Instacart Adds Another NYC Delivery Fee For Customers, Blames City’s New Mandatory Tipping
Instacart has started adding a new surcharge to grocery orders placed by New York City customers, introducing what it calls a “regulatory response fee” shortly after new delivery worker regulations went into force this week, according to The New York Post.
The new charge appears directly in customers’ order summaries, with Instacart’s website now stating, “NYC regulatory response fees appear in the order summary.” The company explains that the fee “helps cover increased operating costs in NYC due to government regulations on delivery platforms,” language that was not present on the site as recently as last month.
An analysis by The Post found that no such fee appeared on Instacart orders before Monday. By Tuesday, however, customers placing orders between $35 and $184 were seeing an added charge of $5.99.
Instacart confirmed that the fee went into effect Monday and pointed the finger at city lawmakers. In a statement to The Post, the company blamed “the City Council’s misguided and burdensome grocery delivery laws.”
“For months, we raised clear, data-backed concerns that the policy would increase grocery delivery costs for New Yorkers, but those warnings were repeatedly ignored,” the statement said.
A spokesperson for the New York City Department of Consumer and Worker Protection said the agency is looking into the matter.
The added fee comes as Instacart is already facing scrutiny following a report last month that accused the company of using an opaque algorithm that allegedly charged different customers different prices for the same items without disclosure.
The new city rules, which took effect Monday, significantly expand protections for grocery delivery workers, including higher minimum pay for drivers working on platforms such as Instacart. Under the law, drivers must earn at least $21.44 per hour before tips, with scheduled increases in future years.
The legislation also requires food delivery apps, including Uber Eats and DoorDash, to present customers with a tipping option before checkout, setting the default gratuity at no less than 10% of the order total.
Earlier this month, the Mamdani administration accused Uber Eats and DoorDash of costing delivery workers more than $550 million in tips by previously requiring customers to add gratuities only after completing checkout.
City officials argued the new approach was necessary to safeguard workers’ earnings, particularly after tips reportedly dropped following the introduction of a new minimum-wage rule in late 2023.
Uber Eats and DoorDash sought to block the law in federal court, claiming the city violated their free speech rights by forcing them to “speak a government-mandated message in a prescribed manner and at a prescribed time.”
The companies also contended that the higher minimum pay requirements have driven up delivery costs in New York City and warned that the new regulations — along with “tipping fatigue” and “generally rising prices” — would negatively affect their profits.
U.S. District Judge George B. Daniels rejected that challenge in a decision issued Friday. Shortly thereafter, Instacart’s new regulatory fee began appearing on customer orders.
{Matzav.com}
