How Much Does Instacart Pay?

The e-commerce industry continues to grow at an exponential pace. During this timeframe, many entrepreneurs have come up with brilliant ideas.

Before founding Instacart in 2012, Chief Executive Apporva Mehta had failed with 20 startups. These experiences taught him he needed to take a different approach.

Fast forward, Mehta’s breakthrough idea is now one of the best gig economy companies — a delivery app that allows drivers to work on their own terms.

But how much does Instacart pay its employees? This article explores this question in great detail.

What Is Instacart?

Instacart is a San Francisco-based on-demand grocery delivery service company. It partners with local supermarkets, stores, and pharmacies, allowing customers to place orders and have the items delivered to their doorstep.

Having teamed up with retailers like Walmart, 7-Eleven, and Costco, the company operates in hundreds of cities across North America and Canada. Once a customer places an order, an Instacart contractor near the store will fill the orders, purchase the items, and deliver them on time.

Instacart typically delivers within an hour, but the timeframe can be longer depending on several factors such as distance and batch volumes.

How does Instacart work?

To become an Instacart driver, you must meet these basic requirements:

• Be at least 18 years old
• Be eligible to work in the United States
• Have consistent access to a vehicle
• Have and be able to effectively use a recent smartphone (iPhone 6s/ Android 5.0 or newer versions)
• Be able to lift 50lbs with or without accommodation

If you meet the above criteria, you can create an account at shoppers.instacart.com.

After that, download the app from the Google Play/App Store. Once you complete the signup process, the company will run a background check to ensure you meet the requirements threshold.

If your application is approved, Instacart will send you a custom debit card via mail or ask you to collect it in person. You will use the card to shop for customers, meaning you must carry it while working.

The card will not work right away. You must activate it using the payments function on the app.

Is there anything else?

If you are anxious about getting started with Instacart, there is no need to worry. Drivers undergo in-app training to prepare for the job.

Orders

Once you log in to the app, you will see different shopping orders listed on your timeline. The shopping batches differ in contents, volumes, and value.

When you preview a request, it will display relevant information such as:

• The location of the grocery store
• The items you need to shop
• Estimated distance between the delivery location and the store
• The amount you will earn from Instacart
• The customer’s tip

Instacart Gig Workers: Employment Status and Benefits

Before diving into the subject, let’s see the different engagements a gig worker can have with the company.

1.  In-store shopper: they don’t deliver orders to customers but only shop and prepare the items for pick up.
2. Full-service shopper (drivers): they shop and deliver the orders to the customer’s doorstep.
3. Delivery drivers: they only pick up already packed orders and deliver them to the customers.

Unlike those Instacart employees who receive a fixed salary, gig workers at Instacart are by law recognized as independent contractors.

So, what does this mean?

Whether they work as shoppers, drivers, or shoppers and drivers, gig workers are still independent contractors nonetheless. This means that they aren’t Instacart employees but are rather hired by the company to provide shopping and delivery services in its name.

As independent contractors, Instacart shoppers and drivers aren’t eligible for employee benefits such as health insurance or paid time off. However, they are at liberty to set their own working hours.

Lastly, we should mention that in-store shoppers are part-time employees and work 29 hours per week. They are paid hourly, and their Instacart wages are usually outlined in the offer letter.

Instacart Pay Breakdown

As independent contractors, Instacart shoppers and drivers can boost their daily earnings with tips.

Instacart uses the following factors to calculate contractors’ earnings:

• How many hours they work
• When they work (peak hours present better opportunities)
• The batches they select (heavy orders earn more)
• The location of the grocery store & distance of delivery address from the store
• Tips given to them by customers

Instacart doesn’t disclose how much it pays its contractors. However, many platforms such as Glassdoor contain pay estimates based on employee reviews.

How much do Instacart drivers make per hour?

The average pay for Instacart contractors ranges between $10 to $17 per hour.

At some point, the company advertised $25 as the Instacart pay per hour. However, this attracted criticism from drivers who argued the figure was misleading. Executives were forced to backtrack on the position.

However, there are days when contractors’ hourly pay ranges between $25 and $30. Of course, it all depends on the area where they shop/drive and the tips they receive.

How much do Instacart drivers make per delivery?

The average Instacart pay rate per delivery ranges between $15 and $20. Drivers who pick the suitable batches and shop efficiently can earn more.

What is the minimum payment on Instacart?

Instacart calculates its minimum earnings per delivery.

As of July 14, 2022, the minimum pay for full-service drivers ranged between $7 and $10 per batch.

