Instacart plans to lay off more than 1,800 “shoppers” in stores in March as the delivery service slows down to cut labor costs. Less clear is who is responsible for firing them.
The 1,877 people are among the relatively few Instacart workers legally classified as employees instead of contractors. They are paid by the hour, are eligible for benefits, and work in a single store, collecting and packaging orders that others proceed to deliver. Among them are Instacart’s only unionized employees: 10 shoppers, as workers are called, at a Mariano supermarket in Skokie, Illinois, and 366 shoppers at Kroger stores nationwide. (Mariano’s is also a subsidiary of Kroger).
An Instacart spokesman said he fired workers at the request of grocery stores who wanted their own employees to be working instead of the delivery company. Under this model, called the “Partner Pick,” employees of a grocery store use the Instacart app to fulfill customer orders.
“As a result of some supermarkets switching to a Partner Pick model, we will end our in-store operations at certain outlets over the next few months,” Instacart said in a statement.
Kroger, however, denied having any role in the layoffs.
“The Kroger family of companies did not participate in Instacart’s decision to suspend its in-store operations model,” a spokesman said in a statement, adding, “For those looking for a career opportunity, we have thousands of commercial roles available at jobs.kroger.com “.
More expensive workers
There are less than 10,000 in-store employees on the Instacart platform, compared to half a million independent contractors, whom the company calls “full-service buyers.” These workers pack groceries from many stores and deliver them to customers across the US
Since 2018, Instacart has reduced the number of buyers on its platform because they are significantly more expensive, according to a lawyer representing Instacart. It has downsized its stores in Los Angeles, Minneapolis, San Diego, Seattle and parts of Texas.
“Current Instacart usage of [in-store shoppers] it is significantly more expensive depending on the cost per delivery than using a cigar [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.
The use of independent contractors for purchases and deliveries offers the advantage of allowing Instacart to quickly scale its on-call staff up or down according to business needs, rather than dealing with scheduled employees.
Dismissed workers will be able to apply for jobs directly at Kroger or other grocery stores and will receive compensation packages of between $ 250 and $ 750 each, the lawyer said.
“There was a certain stability”
For Noelle Marian, one of the ten unionized workers fired, she said she valued predictability. Marian has been shopping at Instacart since 2019, she told CBS MoneyWatch. She chose shopping at the Instacart store over other types of gigs because she felt safer working in one place and liked the stability the job offered.
“I don’t pay much, but I’m able to keep up. I can buy groceries, pay for my car, pay my phone bill,” Marian said. “There was a certain stability, but now all that is just disappearing.”
Marian also doubts that Instacart will help her find a new job given her involvement in the effort to unionize 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 he worries that there will be more and more layoffs in the store until Instacart leaves them completely. He noted the offers the company made last year with Aldi and Sprouts, in which employees of these supermarkets would make deliveries on the Instacart platform.
“I don’t think they were interested in hiring people to do the real work,” he said. “I think they used us to get information about their program data and now they have that information, they’re being systematically removed from us.”