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by malz 3401 days ago
https://www.instacart.com/help/section/200761924#213895126

Why does Instacart use a service amount?

Instacart is different than other delivery services because multiple shoppers may be involved in a single order. Some shoppers work in stores, for example, while others are involved in driving to deliver an order.

The service amount is used to pay this entire set of shoppers. Furthermore, it helps to ensure that all shoppers are compensated fairly and competitively, and that shoppers are working collectively toward the common goal of providing an excellent experience for all customers throughout the entire order process.

Should I still tip the shopper delivering my order?

Additional tipping is optional. The entire amount you select goes directly to the shopper delivering your order.

Why is there as service amount and a tip?

The service amount is distinct from a tip. Instacart uses the service amount to provide higher guaranteed commissions to all shoppers on the platform. This will help us ensure that shoppers no longer rely on unpredictable tips for the majority of their compensation. Leaving a service amount is optional, and you may set the service amount to $0 in the checkout flow before you place your order.

If you wish to include an additional tip for exceptional service performed specifically by the shopper who delivered your order, you may do so on our online platform, or in cash.

1 comments

The way I read this is "the service fee is a way to give us more money, so we have more money to pay to everyone who works for us". So then why not just raise your prices and pay your employees more?

If the service fee was split across everyone who participated in your individual transaction, I could understand. Otherwise this is just a way of them saying "a service fee is a way to tip the company, so we can maybe pay our employees more".

Because their basic fee is just the delivery fee. They don't set the prices - the supermarkets do. The service fee is a consistent way for them to generate enough revenue to pay their shoppers and drivers, compared to the variability of user-provided tips before.
That doesn't make much sense to me. There's no difference in labour cost for buying a single roll of toilet paper or a bottle of Champagne.
Why isn't the delivery fee enough to pay for the delivery?