At the same point, the minimum pay for delivery-only drivers was $5 per batch.

Previously, the minimum pay per batch was $3, but Instacart revised this figure following widespread complaints from drivers.

Tips

Tips depend on how generous customers are. Those who order heavy items such as multiple water cases generally tip more. Most tips range between $2 and 5% of the order.

Instacart drivers also keep 100% of their tips. Previously, a percentage of tips was included in minimum earnings.

Note: When you onboard, beware of customers who bait you with unrealistic tips (e.g., a $100 tip on a $20 order).

Some do this to trap drivers into delivering orders quicker but refuse to tip upon delivery. Instacart has taken steps to curb this vice, including deactivating accounts that engage in this habit.

Instacart bonus

To incentivize good performance, Instacart rewards drivers who get five-star ratings and are on call during peak hours.

For clarity, this is how the incentives are categorized.

• Quality Bonus: given for every five-star review a driver receives.
• Peak boost: drivers receive this bonus when they work consistently during peak hours. Drivers can preview the bonus total on the shopper app before taking the order.

Mind the Expenses

What are some expenses you will incur as an Instacart driver, be it delivery-only or full-service? Let’s take a look.

Gas costs

As Instacart base pay doesn’t include gas coverage, drivers have to pay for gas themselves. And with gas prices fluctuating lately, managing how much you spend on gas is of great importance.

According to the American Automobile Association (AAA), the average cost of gas across the United States on July 14, 2022, was $4.605.

Vehicle insurance

Insurance costs are also a significant factor for Instacart drivers to consider. According to Bankrate, the average annual costs for car insurance are $1,771 per year, while the minimum coverage cost is $545 per year.

For an Instacart driver making an average of $10 to $17 per hour, this cost can pile up to unmanageable levels, so planning ahead is wise.

Vehicle purchase & registration fees

A functioning vehicle is one of the requirements for becoming an Instacart driver. So, if you want to become one but don’t have a vehicle or you haven’t registered it yet, these are some expenses you’ll have to incur.

According to Kelley Blue Book Edmunds, the average price of a new car in 2021 was $47,077, while the price of a second-hand vehicle was $28,205.

Conversely, the average car loan amount as of November 2021 was $35,163. This is a good alternative if buying one immediately is not possible.

Vehicle registration fees vary from state to state and are another expense you must keep an eye on.

Vehicle maintenance costs

If possible, the best way to maintain your car is to take it for servicing once it clocks the mileage recommended by your dealer or service station. This drastically reduces the possibility of the car breaking down when you are working.

According to Bankrate, the cost of a basic car inspection in 2022 ranges between $150 to $250.

Taxes

As already stated, Instacart drivers are independent contractors. Because of this, they are seen as self-employed and have to pay self-employment taxes.

The self-employment tax rate is 15.3%. It consists of two parts: 12.4% for social security and 2.9% for Medicare.

However, one major advantage that Instacart drivers have is that as independent contractors, they can write off certain business-related transportation expenses when they file their taxes.

For instance, you can write off the miles you drive when making deliveries.

Ways Instacart Drivers Can Increase Their Earnings

If the idea of making more with Instacart has crossed your mind, you can do so in the following ways.

Learn how to be an efficient shopper

One Instacart driver can make much more than another despite working for roughly the same amount of time. Why?

Quick thinking is a huge asset in this business. This includes knowing which orders to select, when to select them, and making fast deliveries.

Work during peak times of the day

The surest way to increase your average Instacart pay is to shop and deliver during peak hours.

Between Monday and Friday, most orders are placed from 4 p.m. to 8 p.m. If you accept orders and deliver during this time, you could earn quite a nice sum.

Select the bigger orders

Many Instacart drivers avoid bigger orders due to the time, distance, or labor considerations. But you can seize the opportunities and make more.

If you are an efficient shopper who makes every minute count, the opportunities are there for the taking.

Avoid making mistakes

Another important tip is that you might want to avoid mistakes that will waste your time or prevent you from making as much as possible. Such mistakes include:

• Shopping for the wrong items
• Failure to confirm the correct delivery destination
• Parking in a tow zone

Payment Methods

There are two payment methods that Instacart drivers can choose from:

• Direct deposits
• Instant cashout

Direct deposit

The company makes direct deposits to drivers’ bank accounts every Wednesday. If you haven’t already set up a direct deposit, the company will mail you a check.

Instant cashout

If drivers don’t want to wait until Wednesday to get paid,  the company allows them to withdraw their Instacart earnings to their debit cards. They can do that by using the cashout function on the Instacart app.

