Shipt Shoppers Allege New Algorithm Cuts Their Pay Up to 50%

Shipt shoppers held a strike earlier this month to protest the company’s switch to a less-than-transparent pay structure that many feel has led to anemic wages.

Shipt, a shopping service company bought by Target in 2017, started testing a new pay structure on July 15 in a dozen markets. To protest the change, Shipt shoppers in California and other states held their walkout that day.

Previously, Shipt workers earned a 7.5%commission on all orders plus $5 per order. According to the Los Angeles Times, Shipt workers say they will earn between 30 and 50% less.

One worker told the Times she spent nearly an hour shopping for the right litter box for a customer with an injured cat, plus an additional 15 minutes to deliver the purchase. She earned just under $9 for her time and effort. She decided that was her last job as a Shipt worker.

An announcement regarding the pay rate change on Shipt’s website says, “The updated pay model takes into account the many factors, such as estimated drive time, the number of items in the order, peak shopping windows and location, that can affect the effort needed to shop and deliver an order. This means that some orders may pay out differently than before since payment is based on effort and not on the value of the order.”

Although Shipt goes on to say that in places where they have begun the new pay model, average base pay levels have overall appeared to remain consistent, the company also says it has “invested tens of millions of dollars” in its Shipt delivery workers by making sure they have “personal protective equipment, financial assistance and bonus pay during uncertain times.”

In addition to receiving lower wages, Shipt workers say they are not pleased that the new pay model isn’t transparent. It’s difficult to see exactly what the pay is based upon, and Shipt said the company does not make its pay structure publicly available.

Shipt Shoppers Agree New Pay Model is Unattractive

One longtime Shipt delivery worker in Michigan said she noticed reduced pay as soon as the new pay model rolled out in her area. []

“With the new pay scale I felt like I was basically working for free,” Jeanine Meisner told The Hill.

Meisner said she and fellow shoppers have tried texting, calling and emailing Shipt headquarters about the significant money loss, but said so far, they have only received rehearsed responses that don’t get them anywhere.

Shoppers say the decreased wages combined with the risk of COVID-19 make Shipt a much less attractive gig-income company.

Dissatisfied Shipt workers took to the internet and posted an announcement regarding their planned walkout and their opinion of the new payment algorithm on Medium.com. Shoppers expressed that the unclear pay dynamic, referred to as a black box algorithm, allows Shipt to reduce worker pay without announcing a pay cut.

In the post, Ship delivery shoppers allege Instacart created and instituted its own black box algorithm back in 2018, which has led to pay that “has continuously and systematically declined since that time without any formal notice of Instacart’s shoppers of a pay decrease.”

Shipt shoppers suspect that without any notable way for them to monitor their rate of pay, Shipt will also decrease wages in a similar fashion.

The unhappy workers also allege that Shipt as a company is making tremendous profits during the pandemic, so the company is not cutting workers’ pay out of necessity. Unlike retailers and restaurants, Shipt has seen demand increase since the end of the first quarter of the year when the coronavirus began influencing mandatory and voluntary stay-at-home practices among the nation’s households.

Some workers are considering making a wage and hour claim against Shipt if the wage rates remain unclear and the pay decreases.

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