Instacart has decided to again allow customers to tip the grocery delivery service's personal shoppers while ordering online, after the removal of tipping capabilities proved unpopular with both shoppers and customers.
CEO Apoorva Mehta suggested that Instacart acted primarily on customer feedback — and not entirely on complaints from its workforce of thousands of shoppers — in reversing its tipping decision, though he acknowledged that Instacart did take into account the small, "very vocal" group of shoppers who had complained about the change.
Instacart had eliminated the tipping capability last month as part of a series of steps intended to increase and guarantee shoppers consistent earnings per delivery, so that some shoppers wouldn't need to rely on customer tips for most of their earnings. The re-introduction of online tipping will take effect today in the company's Washington, D.C. market and on Oct. 24 across the rest of its markets.
It would be interesting to know if the personal shoppers who complained the loudest are also the ones among Instacart's highest rated shoppers — those who have a sense of competitiveness and have been aggressive in trying to offer superior service, the kind of service that earns more tips. After all, removing the capability to tip within the online ordering experience naturally seems like it would lessen the likelihood that customers would tip regardless of service quality, since it would require them to dig around for cash in the right denominations at the time of delivery.
Instacart says customer sentiment was a major factor in reversing it policy change, and the company definitely doesn't want to alienate the shoppers within its workforce that are trying the hardest to earn that extra few dollars per order. At the same time, however, its original decision to disallow online tipping seems to have been made in an effort to try to help its shoppers make more money overall and gain some consistency in their earnings.
It didn't work as planned, and you have to wonder if Instacart gained some valuable insight into just how competitive its small, vocal group of complainers are. That's knowledge that could help Instacart better plan future benefits for its highest-rated shoppers.
Instacart has been spending a lot of time in recent months tweaking its business model in various ways. The company has wandered from its original delivery strategy to experiment with customer pickup of grocery orders, and also cut its cashier hours in New York City to give more responsibility and control over orders to its army of shoppers.
Instacart also is seeing its market change rapidly, as more stores look to offer express delivery of a variety of products, in many cases including groceries. Costco and Sam's Club are the latest major retailers to jump into this sector. New player Shipt also recent raised new funding. With competition growing, Instacart is going to have to settle on a strategy that works for everybody involved — the company, its customers and its best shoppers.