Instacart Is Publicly Valued At A Whopping $10 Billion — Here’s The 'Not-So-Rewarding Way' They ‘Thanked’ Their Staff
The drivers are the value at Instacart. Yet after receiving such good news, they turned around and slashed driver pay. Make it make sense.
@wfantry / TikTok; Alexander Raths / Shutterstock When founders invest in a startup, most of the time, their goal is to show proof that their business idea is profitable enough to eventually go public. To do that they need dedicated employees who believe in their mission, vision, and values.
Those people who work hard to get the business up and running hope to be part of the celebration and success when the company meets those goals.
One Instacart driver, William Fantry, who had stellar stats since joining the company, took to TikTok to share his numbers and his expectation that he was going to get a raise after the company was valued at $10 billion when they went public with its IPO (Initial Public Offering).
Instead, the news that he and other drivers received was a slap in the face.
Instacart was valued at a whopping sum after they went public, but drivers for the company were not rewarded.
Fantry started by sharing his excitement about the company's valuation and his hopes for how it would impact him.
"I wonder if there's going to be new perks for the workers," he asked while sharing an article related to the company's recent IPO. Then, Fantry shared several screenshots introduced with the phrase "Let's celebrate you: See your story," which he claimed were from Instacart detailing his delivery history and customer satisfaction record.
Photo: @wfantry / TikTok
Since starting there in June 2020, the height of the pandemic, Fantry had helped 2,420 households by delivering groceries right to their doorsteps. He had shopped for an astonishing 29,646 items from almost 40 stores, and those needy customers had shown their appreciation with 948 five-star ratings, 1,358 compliments, and 91 thank you notes.
His stats seem to be exactly what the company would want to push up their worth.
The proud driver guessed that such good performance would get him a raise or promotion, but he was dead wrong.
After Instacart assured him that they'd noticed his performance, Fantry just knew there was a reward coming his way. "That's not it?" he asked with giddy anticipation. At the least, he thought he'd receive a $2 per delivery raise, but instead, he shared an article where the company slashed driver pay from $7 per hour to $4 per hour, forcing them to rely heavily on tips to make ends meet.
Not only that, a cofounder by the name of Apoorva Mehta who owned 10% of Instacart stepped down as an executive chairman of the board during the IPO process, distancing himself from the company and pocketing $1.3 billion on his way out. Prior to that, he had worked as the company's Chief Executive Officer (CEO) up until August 2021.
It's easy to see these changes in a negative light, but it's complicated when companies go public.
Companies like Instacart saw their customer base and income skyrocket during the pandemic based on the inability for people to move about freely and do their own shopping. They were literally a lifeline for most Americans.
Because of the huge need for the services that they provided, it was estimated that they could go public and be valued at $30-40 billion, a far cry from the post-pandemic $10 billion valuation. The drop in delivery fees likely coincides with the unanticipated low valuation.
It should also be noted that it is not unusual for founders to step down from organizations after building them up to IPO status since that's the goal. Mehta himself explained that he was going to "do this again in another industry," something he is already in the process of with a healthcare startup called Cloud Health systems.
Many entrepreneurs see going public at the epitome of success and once they get there, their job is done and they move on.
It's easy to assume that a company is being greedy when they reduce pay for staff, and that is sometimes the case. But it should also be taken into consideration that we don't have all the financial information on the company, so we also may not have the context necessary to determine intent.
Ten billion dollars sound like a lot of money to many people, but when you consider the potential company budget along with the decreased estimated value, it's easy to understand why Instacart might be practicing more frugality these days.
NyRee Ausler, SHRM-SCP, SPHR is a writer and author from Seattle, Washington. She covers workplace issues using the experience garnered over two decades of working in Human Resources and Diversity, Equity, and Inclusion.