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It’s a Ballot Fight for Survival for Gig Companies Like Uber

OAKLAND, Calif. — By late August, the urgency was becoming clear. Top executives of Uber, Lyft and the delivery service DoorDash met to discuss a California ballot measure that would exempt them from a new state labor law and save their companies hundreds of millions of dollars.

The survival of their businesses was on the ballot.

Days later, political strategists responded to the executives’ concerns by telling the companies, which had already pledged $90 million to back the measure, that they needed to spend a lot more if they wanted to win, said three people familiar with the discussions, who were not allowed to talk about them publicly.

The fight over the ballot measure, Proposition 22, has become the most expensive in the state’s history since then, with its backers contributing nearly $200 million and 10 days still to go until the Nov. 3 election. Along the way, the companies have repeatedly been accused of heavy-handed tactics; a lawsuit filed on Thursday claims Uber is coercing the support of its drivers.

Despite the big spending and a barrage of television advertising, only 39 percent of likely voters said they supported Uber and Lyft in a poll last month by the University of California, Berkeley, while 36 percent opposed their proposal and others were undecided. People close to the campaign said they would want to see close to 60 percent approval in polling before they could breathe a sigh of relief.

The ballot measure, which is also being backed by Instacart and a delivery company that Uber is acquiring, Postmates, could be a harbinger for gig companies in the rest of the country.

Prop 22 would exempt the companies from complying with a law that went into effect at the beginning of the year, while offering limited benefits to drivers. The law is intended to force them to treat gig workers as employees, but Uber and its peers have resisted, fearing that the cost of benefits like unemployment insurance and health care could tip them into a downward financial spiral.

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Credit…Tag Christof for The New York Times

Though Uber and Lyft, for example, are publicly traded companies with a combined worth of $70.5 billion, they have never been profitable. They lose billions of dollars each year, and the pandemic has made turning a profit even more difficult. DoorDash, which has filed to go public, has also struggled. Analysts estimate that complying with California’s gig-worker law could cost Uber, which lost $1.8 billion in its most recent quarter, as much as $500 million a year.

Uber said it planned to cut off work for the approximately 158,000 California drivers who were active on the platform each quarter if its ballot measure failed. It would employ roughly 51,000 remaining drivers, it said, and raise fares to meet the higher business costs.

The ballot fight gained additional urgency Thursday evening when the California First District Court of Appeal ruled that Uber and Lyft must treat their California drivers as employees under the new labor law. The state attorney general and the city attorneys of San Francisco, Los Angeles and San Diego had sued the companies in May to enforce the law.

“If Prop 22 does not win, we will do our best to adjust,” said Dara Khosrowshahi, Uber’s chief executive, in a Wall Street Journal interview this week. “Where in California we can operate is a question mark, and the size and scale of the business will be substantially reduced.”

In past dust-ups with local regulators, Uber rallied its passengers for support. The pandemic has made that difficult, so it has urged its tech employees to get involved and used its app to reach out to drivers for support.

The Yes on 22 campaign also started an effort to organize drivers, a move copied from the labor groups that have long tried to organize drivers to fight for better working conditions. And it has forged relationships with high-profile advocacy groups, like Mothers Against Drunk Driving and the California chapter of the N.A.A.C.P.

“Drivers want independence plus benefits by a four-to-one margin, and we’re going to fight for them,” said Julie Wood, a spokeswoman for Lyft. “We believe California voters are on the side of drivers, too.”

A spokesman for DoorDash, Taylor Bennett, said, “Our support for Prop 22 is part of our commitment to protecting the economic opportunity that tens of thousands of Californians value and the access to delivery that so many restaurants rely on, especially at such a critical time.”

A spokeswoman for Instacart declined to comment. Postmates did not respond to a request for comment.

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In an effort to gain support, the companies have bombarded riders and drivers with push notifications, campaign ads that appear in their apps and emails promoting Prop 22. Before logging on to start work, Uber drivers have been presented with a slide show of warnings about how their lives could change if the proposition fails.

