Instacart is backpedaling.
The app company that waged an all-out (and unsuccessful) campaign against a City Council bill to create a minimum wage for grocery delivery workers has abandoned a much-disputed earlier claim that fair pay would raise the cost of groceries — and is now flip-flopped to say it supports the bill.
Well, sort of.
In a letter sent on Wednesday to its longtime lobbying target Council Speaker Adrienne Adams, the company reframed its objections to closing the so-called “Instacart Loophole” and now says it “fully support[s] a minimum pay standard of $21.44 per hour for grocery delivery workers in New York City.”
But Instacart’s position hasn’t actually changed much at all since Mayor Adams vetoed the Council bill, Intro 1135; rather, the company has — with the help of big bucks spin doctors at Tusk Strategies — simply abandoned the claim that a minimum wage for grocery delivery workers would harm low-income New Yorkers by making groceries more expensive.
But there is a devil in that detail: The company that says it supports the minimum wage bill supports that wage only for the minutes between when a delivery worker starts an order and when he or she makes the delivery, but not for the other time workers are logged into the app, such as when waiting for an order or motoring back to a supermarket after a delivery.
As such, Instacart said it wants Speaker Adams to amend the bill before the Council votes on Sept. 10 to override Mayor Adams’s veto.
“Rather than voting to override, we respectfully urge you to instead pursue a workable and fair compromise that is within reach: a $21.44 minimum active hourly rate of pay,” the letter reads.
The company’s demand for the “active” pay wage is a threat which follows a playbook first drafted by the restaurant delivery apps in their earlier battle against a similar minimum wage law. Instacart says that if it had to pay workers for all the time that they are logged onto the app, the company will be forced “to limit and restrict worker access and choice.”
But experts see this as a specious argument.
“They’re in favor of a pay standard as long as it has a loophole big enough to drive a supermarket through,” said James Parrott, the director of economic and fiscal policies at the Center for New York City Affairs at The New School, who consulted with the city on the landmark minimum pay law for restaurant app workers. “Most labor economists would consider that any time the worker has the app on, the worker is working. They’ve indicated their availability to do a delivery, so they’re working, and they should be paid for that time.”
This wouldn’t be an issue had not Mayor Adams abandoned his administration’s previous position by vetoing Intro 1135. The mayor’s decision to side with the company was a surprise — and workers advocates blamed Instacart for simply lying about the economics of the minimum wage.
“Instacart’s latest letter is nothing more than corporate spin designed to confuse the public and City Council,” said Ligia Guallpa, the executive director of Worker’s Justice Project, which pushed for the original minimum wage for restaurant app workers. “Let’s be clear: the company’s claim that New York City’s Department of Consumer and Worker Protection [wage] calculation system is a ‘threat’ to workers’ schedules is not only misleading — it is a flat-out lie.”
How did we get here?
To recap, in July, the City Council passed two bills to give all gig delivery workers the same hard-won minimum wage that restaurant delivery workers won in 2023. The main bill, Intro 1135, would require grocery delivery apps like Instacart to start following the pay standard law: $21.44 per hour.
Instacart has long opposed the bill since Council Member Sandy Nurse (D-Bushwick) introduced it in December 2024. But the company redoubled its effort (and spending) to encourage Mayor Adams to veto it. The company hired powerful consulting firm Tusk Strategies to develop a campaign against the bill. As part of this it started and funded the group “New Yorkers For Affordable Groceries” that poses as an activist organization, such groups are often derided as Astro-Turf organizations, as opposed to “grassroots” ones.
The group’s slogan is “more affordable groceries,” which is misleading since the bill does not require those companies to increase prices, but simply to pay workers more. In addition, the letter to Speaker Adams uses testimonials that are “cherry-picked and scripted to serve the company’s interests,” Guallpa said.
“Every week, deliveristas testify about the reality” of working for Instacart, she said. “Long unpaid hours, dangerous working conditions, and unpredictable paychecks. Workers are demanding change, and these bills answer that demand.”
Instacart’s aggressive stance against the bill, and its arguments that it would somehow harm low income New Yorkers who rely on its services, which inherently add cost to groceries anyways, clearly didn’t work.
Although the mayor vetoed the bill earlier this month, Speaker Adams vowed to override this action — and she has the votes to do so.
“The mayor’s vetoes are anti-worker and anti-working class. … The hypocrisy of his claims are on full display for all to see,” the speaker told reporters after the mayor’s vetoes (she even cited Streetsblog’s coverage). “Despite [Instacart’s] efforts to deceive the public, these bills do not increase the cost of groceries. Any added fees are about padding [Instacart’s] own profits, be not deceived.”
A Council spokesperson said the letter from Instacart had not changed the Speaker’s opinion, and that there are still no plans to amend the bill.
Minimum pay calculation
There are actually two ways that the companies can calculate minimum pay under the law.
With the “standard option,” which is what most companies use, the app’s payment to each individual worker must be at or about the minimum pay rate multiplied by the sum of that worker’s trip time (time between pickup and delivery). In addition, the app’s total payment to all workers operating during that pay period must meet or exceed the minimum wage multiplied by the sum of all workers’ total time worked that week.
The second option is known as the “alternative option.” In this scenario the company pays each worker the “alternative minimum pay rate” for just the time between pickup and delivery. The alternative rate is calculated by dividing the minimum pay rate by 60 percent, which is meant to adjust the rate to include the estimated time a worker is not actively making a delivery, but is still working, known as the “utilization rate.”
Both options take into account the total time that deliveristas spend working, not just the time they are in transit between deliveries. To Guallpa, Instacart’s demands to take utilization rate out of the equation doesn’t take into account the entire job.
“Instacart’s sudden embrace of a $21.44 ‘minimum pay’ rings hollow when paired with their demand to exclude on-call time from the calculation. That is not a real minimum pay standard—it is a pay cut in disguise. Their version would guarantee that many workers remain stuck earning poverty wages, while Instacart continues to profit,” she said.
But Instacart’s letter focuses on the flexibility of gig work, telling the Speaker that a minimum wage would “force” the company to implement shift scheduling.
“[The bill] would fundamentally change how Instacart operates in New York City, forcing us to manage online time through shift scheduling or similar systems — eliminating the flexibility so many have come to rely on to earn extra money for themselves and their families,” the letter reads.
But economists push back on this notion that flexibility is king. And the law doesn’t require the apps to implement a scheduling system at all. In fact, the apps choose to do this in order to continue the practice of letting more workers onto the platform than there is work available, which allows them to drive down prices and never have a customer wait for an order to be picked up.
“There’s never unlimited flexibility. The workers on all of these platforms they understand through experience when the busy times are, and then they use their ‘flexibility’ to decide to work during those hours,” said Parrott. “Even if the the companies felt like they needed to schedule drivers in order to make the pay standard work for themselves, they could just schedule [workers] when they want to be scheduled.”
The companies continue to blame how the pay rate is calculated for these scheduling policies that lock workers out of the apps at certain times based on opaque grading systems.
But there is legislation in the pipeline that aims to fix this problem. A bill introduced by Council Member Justin Brannan (D-Bay Ridge) would protect workers from being kicked off their accounts or blocked from logging in without a reason, which could push apps to stop using lockouts to boost profits. To workers, this legislation is vital to make sure the minimum pay standard has the positive effect it was intended to.
“Along with fair pay, delivery workers urgently need just cause deactivation protections to stop Instacart and other apps from unjustly locking workers out of their accounts, manipulating schedules, and retaliating against those who speak out,” Guallpa said.
