A new crowdsourced report finds that the algorithm for shopping delivery platform Shipt has led to reduced pay for 40 percent of its workers.
First reported by Gizmodo, the report from Coworker.org, a pro-labor nonprofit organization that helps workers organize, gathered screenshots from more than 200 Shipt workers — who the company calls shoppers — in 140 different US metro areas. The screenshots showed more than 40 percent of the workers saw a reduction in pay; following the rollout of Shipt’s “V2” pay model. The so-called “effort-based” pay model replaced Shipt’s previous flat-fee model.
The Coworker.org team worked with PhD student Dan Calacci at the Massachusetts Institute of Technology to analyze the information it had collected; and found that the workers who reported lower wages were making 11 percent less than they did under the previous pay structure.
Shipt began testing the new pay model last year and announced in July it would be introducing it into more markets. The company said at the time that the V2 model “better accounts for the effort it takes to shop; and deliver orders. Simply put, we want pay to reflect the efforts shoppers are putting into each order; not the monetary value of the items in the order.”
So if there are two Shipt orders totaling $100, and one order has 35 items; but the other only has three, the Shopper for the first order would be paid more, according to Shipt. The new system also takes into account factors like drive time; location; and also peak shopping times, the company says.
Shipt customers pay a monthly fee to subscribe to the shopping service, which Target acquired in 2017. In the second quarter of 2020, Target’s same-day services, which include Shipt, rose 273 percent; contributing to an 80 percent increase in profits year over year for the retailer.