Jan 21, 2021 - Economy

Instacart cuts nearly 1,900 in-store jobs

Illustration of a shopping basket on a grid with a push pin.

Illustration: Aïda Amer/Axios

Instacart is laying off nearly 1,900 of its part-time employees who assemble customer orders at grocery stores, including a 10-person union at a Kroger-owned store in Skokie, Illinois, as Motherboard first reported and the company confirmed to Axios.

The big picture: Instacart is cutting positions that come with employment status and related benefits — an anomaly within the gig economy and even Instacart's own business, which relies on independent-contractor delivery drivers.

Between the lines: The grocery delivery company, which reportedly plans to go public this year, says the cuts are a result of changes in its partnerships with certain stores that prefer to have their own staff assemble customer orders and hand them off to Instacart's drivers.

  • "With certain markets or retailers, including Kroger-owned stores, Instacart's current use of [in-store shoppers] is significantly more expensive on a cost-per-delivery basis than" having independent-contractor Instacart shoppers handle the entire order assembly and delivery, an attorney representing the company said in a letter to the union.
  • The company also says affected workers will be able to apply for some of those store staff jobs as well as Instacart's own in-store positions in their areas.
  • It's unclear how many of either jobs will be available or how many workers will ultimately end up in them.

"We know this is an incredibly challenging time for many as we move through the COVID-19 crisis, and we’re doing everything we can to support in-store shoppers through this transition," the company said in a statement to Axios.

  • Yes, but: A spokesperson for Kroger, whose stores were home to hundreds of the affected jobs including the union positions, told CNN the grocery giant "was not involved in Instacart's decision to suspend its in-store operations model."
  • An Instacart spokesperson was not aware of that statement when reached.

Flashback: Instacart joined Uber, Lyft and others on a successful campaign to convince California voters to approve a ballot measure in November ensuring gig companies can keep treating their workers as contractors and not employees.

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