Instacart pays $150K to settle Seattle app-based worker pay violations

Delivery company Instacart has agreed to pay nearly $150,000 to settle alleged violations of Seattle’s app-based worker pay law.

According to the Seattle Office of Labor Standards (OLS), 846 Instacart workers were affected. The settlement includes back pay, interest, damages, and civil penalties.

“The law is clear, app-based workers who are picking up orders that start in Seattle are entitled to minimum payment,” OLS Director Steven Marchese said. “We are seeing this issue come up more frequently, which makes enforcement especially important. While we want to ensure all businesses are following the law, we also want to ensure workers know their rights and feel empowered to come forward if they believe they are not being paid what they are owed.”

The City of Seattle first learned of Instacart’s failings when the company did not provide the required minimum payment for orders picked up at two Seattle restaurants near the Shoreline border.

“App-based workers are a vital part of Seattle’s economy, yet many face barriers to accessing information about their rights,” Founder and CEO of Growing Contigo, José Manuel Vasquez, said. “Through our partnership with the Seattle Office of Labor Standards, Growing Contigo helps bridge that gap by delivering culturally relevant, language-accessible outreach and education directly in the communities where app-based workers live and work. We empower app-based workers to better understand their rights, navigate complex processes, and become educated about how to operate as an app-based worker.”

Instacart told KIRO Newsradio that once it identified the issue, it quickly corrected it.

“We identified that two stores located near the Seattle city boundary were inadvertently treated as outside the city for purposes of the App-Based Worker Minimum Payment Ordinance,” a spokesperson said in a statement. “As soon as we identified this issue, we proactively corrected it and paid the affected shoppers in full. We have since reached an agreement with the Seattle Office of Labor Standards to resolve this matter, and we remain committed to full compliance with the Ordinance.”

Instacart settles with FTC over deceptive practices but faces separate investigation into prices

Instacart paid $60 million in customer refunds last December under a settlement reached with the Federal Trade Commission over alleged deceptive practices.

The FTC said that Instacart has been falsely advertising free deliveries. The San Francisco-based company isn’t clearly disclosing service fees, which add as much as 15% to an order and must be paid for customers to receive their groceries, the FTC said.

Instacart has also failed to clearly disclose that customers who enroll in a free trial for its Instacart+ program will be charged membership fees at the end of the trial. The FTC said hundreds of thousands of customers have been charged but have received no benefits from memberships or refunds. Instacart+ offers members free deliveries on most orders for $99 per year.

The FTC said Instacart also advertises a “100% satisfaction guarantee,” but customers who experience late deliveries or unprofessional service typically receive only a small credit that can be used toward a future order, not a refund.

“The FTC is focused on monitoring online delivery services to ensure that competitors are transparently competing on price and delivery terms,” Christopher Mufarrige, the director of the FTC’s Bureau of Consumer Protection, said.

Instacart denied the FTC’s allegations of wrongdoing Thursday but said it reached a settlement in order to move forward and focus on its business.

Contributing: The Associated Press

Follow @http://twitter.com/Mynorthwest