Instacart is reportedly set to announce a new feature tomorrow that allows shoppers (the Instacart workers who go into the stores on behalf of customers) to have immediate access to money they’ve earned, rather than having to wait a week to get paid.
We say “set to announce” because it looks like TechCrunch published an embargoed story today, a day before Instacart was going to announce the new feature. But enough inside baseball. The new option is called Instant Cashout, and it was created in partnership with payment processor, Stripe. With Cashout, Instacart’s shoppers can choose to have the money they earn transferred immediately to a debit card rather than waiting for their payment. Cashout will be available at first in Boston, MA and Bend, OR, and will reach all shoppers by June 2019.
As TechCrunch points out, the move comes after a tumultuous time in labor relations between Instacart and the workers it brings on as shoppers. The delivery startup had to reverse an earlier policy that counted tips towards base wages, and prior to that in 2017, Instacart settled a class action lawsuit over how it classified its shoppers.
Instant payment isn’t a new concept, however, and Instacart is behind the times compared with other gig economy startups like Uber, Lyft and Postmates, which already offer a similar feature. Outside of startupland, a company called (appropriately enough) Instant, helps restaurants like McDonald’s (franchisees) and Outback Steakhouse create a daily paycheck plan for their employees.
Instacart has raised nearly $2 billion dollars, and being so tight-fisted with money earned by the workers on the front line of its service isn’t a good look. This is especially true as the delivery space gets more heated. DoorDash is delivering groceries, Postmates has an IPO planned and grocers like Kroger are testing self-driving cars, which would eliminate the need for a delivery person at all.
If Instacart wants to stay competitive, it’s going to have to make working there competitive as well. Instant cashout a lets puts the company on par with its rivals.
Yeah but it cost to actually cash out early. With the amount of pay they are giving us right now, we have no choice but to cash out. Just to be able to put gas in my delivery van. This $7 a hour is ridiculous, especially when its my vehicle that takes all the wear and tear, gas, tires, oil changes, normal upkeep. Im doing all the work shopping, driving to ridiculous amounts of miles with two orders at a time tipping 2 on the app. Ever since they changed the pay, the actual tips are way lower than ive ever seen. But when they tip in cash its always good….everything about instacart is sounding and looking very fishy!!!