“A no vote would mean far fewer jobs,” one of the slides on the Uber app warned. “That’s why we’re fighting so hard to win.”

In the lawsuit filed against Uber on Thursday, drivers claim that the messages violated a state law that forbids employers to coerce their employees to participate in political activity.

“I can’t rule out that employers have engaged in coercive tactics like this in the past, but I have never heard of an employer engaging in this sort of barrage of coercive communications on such a broad level, ever,” said one of the attorneys for the drivers, David Lowe, a partner at Rudy, Exelrod, Zieff & Lowe. “It is such an extraordinary thing, from my perspective, for Uber to exploit this captive audience of workers.” Mr. Lowe said he opposed Prop 22.

Matt Kallman, an Uber spokesman, said, “This is an absurd lawsuit, without merit, filed solely for press attention and without regard for the facts.” He added, “It can’t distract from the truth: that the vast majority of drivers support Prop 22.”

In early October, the Prop 22 campaign was denounced by Senator Bernie Sanders after a fake progressive group calling itself Feel the Bern endorsed the proposition in a campaign flier that implied Uber had the backing of progressive leaders. The mailers were, in fact, sent by a firm that creates political mailers representing different views.

“The Prop 22 campaign is working hard to reach voters across the state and the political spectrum to ensure they know that drivers overwhelmingly support Prop 22,” said Geoff Vetter, a spokesman for the Yes on 22 campaign, which is funded by Uber, Lyft, DoorDash and other gig economy companies.

Questions have also been raised about the N.A.A.C.P. endorsement. A political consulting firm run by Alice Huffman, the leader of the California N.A.A.C.P., has received $85,000 from the gig companies’ campaign, public records show. The payment was reported earlier by the news site CalMatters.

Mr. Vetter said the payments were for “outreach.” The N.A.A.C.P. did not respond to a request for comment.

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Credit…Jim Wilson/The New York Times

Uber held an all-hands meeting this month for employees to meet drivers who support the proposition, and sent several emails encouraging staff to lobby friends and family.

Although the internal messages were upbeat, the policy staff raised concerns with campaign consultants during the meetings in late August and early September, the people familiar with those meetings said. Among their worries: that the ballot language was unfavorable to the companies, and that people were voting earlier than usual because of the pandemic, meaning advertising would need to be rapid and aggressive.

“We look at the data every day, and our metrics show a tight race,” Justin Kintz, Uber’s head of public policy, said in an early October email to Uber employees, obtained by The New York Times. “At the same time, with continued strong execution against our plan, we’re confident we can win.”

While the email noted that campaigning was optional, Mr. Kintz encouraged employees to participate in texting banks to contact voters and to promote the campaign in conversations with friends.

“The big reason that you’re seeing so much spending is because of the high stakes in this election,” said Mr. Vetter, the spokesman for the campaign. “Hundreds of thousands of jobs are on the line. These are services that millions of Californians rely on.”

The opposition campaign, which is funded by labor unions, has raised about $15 million. Supporters of the No on 22 campaign have argued that voters should reject the push by tech companies, and that the measure would harm workers already at a disadvantage during the pandemic.

“Proposition 22 will make racial inequality worse in California at the worst possible time,” said Representative Barbara Lee, a California Democrat. “You have very clearly crossed the line when you try to claim the equity mantle for a campaign that has always been about allowing multibillion-dollar app companies to write their own law so that they can keep exploiting the labor of drivers, eight in 10 of whom are people of color.”

No matter the outcome of the vote, the gig companies and their opponents are likely to take their campaigns to Washington. Massachusetts has filed a lawsuit similar to the one that the California court decided on Thursday evening, and Uber hopes to avoid continued state-by-state battles by pressing for federal legislation.

Erin Griffith and Noam Scheiber contributed reporting.

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Khosla Ventures seeks $1.1 billion for its latest fund

Khosla Ventures, the eponymous venture firm helmed by longtime Silicon Valley rainmaker, Vinod Khosla, is raising  $1.1 billion for its latest venture fund, according to documents from the Securities and Exchange Commission.

