November 3, 2019 / 9:24 AM / 18 days ago

Instacart workers protest as pressure mounts on gig companies

Nov 3 (Reuters) - Instacart’s “gig” workers on Sunday will target the grocery shopping and delivery firm with a three-day work action aimed at disrupting service and forcing executives to fix inequalities in pay structures that they say are getting worse every year.

Discontent in the ranks of the nation’s estimated 75 million freelance, or “gig”, workers is simmering as the richly funded Silicon Valley startups that depend on those laborers are under growing pressure to show that they can turn profits.

“They’re always trimming from the bottom. They never trim from the top,” Silicon Valley-based Vanessa Bain, 33, said of Instacart.

Hundreds of Instacart workers have signed two open letters from Bain to company executives. She and other organizers want to revamp the tipping structure at the seven-year-old company, whose 130,000 North American contract workers swarm stores operated by retailers such as Kroger Co KR.N, Walmart Inc WMT.N and Costco Wholesale Corp COST.O.

Bain said a work action in late 2018 helped convince Instacart to stop using tips to subsidize base pay.

This time, workers hope that disrupting service will convince Instacart to increase default tips from 5% to 10%.

Instacart’s hired shoppers - who are dependent on those gratuities - also want the company to remove its 5% service fee. They say the fee confuses customers, who think it goes to workers rather than the company.

Instacart declined to comment on specifics of the action.

“We take the feedback of the shopper community very seriously,” Instacart said in a statement.

When she started with Instacart in early 2015, Bain could earn $1,500 in a 45-hour work week.

Compensation tweaks and competition from other workers has eroded that pay.

Now, Bain and her husband - who also does gig deliveries - bring in just a few hundred dollars a week from Instacart. They’ve picked up work from Caviar, UberEats and DoorDash in a bid to provide for their 11-year-old daughter.

Venture capital firms have funneled $1.9 billion into Instacart, according to Crunchbase. Investors in such startups take the risk because selling shares in initial public offerings can reap massive investment gains.

But mounting losses at Uber Technologies Inc and the implosion of office-sharing startup WeWork have dimmed prospects for such exits.

Beyond that, a California law next year will make it harder for gig companies like Uber and Instacart to use freelancers - a change that could send labor costs up around 30%.

Reporting by Lisa Baertlein in Los Angeles

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