Instacart Changes Its Default Suggested Tip For Drivers To 5 Percent


Instacart, the startup that will do your shopping for you and deliver it to your doorstep, announced news on Tuesday (April 24) that it has made tipping easier and simplified its service fee.

In a blog post, Instacart said that after feedback from customers and shoppers, it unveiled a new version of its checkout that makes it easier to tip and understand the service fee. Among the changes is a default suggested tip for the shopper of 5 percent, which can be changed at checkout or up to three days after the groceries were delivered. The company also changed the service fee to 5 percent from 10 percent and moved it from waivable to a fixed fee.

“The subtotal, service fee, estimated taxes and tip are easy to see and understand. We’ve also included more information on the definition of our service fee as well as an easy-to-navigate tip adjustment screen,” wrote Instacart on the blog post. “We are excited about this change because we think it’s a better experience for the Instacart community.”

The changes to checkout come at a time when Instacart has been raising money and boosting its valuation. About a month after Instacart raised $200 million in February, the grocery delivery platform reportedly notched another $150 million in funding. As a result, Instacart’s Series E round has now reached $350 million, with the company’s valuation now standing at $4.35 billion, TechCrunch reported.

“The online grocery market hit a tipping point last year, as more and more consumers demand grocery delivery,” Instacart COO/CFO Ravi Gupta said in a statement. “We are excited to accelerate our plans to bring online grocery everywhere and to keep transforming the way people shop.”

The round was led by Coatue Management, with participation from Glade Brook Capital and existing investors. Instacart plans to use the funding to double the size of its team and expand its footprint across North America, as well as to invest in new products and services. Before this latest funding round, Instacart — which is facing intense competition from Amazon now that the eCommerce giant owns Whole Foods Market — was reportedly valued at approximately $4.2 billion.



The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.