The filing was first spotted by Ari Levy over at CNBC.

Khosla, whose investing career began at Kleiner Perkins Caufield & Byers (back when it was still called Kleiner Perkins Caufield & Byers) is rightly famous for a number of bets on enterprise software companies and was a richly rewarded co-founder of Sun Microsystems before venturing into the world of venture capital.

Like his former partner, John Doerr, Khosla also went all-in on renewable energy and sustainability both at Kleiner Perkins and then later at his own fund, which he reportedly launched with several hundreds of millions of dollars from his personal fortune.

Over the years Khosla Ventures has placed bets and scored big wins across a wide range of industries including cybersecurity (with the over $1 billion acquisition of portfolio company Cylance), sustainability (with the Climate Corp. acquisition), and healthcare (through the public offering of Editas).

And the current portfolio should also have some big exits with a roster that includes: the unicorn lending company, Affirm; the nuclear fusion technology developer, Commonwealth Fusion Systems (maybe not a winner, but so so so cool); delivery company, DoorDash; the meat replacement maker, Impossible Foods; grocery delivery service, Instacart; security technology developer, Okta; the health insurance provider, Oscar; and the payment companies Square and Stripe .

That’s quite a string of unicorn (and would-be unicorn) investments. And it speaks to the breadth of the firm’s interests that run the gamut from healthcare to fintech to sustainability and the future of food.

Khosla will likely benefit from the surge of interest in investments that adhere to new environmental, social responsibility and corporate governance standards.

There are billions of dollars that are looking for a home that can invest along those criteria, and for the last 16 years or so, that’s exactly what Khosla Ventures has been doing.

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Daily Crunch: Waymo opens up driverless ride-hailing

Alphabet’s self-driving technology company hits a major milestone, Apple TV+ extends its free subscription period and Affirm files to go public. This is your Daily Crunch for October 8, 2020.

The big story: Waymo opens up driverless ride-hailing

Waymo hit a major milestone today: It’s offering fully driverless rides to (some) members of the public.

While the Alphabet-owned company has offered plenty of self-driving rides before, they usually came with a human in the driver’s seat for safety. Members of the early rider program who’d signed nondisclosure agreements were able to try out fully driverless rides — but again, they had to sign NDAs first.

Today, the company said members of its more open Waymo One program in Phoenix will be able to go fully driverless, and to take friends and family with them. And over the next few weeks, the program will open up to even more passengers.

The tech giants

Apple is extending some Apple TV+ subs through February 2021 for free — Apple gave away a free year of Apple TV+ to new device purchasers last year; now it’s bumping those subs out to February.

Amazon debuts its first fully electric delivery vehicle, created in partnership with Rivian — The van’s unique features include sensor-based highway driving and traffic assist features.

IBM plans to spin off infrastructure services as a separate $19B business — The company said this will allow it to focus on newer opportunities in hybrid cloud applications and artificial intelligence.

Startups, funding and venture capital

Instacart raises $200M more at a $17.7B valuation — It’s not hard to trace a connection between COVID-19 and Instacart’s business results.

Affirm files confidentially to go public — The news comes after the impending debut was reported in July.

Delivery startup goPuff raises $380M at a $3.9B valuation — GoPuff delivers products like over-the-counter medicine, baby food and alcohol (basically, the stuff you’d buy at a convenience store) in 30 minutes or less.

Advice and analysis from Extra Crunch

Investors, founders report hot market for API startups — Startups that deliver their service via an API are having a moment.

Tech’s role in the COVID-19 response: Assist, don’t reinvent — Speakers at Disrupt explained how technology companies have taken a backseat to frontline workers, rather than attempting to “solve” the issues on their own.

These 3 factors are holding back podcast monetization — Fundamental fixes could unleash the channel’s revenue potential.

(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

General Motors finally gets serious about in-car tech, taps Unreal Engine for next-gen interface — Matt Burns writes that GM’s current crop of in-car user interfaces is among the worst on the market.

