Instacart plans to lay off more than 1,800 in-store “shoppers” in March as the delivery service moves to cut labor costs. Less clear is who is responsible for laying them off.
The 1,877 people are among the relatively few Instacart workers legally classified as employees, rather than contractors. They are paid hourly, are eligible for benefits and work within a single store picking up and packing orders that others proceed to deliver. Among them are Instacart’s only unionized employees: 10 shoppers, as the workers are called, in a Mariano’s supermarket in Skokie, Illinois, and 366 in-store shoppers at Kroger stores nationwide. (Mariano’s is also a Kroger subsidiary.)
An Instacart spokesperson said it laid the workers off at the request of grocery stores that wanted to have their own employees doing the work rather than the delivery company. Under this model, dubbed “Partner Pick,” employees of a grocery store use Instacart’s app to fulfil customer orders.
“As a result of some grocers transitioning to a Partner Pick model, we’ll be winding down our in-store operations at select retailer locations over the coming months,” Instacart said in a statement.
Kroger, however, denied it had a any role in the layoffs.
“The Kroger family of companies was not involved in Instacart’s decision to suspend its in-store operations model,” a spokesperson said in a statement, adding, “For those who are looking for a career opportunity, we have thousands of retail roles available on jobs.kroger.com.”
There are fewer than 10,000 in-store shopper employees on Instacart’s platform, compared with half a million independent contractors, which the company calls “Full-Service Shoppers.” These workers pack groceries from many stores and deliver them to customers around the U.S.
Since 2018, Instacart has been cutting the number of in-store shoppers on its platform because they are significantly more costly, according to a lawyer representing Instacart. It has reduced the in-store workforce in Los Angeles, Minneapolis, San Diego, Seattle and parts of Texas.
“Instacart’s current use of [in-store shoppers] is significantly more expensive on a cost-per-delivery basis than using a pure [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 contractors for shopping and deliveries offers the advantage of letting Instacart quickly scale its on-call workforce up or down as business demands, rather than dealing with scheduled employees.
The laid-off workers will be able to apply for jobs directly with Kroger or other grocery stores, and will receive severance packages from $250 to $750 each, the lawyer said.
“There was some stability”
For Noelle Marian, one of the 10 unionized workers being laid off, saying she appreciated its predictability. Marian has been shopping for Instacart since 2019, she told CBS MoneyWatch. She chose in-store shopping for Instacart over other types of gig work because she felt safer working in a single location and liked the stability the work offered.
“It doesn’t pay a lot, but I’m able to support myself. I can buy groceries, pay for my car, pay my phone bill,” Marian said. “There was some stability, but now that’s all just going away.”
Marian also doubts Instacart will help her find a new job given her participation in the effort to unionize workers. “I don’t think Instacart is going to give me a letter of recommendation. I hope that’s not the case for the other team members.”
But she worries that more and more in-store shoppers will be laid off until Instacart drops them altogether. She pointed to deals the company made last year with Aldi and Sprouts, in which employees of those supermarkets would make deliveries on Instacart’s platform.
“I don’t think they were interested in employing people to do the actual work,” she said. “I think they used us for data information for their program and now they have that information, they’re kind of systematically getting rid of us.”