See what’s clicking on FoxBusiness.com.
New Yorkers who rely on the convenience of grocery delivery were blindsided this week when Instacart slapped a new fee on orders, a move the company is taking in line with a sweeping city ordinance that took effect Monday.
Customers will now pay a flat additional fee of $5.99 at checkout, called the “Regulatory Response Fee.”
According to the city’s website, app-based messengers who deliver groceries through third-party platforms, such as Instacart, are now entitled to pay at least $21.44 an hour — the same amount paid to restaurant delivery workers, including Uber Eats and DoorDash, starting in April 2025.
The labor protection measure is scheduled to raise the minimum wage to $22.13 an hour in April, citing inflation. Previously, there was no statutory minimum specifically for grocery delivery workers.
INSTACART’S AI PRICING MAGIC COSTS SOME SHOPPERS, STUDY SAYS
A delivery worker picks up Wegmans bags outside a store in New York, US, on Thursday, August 8, 2024. (Yuki Iwamura/Bloomberg via Getty Images/Getty Images)
“The response fee is a direct result of the City Council’s flawed and burdensome regulations, which went into effect this week,” an Instacart spokesperson told FOX Business on Wednesday.
“For months, we raised clear, data-based concerns that the policy would increase the cost of grocery delivery for New Yorkers, but those warnings were ignored. At a time when the local budget was already under pressure, the City moved forward with a policy that made food more affordable and harder to reach for New Yorkers who rely heavily on grocery delivery.”
INSTACART ALLOWS $60M TO CUSTOMER REFUNDS AFTER FTC ACCUSES COMPANY OF HIDDEN BILLS AND FORCED REGISTRATIONS
Whole Foods grocer Jason Ellsworth calls out groceries as an Instacart shopper checks his smartphone for items ordered. (Robert Gauthier/Los Angeles Times via Getty Images/Getty Images)
In the app release, Instacart also noted that the new revenue “helps cover the increased costs of operating in NYC due to government regulations on delivery platforms,” according to a social media post.
In addition, the law requires delivery services to offer customers the option to tip before checkout, setting the default tip at 10% of the order cost. The city said the measures are aimed at addressing practices that hide or delay tips, which the city estimates “cost workers more than $550 million.”
While tipping has always been optional at the location, Instacart reportedly emphasized at checkout that “tips are optional. NYC law guarantees delivery drivers a minimum hourly rate.”
PRICES GOING UP AND COSTS GOING UP, NEW DOORDASH REPORTS APPEAR
A look at Instacart’s scanning and payment technology. (Instacart / Fox News)
Starting in 2024, Instacart issued several warnings while the move was being considered, saying the new law would cause grocery costs to “surge” and limit access to delivery services.
Former Mayor Eric Adams, who voted for the measures last year while in office, also expressed concern at a time when many New Yorkers — especially seniors, SNAP or EBT recipients, and people with disabilities — already face food insecurity. The city council finally overrode Adams’ veto last September.
| A ticker | Security | Finally | Change | Change % |
|---|---|---|---|---|
| AN ANCIENT | Company MAPLEBEAR INC | 37.82 | -0.14 |
-0.37% |
New Yorkers quickly blasted the company’s new lawsuit on social media this week.
“Instacart’s charging/discounting the buyer’s control fee because the rules were passed that you have to give YOUR contractors a raise is too low,” one user wrote on X on Monday. “As if the service charges you charge sponsors and vendors aren’t enough.”
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Some customers noted that they have already canceled or plan to cancel their membership following the price increase.
“Adding money in the middle of my contract … with stated fees should be illegal,” one user said on Reddit on Tuesday.
FOX Business contacted the city’s Department of Consumer and Labor Protection for more information.