Consumers spent a record $28B in apps in Q3, aided by pandemic — According to a new report from App Annie, consumers in the third quarter downloaded 33 billion new apps globally.

US Space Force is getting an immersive space sim training tool built in part by the VFX studio behind ‘The Mandalorian’ — The U.S. Space Force obviously won’t be able to train most of their service people in actual space, so the new arm of America’s defense forces has tasked Slingshot Aerospace to create a VR space sim.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

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Instacart raises $200M more at a $17.7B valuation

Instacart announced today that it has raised $200 million in a new funding round featuring prior investors. D1 Capital and Valiant Peregrine Fund led the investment. Instacart is now worth $17.7 billion, post-money, or $17.5 billion pre-money. The plan is to use the funding to focus on introducing new features and tools to improve the customer experience, and further support Instacart’s enterprise and ads businesses, according to a blog post.

Previously in 2020, Instacart raised $100 million in July, and $225 million in June. The June round valued the company at around $13.7 billion, meaning that the unicorn’s new funding round — raised just months later — came at a much higher price.

Instacart, like some other tech, and tech-enabled businesses, has seen demand for its service expand during the pandemic. It’s not hard to trace a connection between COVID-19 and its business results, as folks wanting to stay at home have turned to on-demand services to keep themselves safe.

The growth shown by Uber’s food delivery business is another example of this trend.

Instacart’s valuation has more than doubled since its 2018 Series F, when it was worth around $7.9 billion. The pace at which Instacart has created paper value is impressive, though its IPO plans appear murky from the outside and how much of the its COVID-bump will be retained when the pandemic ends is not yet clear.

The startup famously turned a profit during a month in Q2, worth around $10 million per The Information. The same report indicated that Instacart lost around $300 million in 2019. What the company’s full-year profitability profile will look like is not know.

TechCrunch sent a number of questions to the firm, including if it has had any further profitable months in 2020, and how quickly it grew in Q3 2020. The company’s spokespeople did not answer those questions.

“Today’s investment is a testament to the strong conviction our existing investors have in the strength of our teams and the important role Instacart plays for customers, partners, and the entire grocery ecosystem,” Instacart CEO Apoorva Mehta said in a press release. “I’m incredibly proud of our team’s work to scale our business this past year and rise to meet the unprecedented consumer demand and growth.”

Instacart is one of the company’s caught up in a regulatory war after California passed AB5, which changed the state’s rules on gig workers. A voter proposition — Prop 22 — that would keep rideshare drivers and delivery workers classified as independent contractors, is coming up for a vote in California. Instacart is in favor of the proposition, along with Uber, Lyft, DoorDash and Postmates (now owned by Uber).

Uber, Lyft, Instacart and DoorDash have collectively contributed $184,008,361.46 to the Yes on 22 campaign. Those contributions have been monetary, non-monetary and have come in the form of loans. In September, the four companies each committed another $17.5 million to Yes on Prop 22 in monetary contributions. Of all the measures on this November’s ballot, Yes on Prop 22 has received the most contributions, according to California’s Fair Political Practices Commission.

Beyond Prop 22, Instacart is facing a lawsuit from Washington D.C. District Attorney General Karl A. Racine that alleges the company charged customers millions of dollars in “deceptive service fees” and failed to pay hundreds of thousands of dollars’ worth of sales tax. The suit seeks restitution for customers who paid those service fees, as well as back taxes and interest on taxes owed to D.C. Specifically, it alleges Instacart misled customers regarding the 10% service fee to think it was a tip for the delivery person, from September 2016 to April 2018.

Meanwhile, amid the pandemic and wildfires in California, workers have demanded personal protective equipment and better pay, and, most recently, disaster relief.

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Fringe pitches a monthly stipend for app purchases and subscriptions as the newest employee benefit

Fringe is a new company pitching employers on a service offering lifestyle benefits for their employees in addition to, or instead of, more traditional benefits packages.

