Instacart plans to fire more than 1,800 in-store “shoppers” in March as the delivery service wants to cut labor costs. It is less clear who is responsible for firing it.
The 1,877 people are among the relatively few Instacart employees who are legally classified as employees rather than contractors. They are paid by the hour, are eligible for benefits, and work within one store to pick up and pack orders that others will deliver. Among them are Instacart’s only employees: 10 shoppers, as the workers are called, at a Mariano’s grocery store in Skokie, Illinois, and 366 in-store shoppers in Kroger stores across the country. (Mariano’s is also a subsidiary of Kroger.)
An Instacart spokesperson said it was firing the employees at the request of supermarkets who wanted their own employees to do it instead of the delivery company. Under this model, called “Partner Pick,” supermarket employees use Instacart’s app to fulfill customer orders.
“As a result of some grocers moving to a Partner Pick model, we will be phasing out our in-store operations at selected retail locations in the coming months,” Instacart said in a statement.
Kroger, however, denied having a role in the layoffs.
“The Kroger family of companies was not involved in Instacart’s decision to suspend the in-store operations model,” a spokesperson said in a statement, adding, “For those looking for a career opportunity, we have thousands of retail features available at jobs.kroger.com. “
More expensive employees
There are fewer than 10,000 store associates on Instacart’s platform, compared to half a million independent contractors, which the company calls “Full-Service Shoppers.” These workers take groceries from many stores and deliver them to customers in the US.
According to a lawyer representing Instacart, Instacart has reduced the number of shoppers on its platform since 2018 because they are significantly more expensive. The workforce in stores in Los Angeles, Minneapolis, San Diego, Seattle and parts of Texas has been reduced as a result.
Instacart’s current use of [in-store shoppers] is considerably more expensive on a cost-per-delivery basis than using a pure one [full-service shopper] model, ” the lawyer wrote in a letter to the United Food and Commercial Workers union, which represents the 10 Instacart workers in Skokie.
Using independent grocery and delivery contractors offers the advantage that Instacart can quickly scale its on-call workforce according to business requirements, rather than rostered workers.
The laid-off employees will be able to apply directly to Kroger or other grocery stores and will receive severance packages of $ 250 to $ 750 each, the attorney said.
“There was some stability”
For Noelle Marian, one of the 10 union workers who was fired, she said she appreciated its predictability. Marian has been shopping for Instacart since 2019, she told CBS MoneyWatch. She chose Instacart in-store over other types of odd jobs because she felt safer working in one location and liked the stability of the work.
“It doesn’t pay much, but I can support myself. I can run errands, pay for my car and pay my phone bill,” said Marian. “There was some stability, but now all of that just goes away.”
Marian also doubts Instacart will help her find a new job, given her participation in the effort to unite workers. “I don’t think Instacart will give me a letter of recommendation. I hope that’s not the case for the other team members.”
But she’s worried that more and more shoppers will be fired until Instacart drops them altogether. She pointed to deals the company struck with Aldi and Sprouts last year, where employees of those supermarkets would make deliveries on Instacart’s platform.
“I don’t think they were interested in hiring people to do the actual job,” she said. “I think they used us for data information for their program and now that they have that information, they are systematically deleting us.”