In the ever-evolving world of grocery delivery, industry leader Instacart has become a favorite among drivers nationwide. In a crowded world of gig opportunities, it takes a lot to stand out from the pack, and that’s what this company has done.
Simlar to the model used by Shipt, it’s largest competitor in the grocery delivery space, Instacart drivers make money by delivering groceries to customers. Instacart represents an opportunity to make extra money while enjoying flexible hours and tips. When compared to minimum wage, part-time jobs, this pay is comparable or even higher while offering more freedom and autonomy.
But how much does Instacart pay? And what costs should you be aware of? We set out to answer these questions by looking at all the available data on both how much Instacart drivers are making and how much they can expect to spend on expenses related to their work.
Sound like something you want in on? You can apply as a shopper and start making money on your own terms.
- Delivery Industry Pay Overview
- Shopper vs Driver – Two Types of Instacart Jobs
- How Much Does Instacart Pay?
- Income Potential
- Instacart Payment Structure for Shoppers
- Instacart Driver Expenses
- Frequently Asked Questions
- Two ways to earn: full-service shopper (grocery shopping and delivery) or in-store shopper (shopping only)
- Minimum average hourly wage across the country is $10 per hour
- Work on your own schedule with no minimum hours required
Delivery Industry Pay Overview
A major challenge of comparing the pay of various delivery platforms is that hourly wage information for independent contractors is very hard to come by. Not only is it hard to dig up, but the amount drivers are capable of making is largely dependent on how many hours of work they put in, where the grocery store they’re driving to is located, and at what times they drive. This is true of every grocery delivery service, even DoorDash and Shipt.
Sure, some platforms may come out and say you can make “X” amount of dollars per hour, but in many cases, delivery platforms avoid giving any hard numbers. It makes sense. Why would a delivery service throw out a subjective base pay number that many personal shoppers and drivers will find difficult to meet?
At one point Instacart advertised an hourly wage of $25 and it ended up backfiring as its shoppers expressed displeasure all across the web and in the media. We have a sneaky suspicion that other services took note and pulled any lofty claims from their site.
Shopper vs Driver – Two Types of Instacart Jobs
When answering the question, “How much does Instacart pay?”, the first thing to do is ask yourself whether you want the job of a shopper or the job of a driver.
These two roles can be filled by the same person, known as a Full Service Shopper. This is usually the case in markets with little demand and few orders. However, as time goes on and the company rapidly expands its number of orders and customers, these are becoming two distinctly different roles.
In the case that these jobs are different, there is one person that does the shopping (AKA the in-store shopper), and another that does the driving (AKA the driver). Having two separate jobs for each person makes the delivery process from store to customer an efficient and easy one. The shoppers can spend more time shopping just as the drivers can spend more time driving.
Instacart jobs are very flexible as well. If an in-store shopper does not have orders that are being delivered by a driver, they can also expect to shop for and prepare orders for curbside pickup. This job is helpful to customers, as some do not like to wait for the driver to come all the way to their house, but instead they are able to quickly drop by the store without having to actually go in themselves.
How Much Does Instacart Pay?
Exact hourly pay for Instacart drivers is hard to predict. The company publishes no official data on contractor pay, though they do advertise that drivers can make up to $25 per hour during busy times.
In practice, however, drivers will rarely reach that $25 number. According to user-reported data on Glassdoor.com, full-service shoppers for Instacart are making between $7 and $20 per hour, with $11 per hour being the average.
Indeed.com, another popular career and ratings site, reports that Instacart shoppers are paid around $17 per hour. Of that number, 45% publicly reported that they are not happy with the amount that they are paid when working with Instacart. Keep in mind that this figured is from only 46 ratings, so it is not really statistically accurate. But.. it does give a good idea into compensation.
At present, there is no “hourly guarantee” like rideshare and other delivery services offer. This means that you should be prepared for a wide variation in hourly income when working for the service.
However, you can in theory make as much as you want under this model.