“We didn’t think it made sense that employees need to be sick, disabled, dead or 65+ to benefit from their benefits,” wrote Fringe chief executive Jordan Peace, in an email.

The Richmond, Virginia-based company was founded by five college friends from Virginia Tech rounded up by Peace and Jason Murray, who serves as the company’s head of Strategy and Finance. The two men previously owned a financial planning firm called Greenhouse Money, which worked with small businesses to set up benefits packages and retirement accounts.

During that time, the two men had a revelation… employees at these small and medium-sized businesses didn’t just want retirement or healthcare benefits, they wanted perks that were more applicable to their day-to-day lives. Because Murray and Peace couldn’t find a company that offered a flexible benefits package on things like Netflix, Amazon or Hulu subscriptions, Uber rides, Grubhub orders or Instacart deliveries, they built one themselves.

As they grew their business they brought in college friends, including Isaiah Goodall as the vice president of partnerships, Chris Luhrman as the vice president of operations and Andrew Dunlap as the head of product.

Peace and Murray first launched the business in 2018 and now count over 100 delivery services, exercise apps, cleaning services and other apps of convenience among their offerings.

For their part, employers pay $5 per employee covered per month and set up a monthly stipend (that may or may not be subtracted from a total benefits package) of somewhere between $50 and $200 that employees can spend on subscription services.

It’s a pitch to employers that Peace says is especially compelling as office culture changes in the wake of massive office closures and work-from-home orders from major U.S. companies as a response to the COVID-19 epidemic.

“In-office perks and even most ‘off-site’ perks (gyms, massage spas, etc.) are all null and void,” wrote Peace. “Even post-COVID, it’s highly likely that many of these aspects of office culture will bear less significance with many CEOs vowing to allow ‘WFH forever.’ This means companies need a way to package their office culture and ship them home. Fringe is perfectly positioned for this and determined to be the first name that comes to mind to provide a solution.”

Peace sees this as the next step in the evolution of benefits offerings for employees. He traces its legacy to the development of private health insurance and 401k retirement plans. “After another 40 years lifestyle benefits are the newest breakthrough — and like its predecessors, will be almost universally adopted in the next 5 years,” Peace wrote.

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Alexis Ohanian is leaving Initialized Capital

Reddit co-founder Alexis Ohanian is leaving Initialized Capital, the investment firm he co-founded in 2011 with Garry Tan, as first reported by Axios and confirmed by TechCrunch. The move comes weeks after Ohanian publicly stepped down from the Reddit board of directors, with Y Combinator president Michael Seibel taking his spot.

Ohanian launched Initialized Capital back in 2011 with a $7 million investment vehicle. Since then, the San Francisco-based firm has grown immensely and made early-stage bets in companies like Flexport, Instacart, Cruise, Coinbase and Codecademy. Most recently, it closed a $225 million investment vehicle in 2018, its fourth fund to date.

Ohanian is leaving Initialized Capital to work on “a new project that will support a generation of founders in tech and beyond,” the firm said in a statement to TechCrunch. According to the Axios story, Ohanian is leaving Initialized to work more closely on pre-seed efforts. On its website, Initialized details that many teams it talks to already have launched products and have a plan to earn revenue.

“We understand that products and business models evolve, but it’s good to see in a very concrete way how teams are able to ship products and work together,” the firm wrote. If Ohanian raises a pre-seed fund, it will be interesting to see how he changes this methodology.

Ohanian did not directly respond to a request for comment.

It’s worth mentioning that partner departures in venture capital are rarely crystal clear break-ups. As Initialized confirmed, Ohanian will remain involved in the firm’s existing investment vehicles and portfolio companies due to legal ties. It is unclear if Ohanian will remain on any board he is on. Ro, a company in which Ohanian has a board seat, did not immediately respond to a request for comment.

