Updated Pay Model
We know that 5-star service takes a lot of care and effort. That’s why we have evolved our pay model to better align shopper compensation with the work that goes into each shop.
Why did Shipt update the pay model?
Since we launched in 2014, we have learned a great deal about compensation and how external factors may influence the shopping experience. We updated our pay model to better account for the actual effort it takes to complete and deliver orders.
How does the updated pay model work?
The updated pay model takes into account dynamic variables such as estimated drive time, total order items, time of day, and road traffic to pay for the effort and work completed. In our updated model, this means that some orders may pay out differently, as all payments will now better account for the effort required to complete. Orders that seem similar at first may actually be very different experiences.
Here are a couple of examples:
- An order with a 15-minute drive in a busy metro is likely to pay more than a similar-sized order with a 2-minute delivery drive during a quieter shopping time. Since the first order likely requires more effort to complete in terms of shopping and delivering, pay for that order will reflect that.
- One order contains 5 items. Another order contains 60 items. Shopping for 60 items takes more effort than one, so the new pay model would take that into account.
- An order with 20 unique items likely requires more effort to shop than an order with 20 of the same item, so the new pay model would take that into account.
In this updated model, you’re always guaranteed the minimum shown in the estimated pay range. Even if items are out of stock or if a high dollar item is unavailable, you will still make at least the lowest end of the estimated pay that was offered to you if you successfully complete the order. Consider these examples of how this may benefit you:
- If rotisserie chickens are out of stock or still being cooked, this won’t impact your pay!
- If a high-priced item is out-of-stock, thus reducing the total cost of the order, this won’t impact the minimum payout you are guaranteed when accepting and successfully completing the order.
How do you know how long it will take to drive and shop?
We have been able to gather a lot of data and learn a lot since Shipt Shoppers first began serving customers nearly six years ago. That data helps inform the estimated shopping times. In addition, we use advanced mapping technology providers to give real-time estimated drive times.
Is there a formula for how Shipt calculates pay?
There isn’t a formula that can be shared because each metro has unique characteristics that can affect the shopping experience. Shipt aims to provide market competitive compensation in each metro, which means similar orders in size and estimated drive time may pay out differently in various areas of the country.
How will I know how much money I will earn for each order?
As always, the offer card will display an estimated pay range for successfully completing the order. You are guaranteed at least the minimum of the estimated pay range for successfully completed orders, regardless of the changes to the order. The pay is shown as a range because it can change if the order changes. Your pay most likely will lie somewhere in the middle of this range if there are no or few changes to the order.
Is it still possible to earn promo pay in this model?
Yes, promo pay still can apply to qualifying orders. However, it will be included in the estimated pay range for these orders instead of being listed separately. There will be a banner on the offer card that indicates if promo pay applies to the order.
As a reminder, promo pay can vary by day and by metro and does not apply to every order.
Does the updated pay model account for items added to the order?
We adjust pay if a member adds item to the order after submitting it to Shipt. Because pay is based on effort rather than the value of the order, the increase in pay will correlate with the increased effort required to shop and deliver those additional items. That means you likely will see a higher increase in pay if the member adds 20 items compared to two, regardless of the cost of the added items. You will see the increased pay reflected in your delivery history after the order is delivered.
Does the estimated pay range in this model include tips?
Tips are not included in the pay estimate. Shoppers will receive 100% of their tips on top of the order pay.
How can I determine whether an order is worth my effort?
The offer card for each order includes the following information:
- The items in the order
- The estimated time to shop and deliver the order
- The delivery address
- The pay range with a guaranteed minimum of what you can expect to make if you successfully complete the order (before tips)
We encourage you to look at the guaranteed minimum of the pay range, the estimated amount of time it will take to shop and deliver the order, and the items in the order. As always, you have the option to claim or decline offers*.
*Note: As long as you claim at least one order for each hour you’re on the schedule you’ll maintain a high Acceptance Rating.
Does pay for Delivery Only orders change in this model?
We have recently announced that we are rolling out nationwide our effort-based pay model. Since our Delivery Only shops do not involve shopping the order, these orders take variable effort so the pay structure is different. We are moving to a variable based model taking into account the metro, wait time, and drive time.
What has Shipt learned from its initial tests?
The early tests helped us identify ways to make the shopper experience better. For example, we added the ability to preview the order upon offer so shoppers can have a better understanding of the items (both item type and quantity) in each order.
Other key learnings and observations include:
- We saw the number of active shoppers increase in all metros where the new pay model was active, indicating that offers continue to be attractive to shoppers
- We also observed an increase in on-time deliveries in most metros, a benefit to both our shoppers and customers
Myths vs. facts about Shipt’s pay model
We know many shoppers have had questions as we have introduced the updated pay model to various metros. We hope the information below will help clarify some common misconceptions.
Myth: Shipt is not being transparent with the updated formula/algorithm.
Fact: Shopping in Birmingham, Alabama is different from shopping in Los Angeles, California, just like shopping in Indianapolis, Indiana is different from shopping in New York City. There is no single formula as our pay model takes several location and situation-specific factors into account.
Myth: Shoppers earn less on the updated pay model.
Fact: The updated pay model takes into account the many factors, such as estimated drive time, the number of items in the order, and location, that can affect the effort needed to shop and deliver an order. This means that some orders may pay out differently than before since payment is based on effort and not on the retail value of the order.
While some orders may pay more and others pay less in the updated model, we have seen average base pay levels remain consistent overall, and slightly higher in some markets, where we have tested this model.
In June 2020, we identified a technical issue that resulted in a small number of orders having the potential for lower estimated pay ranges, and we fixed the issue.
Myth: Shopper pay is not adjusted when a member adds items to the order.
Fact: Shipt does adjust pay if a member adds multiple items to the order after submitting it to Shipt. Because pay is based on effort rather than the value of the order, the increase in pay will correlate with the increased effort required to shop and deliver those additional items. That means shoppers likely will see a higher increase in pay if the member adds 20 items compared to two, regardless of the cost of the added items. Shoppers see the increased pay reflected in their delivery history after the order is delivered.
It’s worth noting that in this updated model, shoppers always are guaranteed at least the minimum of the estimated pay range for each order that is successfully completed. Even if a member removes items from the order or the shopper finds that several items are out of stock at the store, the shopper knows pay will not drop below the minimum in the pay range.
Myth: Shipt is changing its pay model during a pandemic to make more money off shoppers.
Fact: Our commitment to shoppers is stronger than ever, and any operational changes we make balance the interests of shoppers with the longer-term needs of the business. We’ve invested, and continue to invest, tens of millions of dollars in the shopper community in recent months, ensuring shoppers receive personal protective equipment, financial assistance and bonus pay during uncertain times.
Our goal is to maximize shoppers’ earning potential and ensure they get the best value or compensation for their effort. The updated pay 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.