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Instacart’s momentum approach is a consistent one — publicize the advantages of driving for the service, as flexible on-demand hours, a mobile workplace, and setting your own schedule — and paint the rosy picture of “make a lot of additional money as you need,” leaving the limitations in the hands of the drivers. On the off chance that you need to earn higher wages, at that point it’s dependent on you to do so.
This incorporates driving during the busiest hours that regularly pay higher than other periods, utilizing rewards and motivations most offer, and making sense of the specific problem areas or stores in your city that have the most requests.
You’ll clearly top out at a specific amount of monthly pay. Let’s face it, you’re not going to begin driving for a gig company and make millions. You’ll have the control to make more than different drivers however.
While the precise algorithm that Instacart use to calculate driver pay is unknown, we do know that drivers earn more for making deliveries when demand is high. During periods of high order demand, Instacart charges customers an extra “Busy Pricing” service fee. This helps ensure that the supply of drivers matches the number of open orders. As a driver, you can therefore maximize your earnings by accepting orders during times that tend to be busier, such as evenings and weekends.
The number one opportunity for increasing your driver earnings, however, is tips. Tips are what can push your hourly income way above the base rate that Instacart sets. To maximize your chances of receiving a tip, make sure to provide the best possible customer service. Follow customer instructions closely, deliver orders on time and be friendly. Paying attention to these details will go a long way toward boosting your tips.
Instacart Payment Structure for Shoppers and Drivers
Instacart Shoppers and drivers are compensated based on a number of factors, including how many items are in each order they fulfill, the distance between the store and the customer’s delivery address, incentives available during the time of delivery, and tips given to them by generous customers. The algorithm changes often, and nobody really knows exactly how it calculates payment.
In the past, Instacart paid drivers and shoppers a flat delivery fee for their time, but when they decided to factor in large purchases and heavy items such as cases of water and soda, the company realized this would no longer work. Hence the change that focuses more on the variables above to improve payments and make them more fair to Shoppers.
In fact, last year Instacart changed up how much it paid entirely. The goal was to attract and retain shoppers and drivers by providing them with a payment structure that paid well, but that was also reasonable for the company. After the changes, we feel that the changes are good for both sides of the table.
The main changes to the new payment structure include:
- Instacart now pays shoppers 100% of the tips they earn during deliveries. This is separate from a Shopper’s base compensation
- Instacart increased the minimum a shopper will earn from a batch payment
Now let’s take a look at a few factors that heavily impact how Instacart pays contractors.
Minimum Batch Payment
Instacart shoppers are paid a minimum amount for every “batch”, or order, they complete. This amount was previously $3, but after a PR snafu when changing up their payment structure once again, the company increased the amount of the batch payments to between $7 and $10.
Full service batches are between $7 and $10, while delivery-only batches pay out $5. Tips are also not included in the minimum batch payment, allowing shoppers and delivery drivers to earn even more each time they decide to work.
Unlike many other delivery service workers, Instacart Shoppers get to keep 100% of the tips they earn when driving and delivery though the service. The company has fought workers on this in the past, but currently they play nice.
Instacart customers are encouraged to tip after every order. After checkout, they see a prompt that automatically calculates a tip for their driver based on the size of their order. They can change the amount up or down, but many customers simply keep it as is. The prompt also explains that drivers keep 100% of their tips.
After Instacart introduced the automatic tipping feature, we heard a lot of good feedback from shoppers and drivers. Overall, the feedback was positive, with many reporting that their tips increased as a result of the feature. Much of this was due to the virtual elimination of zero-tip orders, but any step in the right direction is good enough for us.
Instacart rewards its best shoppers in the form of bonuses that they refer to as Peak Boost and Quality Bonus. These incentives are a great way to attract, but most importantly, retain hard workers on the platform. The most satisfied hard-working shoppers on the platform, the better the service becomes for customers.
Quality Bonuses are a $3 incentive given to shoppers that earn 5 star ratings from customers. Many shoppers don’t meet this criteria, but the ones that do go above and beyond to earn it again.