One big question is whether Ohanian’s departure would trigger a key-man clause in the firm’s limited partnership agreement. “Key-man” clauses, which are typical in limited partner agreements, require that certain designated people (typically the main partners in a firm) must stay continuously employed at a firm and be active investors. When a key-man clause is triggered, limited partners often have a variety of tools, ranging from control over new hiring to outright ending the investing at a fund, in order to protect their investment in a fund.

In this case, it would be surprising if Alexis Ohanian wasn’t a key man, as he is one of the leading general partners and a founder of the firm.

Ohanian stepped away from being involved in the day to day of Reddit in 2018, and recently left his board seat at the company following protests against police brutality. The co-founder urged Reddit to fill the seat with a Black board member. Reddit ultimately selected Y Combinator CEO Michael Seibel to fill the position.

Tan, the other founding partner of Initialized, helped YC grow in its early days and helped build the famed accelerator’s internal software system and late-stage funding program. “[Tan] will continue to lead Initialized Capital into the future, finding and funding great entrepreneurs as he has done for nearly a decade,” the firm wrote in a statement to TechCrunch. “Garry and Alexis remain committed to each other as long-standing friends and business partners. The firm fully supports Alexis in his future pursuits.”

Initialized Capital currently has $500 million assets under management and has backed over 200 companies to date.

Additional reporting by Danny Crichton.

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Workers prepare to strike May 1, amid strained pandemic working conditions

The global pandemic has tested the bounds of businesses across the world and transformed the way many of us live our lives. For those among us who are unable to leave our homes at all as COVID-19 virus rages, online retail and food services have been a kind of lifeline.

But as contact-free delivery becomes the norm, it can be easy to forgot all the people working to provide those services at risk to their health. And more often than not, employees are working for low wages or tips.

A number of protests have been organized at companies like Amazon and Instagram in the intervening weeks and months, but a wide-scale, cross-company event hasn’t really surfaced. That could change on May 1, as employees mark the longstanding tradition of International Workers’ Day with a May Day general strike.

Material for the event has been circulating online, rebadged “Essential Workers’ Day,” as a nod to the exemptions to stay at home orders for retail and food delivery, among others. The event is framed as a combination strike and boycott, targeted at Amazon/Whole Foods, Instacart and Target/Shipt (as well as Walmart and FedEx, according to various sources). 

Specific demands differ from employer to employer, but workers have broadly asked for essential health protections, sick leave and hazard pay as the pandemic has continued to wear on and profits have spiked for many providers. 

Vice spoke to Christian Smalls, one of the organizers, the Staten Island Amazon employee who was fired after organizing a walkout at one of the company’s fulfillment centers. “We formed an alliance between a bunch of different companies because we all have one common goal which is to save the lives of workers and communities,” he told the site. “Right now isn’t the time to open up the economy. Amazon is a breeding ground [for COVID] which is spreading right now through multiple facilities.”

Amazon workers have been particularly vocal about the retail giant’s response to the pandemic. In addition to Smalls, two other employees who were publicly critical of the company were fired by Amazon — though the company denied the direct link. Instacart employees have also organized boycotts and strikes, including one in late March.

“We remain singularly focused on the health and safety of the Instacart community. Our team has been diligently working to offer new policies, guidelines, product features, resources, increased bonuses, and personal protective equipment to ensure the health and safety of shoppers during this critical time,” the company said in a statement. “We welcome all feedback from shoppers and we will continue to enhance their experience to ensure this important community is supported.”

Other companies have previously issued similar statements regarding employment during the crisis. We’ve reached out to them for additional comment on the planned protests.

Update: An Amazon spokesperson offered TechCrunch the following statement,

While we respect people’s right to express themselves, we object to the irresponsible actions of labor groups in spreading misinformation and making false claims about Amazon during this unprecedented health and economic crisis. The statements made are not supported by facts or representative of the majority of the 500,000 Amazon operations employees in the U.S. who are showing up to work to support their communities. What’s true is that masks, temperature checks, hand sanitizer, increased time off, increased pay, and more are standard across our Amazon and Whole Food Market networks already. Our employees are doing incredible work for their communities every day, and we have invested heavily in their health and safety through increased safety measures and the procurement of millions of safety supplies and have invested nearly $700 million in increased pay. Working globally with our teams and third parties we have gone to extreme measures to understand and address this pandemic with more than 150 process changes to-date. We spend every day focused on what else Amazon can do to keep our people and communities safe and healthy.

