Digital Divide

From The Wall Street Journal, Saturday/Sunday, March 12-12, 2016

Instacart Slashes Grocery Couriers' Pay

 Instacart Inc is cutting the fees it pays couriers who shuttle groceries in several cities...

 Instacart informed drivers in recent weeks in some cities, including the San Francisco  and Los Angeles metro areas, about new rates that in some cases will require workers to nearly triple their deliveries to make the same pay, according to emails reviewed by The Wall Street Journal.

Contract drivers in the company's hometown of San Francisco who collect prepacked bags from grocery stores will earn $1.50 a drop-off, a cut of 63% from the previous guarantee of $4.  Instacart is also slashing by 50% to 25 cents the commission it pays for each item in an order drivers collect when shopping in stores....

In its emails to drivers, Instacart said driver could still earn "$18 or even $20 or more per hour" based on its expectation of tips.

Other startups with apps that summon contractors...are scrambling to maintain their business models.

Many of these companies, such as Instacart, rely on a contracted labor force that pays for its own gas, insurance and other fees, helping to keep costs down.  But competitive pressure from well-heeled companies such as Uber Technologies Inc. and Amazon.com Inc. is forcing start-ups to rein in costs....

[Instacart], which operates in 17 U.S. markets, makes money from delivery fees as well as charging more than retail prices for items at some stores and pocketing the difference through commissions paid by the grocer.  

This model, along with the promise of simplifying delivery through smartphone apps, attracted big-name venture-capital investors...

But Instacart has signaled its business of delivering fresh groceries in as little as one hour needs revamping.

 In December, Instacart raised the delivery free for customers to $5.99 form $3.99 and increased its annual fee for unlimited deliveries to $149 from $99. 

Instacart told workers the latest rate changes came after evaluating "order volume, efficiency, and delivery costs," and promised more deliveries and improved routes.

But the immediate effect is many Instacart drivers will earn less for the same deliveries...

A 40-item delivery today pays $25, excluding tips, but would drop to $17.50 in the new structure, based on a Journal calculation

Yes, almost all the elements of the modern, digital economy are there.  The talk about models, and apps, and "contractors" and venture capital and fees and.....tips.  Yeah, tips, shifting the cost for reproducing the labor-power of the laborer away from the actual compensation and onto.......charity.  So very modern.  So very egalitarian.  For an extra-dollar, the deliverer will tap dance, too.

What's missing?  Damn, the article left out "entrepreneurs" and "entrepreneurship."  The article forgot to mention the great things entrepreneurship brings to your doorstep along with your organic, vegan, whole grain quinoa, flax, chia, goji, extra dark fair trade chocolate chip cupcakes.  Like the working poor.  Like super-exploitation where the wage, wait-- don't call it a wage, call it a commission-- is essential to maintaining the marginalization of the-- don't call them workers, call them associates.

Bet you never knew that LA and San Francisco and Seattle where part of the so-called Global South, did you.   Now you do.

Nothing says primitive accumulation like the digital economy....which gets us to our forthcoming topic... ambiguities of surplus value.

S. Artesian
March 16, 2016