t know existed.

  4. Great article. I appreciate the honest review of your experience. I haven’t used this service and it’s interesting to learn more about. People should be tipping well for a service like this, especially with the mayhem that many grocery stores are these days. Thank you!

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