B.C. shopper vows to never use Instacart again after exorbitant fees: 'Taking advantage of people'

A B.C. shopper who "caved and used Instacart for a delivery" has vowed to never use the service again after being shocked by the number of fees and taxes. A viral Reddit post on this experience has sparked conversation, including more than 200 comments, around pricing in the face of gig workers' rights.

The user SparaxisDragon shared their receipt of a recent transaction. Their subtotal was just under $60. After service and delivery fees, and a "regulatory response" fee of $5.99, the grand total ballooned to just under $86.

In early September, B.C.’s NDP government began implementing regulations around minimum-wage and basic protections for gig workers at various app-based services, like DoorDash, Uber and Instacart.

It’s the first province in Canada to enact this policy.

According to Instacart, that fee is “imposed in order to help cover increased operating costs in a market, as a result of local laws and regulations." The Reddit user called that "corporate weasel speak" for "the B.C. government makes us pay drivers a half-decent wage, but we're going to pretend it's [government] overreach], something something, regulation bad."

While the pile-on of fees might discourage some customers from using delivery services, one expert says some shoppers are forced to rely on these apps, regardless of how unaffordable they may be.

'It's predictable and it does suck': Expert on service fees

Vass Bednar is the executive director of the Master of Public Policy program at McMaster University. She says that it appears a gap in gig-workers’ wages are being passed onto consumers through the regulatory response fee Instacart is charging.

“It’s predictable and it does suck,” she tells Yahoo Canada. “But for a long time, these companies were offset by venture capitalists' money. They were highly subsidized but these services were affordable. And it wasn’t because they should be, it’s because they could be, to gain that market share.”

The regulatory response fee doesn’t fall under what is known as junk fees or drip pricing, because companies are transparent in what the fee is used for.

Junk fees are tacked on fees, either small or large, which result in making a product or service pricier. Under that umbrella, drip pricing is a advertising a price that is "unattainable" due to additional charges or fees that cannot be waived for a product or service.

In June 2022, Competition Bureau Canada made drip pricing illegal.

Bednar says it’s important that gig workers in B.C. get a living wage, but there are more issues at play.

“This is a bigger conversation wrapped up in gig worker rights, appropriate pricing, venture capitalism and the future of work,” she says. “The regulatory response fee is an interesting vehicle to consider those things.”

'You're taking advantage of people': Expert

While sitting on the Ontario Workforce Advisory Committee, Bednar worked for Instacart to understand what it’s like “to have an algorithm for a boss.”

The service wasn’t used exclusively by those who could afford it, she learned. Many people in lower income brackets relied on the service, like those with disabilities or without means of transportation.

“In that way I saw a service like Instacart does help accessibility for people,” she says. “So you’re taking advantage of people who can pay and aren’t reading the fine print, and also, new families.”

In the comments of the Reddit post, several users recommended cheaper alternatives to Instacart, such as Walmart’s delivery service, which charges a monthly fee of $9 for unlimited deliveries with a minimum purchase of $35.

Bednar says there’s power in taking these matters to social media, but she hopes more is done from higher levels of government.

“That kind of consumer power is really important but I’d like to see consumer protection authorities work more effectively with the Competition Bureau on this kind of stuff,” she says. “You’re supposed to take your business elsewhere, but that doesn’t change the structural inequality that’s happening.”