However, the option to cash out immediately attracts a $0.50 fee and is only applicable to earnings. Tips are paid via direct deposits.

Another notable thing is that drivers must complete five batches to access their cash on demand.

Location Matters

Due to factors such as affluence, demographics, and convenience, being an Instacart driver is more lucrative in some cities than in others.

How much does Instacart pay drivers in different states across the country? Let’s take a look at some pay averages as found on Indeed.

How much does Instacart pay in California?

Because California is the most populous state in the county with a high cost of living, Instacart delivery drivers in this state are paid more.

According to Indeed, delivery drivers in California make approximately $79,932 per year or about $42 per hour. Naturally, hourly rates are, on average, the highest in the LA area.

How much does Instacart pay in Florida?

Instacart drivers in Florida make about $59,866 a year, or close to $32 per hour.

While this is less than Californian Instacart drivers make, it is still above the national average. New York City, New York

How much does Instacart pay in New York?

Those who work as Instacart delivery drivers in New York earn approximately $75,382 per year or around $40 per hour.

As expected, drivers who deliver in the New York City area are paid the most.

How much does Instacart pay in Michigan?

Based on estimates on Indeed, Instacart delivery drivers in Michigan make about $64,141 per year or approximately $34 per hour.

While this is more than their colleagues in Florida receive, it is much less than the pay of Instacart delivery drivers in New York and California.

How much does Instacart pay in Massachusetts?

Last but not least — Massachusetts. Those who work as Instacart delivery drivers in this state make about $68,744 per year or approximately a bit over $36 per hour.

This may be less than delivery drivers in California and New York earn, but is still well above the national average.

What is evident from these pay averages is that Californian Instacart delivery drivers seem to earn the most. However, keep in mind that these pay averages usually include tips — you may not get paid by Instacart itself that much per hour.

Instacart Alternatives

Instacart isn’t the only gig company you can work for. There are other viable options too.

Instacart vs. Doordash

When it comes to Instacart alternatives, the first name that springs to mind is Doordash, the most popular delivery service by market share.

While in the same industry, these two companies differ in the types of services they provide. Whereas Instacart mostly deals with the delivery of groceries and household items, Doordash specializes in deliveries from sit-down and fast-food restaurants.

Therefore, Doordash orders tend to be smaller and more frequent than Instacart.
Moreover, while both companies offer bonuses for their successful drivers, those who work for Instacart seem to earn a bit more per hour.

Instacart vs. Shipt

Like Instacart, Shipt also delivers groceries and home products. However, it also delivers electronics.

Moreover, Instacart seems to pay its drivers a few bucks more. However, Shipt offers to pay a percentage of the order total if the tip amount is low.

Still, delivery persons of both companies are allowed to keep 100% of their tips. Additionally, both companies offer some form of bonus or incentive programs to their drivers.

Instacart vs. Uber Eats

Another solid option for freelance drivers is Uber Eats.

Uber Eats drivers mostly deliver restaurant food, but the service also offers delivery of a wide range of items such as liquor and groceries.

Additionally, while Instacart drivers can only deliver by car, Uber Eats drivers can also deliver by bike or on foot.

Lastly, efficient drivers of both companies can enjoy some bonuses and incentives. However, those who work for Uber Eats earn are on average paid less.

Instacart Pros and Cons

Instacart sure is a great solution for households. But from a driver’s perspective, what are the advantages and disadvantages of using the platform?

• Flexible schedule
• Higher hourly pay than competitors
• Potential to earn more if you select larger batches
• You can opt to receive payments daily or weekly
• Cost effective compared to ridesharing
• You keep 100% of your tips
• Drivers can earn perks like gas discounts and higher-paying batches with the Cart Star program

Cons

• You are responsible for operational costs like fuel and vehicle maintenance
• Independent contractor tax implications
• In smaller cities, batches aren’t as high paying
• If your shopper rating declines, you will struggle to get the best batches

Wrap Up

If you want to find out whether Instacart is a good company to work for, here’s one way to look at it.

Instacart’s pay is above minimum wage and slightly higher than what drivers earn from ride-hailing apps.

Instacart also has a record of owning up to its mistakes. Adjusting the minimum batch pay and letting drivers keep 100% of their tips are good examples of this.

But the biggest advantage has to be the convenience of setting your own working hours.

While it’s not perfect, making money with Instacart is easier than doing it on any other platform.

In fact, when compared to competitors, those who shop and deliver for Instacart are overall happier with their income. That’s a good reason to at least give it a thought.