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Instacart’s hiring spree continues as it faces unprecedented demand

Instacart is adding more support roles to help its shoppers, customers and retail partners as the company faces unprecedented demand for its grocery delivery services due to COVID-19 shelter in place orders.

Today Instacart announced that it has doubled its Care team, from 1,200 agents to 3,000 agents. Care team employees will work on answering questions about how Instacart works, delivery issues, address mishaps and other general woes.

The hiring news comes after Instacart shoppers organized a strike last month, demanding personal protective equipment, hazard pay, default tips and extended sick pay.

Instacart has been on a hiring spree as customer demand increased more than 300% year over year last week alone. Last month, the Instacart shopper community grew to 350,000 active shoppers, up from 200,000 two weeks ago.

Today, along with doubling its Care team, Instacart says it has also hired and signed an additional 15,000 representatives that will join the team by May. With that, Instacart says it will have a Care team of about 18,000 members.

Some of Instacart’s new hires have are experienced support agents recently laid off in the flurry of cuts across the hospitality and travel industry.

With more demand, and thus more stresses on shoppers than ever before, the new members seem like yet another move by Instacart to try to pacify its growing shopper network. Last month, Instacart outlined an extended pay policy and contactless pay option. The company also introduced new product features aimed at making delivery windows for shoppers more flexible and fast.

Earlier this week, tip-baiting emerged as a grotesque tactic used by customers. Customers have been baiting Instacart shoppers to pick up their groceries by putting large tips on the bill through the app. Then, once the shopper drops off the groceries, customers are changing that tip to a lesser amount or even to $0.

The ability to change the tip price up to three days after grocery drop-off is an option provided through the Instacart application.

According to Instacart, tip-baiting is rare. Customers either adjusted their tip upward or did not adjust tip at all on 99.5% of orders. The company also removed the “none” option in the customer tip section with hopes that customers will tip at minimum.

While these feature updates will likely have a positive impact, Instacart has still not banned customers from changing the tip after getting their groceries. The new roles will not be able to help shoppers with tip-baiting changes either, as the tip is entirely up to the customer.

The company has also not changed the default tip minimum, as worker protests asked for tip defaults to be put at 10% during this time.

The surge of hires for Instacart’s Care team was not related to the tip-baiting issue, says the company, but instead related to the surge of demand for the service.

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Let’s give tech philanthropists the benefit of the doubt on COVID-19

Scott Bade
Contributor

Scott Bade is a former speechwriter for Mike Bloomberg and co-author of “More Human: Designing a World Where People Come First.”

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How Huawei is dividing Western nations
‘A city where you can pilot almost anything and figure out if it’s going to work’

Tuesday afternoon saw two big announcements from the tech world in the fight against COVID-19.
First, Jack Dorsey, CEO of Twitter and Square, announced he would give $1 billion to COVID-19-related causes. A few hours later, a group of tech billionaires, including LinkedIn founder Reid Hoffman, Stripe’s …

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Latin America Roundup: Grupo ZAP, Grow Mobility, Wavy get acquired; Credijusto adds $100M; Cornershop, iFood brace for delivery boom

Sophia Wood
Contributor

Sophia Wood is a Venture Partner at Magma Partners. Sophia is also the co-founder of LatAm List, an English-language Latin American tech news source.

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Latin America Roundup: SoftBank adds $1B, Stori raises $10M and Grow Mobility puts on the brakes
Latin America Roundup: Loft raises $175M, SoftBank invests in Mexico’s Alphacredit and Rappi pulls back

As the world locks down borders and capital flows to brace for the impact of coronavirus, Brazilian startups continue to attract international attention. Three large acquisition deals dominated the Latin American tech headlines this month, all …

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