The Peak Boost bonus is another additional payout that drivers receive when they drive in times of high demand. It is the grocery equivalent to Uber’s Surge Pricing.
Aside from bonuses and incentives, tips make up the bulk of additional payments.
Instacart Driver Expenses
Working as an Instacart shopper has a lot of benefits, including a flexible schedule, active job and the chance to earn tips. However, when logged into the shopper app, working for yourself also means that you’re responsible for additional expenses and considerations that you don’t have to worry about in a full-time job.
As an Instacart shopper, you are an independent contractor. This means that you have to cover all your own expenses and pay your own taxes. Because of this, the hourly pay you earn from Instacart will not be the final amount you clear after taxes. Let’s look at some common expenses you’ll have as an Instacart delivery driver:
- Gas — The price of gas varies greatly across the United States, averaging as low as $2.63 per gallon in Mississippi to as high as $3.72 per gallon in California, according to data from GasBuddy at the date of publication.
- Vehicle Insurance — The average annual cost of vehicle insurance is $907.38 per year according to a 2014 study by Quadrant Information Services. This number can vary widely, however, averaging as high as $2,500 per year in some states.
- Car Payment — As of 2017, the average car payment on a new vehicle was $479 per month. This can really cut into your earnings, though of course this amount can vary (or even be nothing if the car you’re using is paid off).
- Vehicle Maintenance — Need a new tire? Transmission fluid running low? Windshield wiper break? As an independent contractor, you’re responsible for covering these costs, just as you would if you were using your vehicle for regular driving. According to AAA, the average cost of repairs, maintenance and tires is $99 a month for a new car. You’ll likely need to drop a few hundred dollars all at once for a repair, so make sure to put aside some of what you make each week to cover that.
- Vehicle Registration and Fees — These vary from state to state, but are usually under $100. You’ll have to pay this fee as long as you own a car, but since you’re using your car for business, you should still consider it.
- Taxes — Taxes are an expense that many independent contractors overlook. This can make for a nasty surprise when tax time rolls around, as you’re responsible for paying the necessary state and federal income taxes on the money you make delivering for Instacart. The taxes on your Instacart income won’t be very high since most drivers are making around $11 per hour, but you still need to set aside some of the money you make each week to cover them. To learn more, check out our Complete Guide to Self-Employment Taxes in 2020.
While these expenses do add up, there is one consolation you should know about. As an independent contractor, you can write off certain business-related transportation expenses when you file your taxes.
In particular, you can write off miles you drive while making deliveries. For 2020, the rate is about $0.58 cents per mile driven for business purposes. The tax guide we mentioned above goes into more detail on deductions you can take.
Frequently Asked Questions
We’ve collected some of the most commonly asked questions about Instacart pay.
Can you make good money with Instacart?
If you are familiar with the best time to work with Instacart, you can certainly make good money by grocery shopping or driving with the app. Because of the process and technology Instacart uses, payments are seamless, automatic, and hit your account quickly. Some shoppers are
Who pays for groceries on Instacart?
Instacart Shoppers pay for grocery orders with a credit card or debit card issued by the company. They do not have to put up their own funds to pay for orders.
At time of checkout, the Shopper will swipe the card that was issued to them during orientation, then sign for the transaction once the payment goes through.
Does Instacart pay if there are no orders?
No. If there are no orders available, the company will not pay it’s contractors for the time spent waiting. The gig is a purely on-demand one, meaning they do not pay for idle time.
Earn What You Put In
We hope this article has helped you understand both what you can expect to make as an Instacart driver and the expenses you should be aware of.
In the end, it’s up to you to decide if you want to deliver for Instacart. If you’re not satisfied with this pay rate, then you have additional part-time jobs within the delivery space you can choose from.
You could even look into other gig jobs like Uber and Lyft that also offer outlets for you to make extra money. Regardless, you’ll surely be able to make above the minimum wage level at nearly any gig economy job you pick up.
To learn more about how to get started driving for Instacart, check out our How to Become an Instacart Driver guide.