Instacart’s service fees in California are going up from 5% to 8%, the company announced Friday, making it the last major gig company to raise prices in response to Proposition 22, the recently passed state ballot measure keeping gig workers independent contractors, while providing some additional benefits.... [+]Key Facts
The increased service fee, which won’t apply to customers who have Instacart’s monthly or annual subscription service, will help cover the cost of driver benefits enshrined in Prop.
Postmates, Uber, Lyft and Doordash have all introduced small fees they say are necessary to pay for Prop. 22 benefits in California. is charging between 50 cents and $2.50 per order; Uber is attaching a $1.50 fee for rides and $2 for food delivery; Lyft’s fees are 30 cents to $1.50 based on location and Doordash is charging higher service fees.Labor advocates say gig companies raising prices is a “corporate bait and switch.” Gig companies argued that making drivers employees would raise prices, but fees are still going up anyway. “Now that Prop.
“Customers have been experiencing artificially low prices because of venture capital subsidies,” Dubal told. “We’ve known for a long time that service fees were going to have to go up because the entire business model is based on capturing the market, addicting consumers to the service and then raising fees.” Uber CEO Dara Khosrowshahi has called Prop. 22, which went into effect in December, the “third way” to classify drivers.
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