When her regulars abruptly stopped tipping, Erika, a Shipt delivery driver in Georgia, knew something was amiss.
Some customers told her the option disappeared from their app. Others sent images showing $30 or $40 gratuities, but when Erika logged into her account, she found zeros. It took weeks, she says, for the company to sort it out and turn over more than $100 in tips — nearly a day’s wages. Hundreds of her colleagues have recounted similar experiences.
“I’m working 40, 50 hours a week doing deliveries, and now I’m having to spend all of this time chasing down tips that I earned,” said Erika, who asked to be identified by her first name only out of fear of losing her job. “We’re just as essential as in-store employees, but we’re not being treated that way.”
Gig workers who handle in-store shopping and home delivery say they make most of their money through customer gratuities, and the recent disruptions reflect the emerging two-tier employment system at Shipt’s parent company, Target. Although Shipt deliveries helped drive much of the retailer’s record growth during the coronavirus crisis, its workforce is not guaranteed a minimum wage, sick leave or other benefits afforded Target employees, who start at $15 an hour and collected $200 bonuses early in the pandemic.
Instacart, DoorDash and other gig companies backed by venture capital have faced class-action lawsuits and regulatory crackdowns for misappropriating workers’ tips. But Shipt shoppers are unique in their connection to one of the nation’s largest retailers.
That the two workforces have overlapping duties — fulfilling, bagging and ringing up orders — only underscores the divide. Shipt workers have the added task of delivery, using their own vehicles and gas, and shouldering any potential liabilities, such as car accidents or parking tickets.
In interviews, gig workers nationwide say that months of complaints about tip problems have yet to get a response from Shipt or Target alerting shoppers to the issue. Images of receipts and customer service exchanges with Shipt and Target viewed by The Washington Post show examples in which the tip option was unavailable on the Shipt app or Target.com; instances where tips added by customers were not sent to workers; and changes to the company’s pay algorithm that lowered income, such as changing in-app tipping defaults from 5, 10 or 15 percent to $5, $10 or $15 on certain orders.
Molly Snyder, a Shipt spokeswoman, said an internal glitch affected tips on a small percentage of orders nationwide in June and July. The company, she said, is looking into the source of the problem and has returned tips on the “few hundred” orders that were affected.
Target sales fulfilled by Shipt more than quadrupled in the first quarter of 2020 as homebound Americans became more reliant on delivery services to fulfill basic needs. Minneapolis-based Target bought the grocery delivery service in late 2017 for $550 million and supercharged its growth. Its fleet of independent contractors is up tenfold, to more than 200,000. The retailer, by comparison, has more than 350,000 employees.
Labor economists say skyrocketing unemployment rates have led to a surge in gig workers during the pandemic, as laid-off Americans look for ways to make ends meet. Platforms such as Shipt, they say, often promise quick — and easy — access to work, although they come with few protections. Shipt workers rely on tips for the bulk of their income, and say that missing even one or two gratuities can determine whether they can afford groceries for the week.
“One of the upsides of gig work — and there aren’t many — is that there are relatively low barriers to entry, so people can start picking up work right away,” said Erin Hatton, a sociology professor at the University at Buffalo who studies labor issues. “The downside is that companies are increasingly relying on these workers and using them to replace permanent, benefits-earning, minimum-wage employees, which is always a problem when groups of people are shut out of standard employment protections.”
Snyder, the Shipt spokeswoman, says the company offered pandemic bonuses of $50 to $200 to some workers, and is providing protective equipment including masks, hand sanitizer and disinfecting wipes. Shipt shoppers can also apply for two weeks of paid leave if they’ve tested positive for the coronavirus or have been ordered to quarantine. Jill Lewis, a spokeswoman for Target, declined to comment.
In some parts of the country, Shipt recently transitioned from one algorithm — which paid $5, plus 7.5 percent of the order total — to a more opaque one that shoppers say changes by the day. So an 80-item order that might have netted $50 now pays closer to $20.
Snyder said the new payment structure accounts for such variables as traffic patterns, the time of day and the complexity of an order. The average Shipt order, she said, pays $21, including tips, and has remained “generally stable” under the new system. She said the average shopper fills nearly 15 orders a week, earning about $305.
“The bottom line is: We’re replaceable,” said Erika, the Shipt worker in Georgia. “We shouldn’t complain, because there’s always somebody who is willing to take our place.”
Black box algorithms and shifting policies around pay can make it challenging for workers to even identify a problem. Shipt workers who reported missing tips in recent months say it took multiple email exchanges before they received more than a boilerplate response.
Workers use Facebook groups such as the Shipt List to compare notes and say they have repeatedly asked the company for answers.
“The issue with the tips — even if it’s not nefarious — we’ve been yelling about it for months,” said Willy Solis, a Shipt shopper who is leading a campaign for better working conditions through a group called Shipt Shoppers and recently joined Gig Workers Collective, a worker-run organization fighting for fair pay across companies. “It has become neglect on their part.”
Solis says he has heard from thousands of Shipt workers who have faced tipping issues during the pandemic.
Customers, too, say they have had trouble making sure their tips are properly paid. After Beth Greenwald, a TV producer in Los Angeles, was unable to tip her Shipt driver by app, she spent three weeks calling customer service, posting angry tweets, and exchanging dozens of direct messages and emails with Shipt and Target representatives, according to copies of the messages she shared with The Post.
Greenwald ultimately sent $30 to the shopper’s personal Apple Pay account because Shipt and Target said their systems did not have a way to address the issue, she said.
“I did what I was supposed to do, which is stay home,” said Greenwald, who used Shipt while in state-ordered quarantine during a visit to New York. The driver “did her job, which was to put herself essentially at risk. Now, through no fault of her own, she’s not going to get this tip? That bothered me. This is ridiculous. I don’t know why this is so hard.”
When the pandemic hit in mid-March, Karyn Johnson-Dorsey began seeing Shipt orders come in by the hundreds. There was no shortage of work — “in a good way,” she said. But soon she began seeing other changes: The company introduced a new payment system, which resulted in lower wages for the same amount of work.
“The bottom line is: You’re getting paid less and less,” said Johnson-Dorsey, 56, who stopped working for Shipt in June. “There really isn’t any rhyme or reason to it, to be honest with you. And then on top of that, you add this tipping issue, and you feel like you just can’t trust anything.”
It took weeks, she said, for the company to send out any protective gear to its drivers. She finally received a small box filled with 10 disposable masks and a bottle of hand sanitizer in May.
“It really isn’t fair,” she said. “Target is one of the few retailers that has made money during this pandemic, and it feels like they’re doing it by taking advantage of us.”