Delivering groceries with Instacart can be a source of decent income. But exactly how much? This is a constant topic of debate among gig drivers! Here we sketch out ways to calculate how much Instacart drivers earn.
Payment Per Order
Instacart pays Shoppers on an order-by-order basis. Each order’s payment is a sum of 4 parts:
Batch Payment: Your are paid for driving to the store and shopping for the items on the customer’s list, then delivering the order to the customer. The payment is computed according to distance to the store and quantity & weight of items.
Promotions: Instacart sometimes offers drivers extra amounts – such as Peak Boosts and Guarantees.
Tips: Most Instacart customers add a tip, which Instacart passes on 100% to the Shopper.
So: Instacart pays its Shoppers Batch Payment + Promotion(s) + Tip for each order.
Income Per Hour
For convenience, Shoppers often use a quick method of measuring income in dollars per hour. This is computed by dividing the total amount paid by Instacart in a single day/week by the number of hours online (logged into the app).
Example: (Day) Instacart pays me $135. I was online for 6.25 hours. So I “earned” $21.60/hour. (Week) Instacart pays me $955. I was online for 47.5 hours. So I “earned” $20.11/hour.
True “Work-Hours”: In reality, some online time is often used for non-work activities (e.g. sitting reading email, doing a small errand, or posting in the Gig Café). In the above example (where I earned $135 on one day), let’s suppose I used about 30 minutes between orders for various other tasks. And I consumed another 30 minutes going to/from my regular starting location (the gig equivalent of commuting). So even though I was online for 6.25 hours, I was actually “working” for only 5.25 hours. We think this is a more realistic way to measure “work-hours”. In this case, I actually earned $25.71/hour.
Of course, this method oversimplifies the estimation of income. For one thing, it does not factor in expenses. Nevertheless, calculating average “income per hour” is a useful way to understand comparative earning rates.
To arrive at net (actual) income, I must subtract all gig-related expenses from my total Instacart income. These expenses fall into 4 general categories:
Operational Expenses: Costs directly tied to my Instacart mileage. In other words, the more I drive, the more I pay. This is mainly fuel. (Remember, delivering groceries usually involves less kilometers than driving passengers or delivering meals.) I probably should allocate about 10% of what Instacart pays me to cover fuel (unless I drive a hybrid!)
Fixed “Overhead” Expenses: Costs which remain the same regardless of how many kilometers I drive (e.g. monthly data plan, annual vehicle registration, private car insurance).
One-time Expenses: Costs such as purchase of a smartphone. Also, there will be car repairs along the way. And if I get a ticket (or even worse, have an accident), I must include this as a one-time expense.
Depreciation: The more I drive my car, the less it is worth. I must be realistic about this significant hidden expense.
Business/Personal Balance. It is essential to analyze my car’s total kilometers, and determine what percentage is for gig driving and what percentage is for personal use. Assuming the balance is 50/50, then all amounts for fixed expenses, one-time expenses and depreciation should be reduced by 50% before subtracting them from my Instacart income.
A Sample Income Calculation
Let’s apply all of the above factors to calculate the net (actual) income of an average part-time Instacart driver.
I work about 20 “work-hours”/week
Instacart pays me $500
I work the same work-hours for 50 weeks/year
Instacart pays me 50 x $500 = $25,000
My total annual Instacart income = $25,000
I use my car 50/50 for Instacart/personal
Fuel: 10% of my Instacart income = $2,500/year
Fixed Expenses (monthly & annual): Average $400/month x 50% = $200/month = $2,400/year
Depreciation: I bought my car for $15,000. I will sell it in 3 years for $6,000. Depreciation is $9,000 ($3,000/year) x 50% = $1,500/year
My total annual gig-related expense = $2,500 + $2,400 + $500 + $1,500 = $6,900
My net annual Instacart income (total income minus expense) = $25,000 – $6,900 = $18,100
At tax time, I can write off many of my expenses, reducing my income tax:
Without deducting expenses, if my Instacart income is $25,000, my income tax might be $4,000.
But by smartly deducting expenses, I might reduce my taxable income to $18,100, and then pay only $3,000 income tax.
That’s a tax saving of $1,000 – which theoretically I can then “add” to my net income.
My final net annual Instacart income (for 20 work-hours/week) = $18,100 + $1,000 = $19,100
Is the Hourly Rate Better Than Minimum Wage?
All of these computations may be a bit oversimplified. But if they are accurate for my situation, here is how I would calculate my actual hourly income (after covering all gig-related expenses):
I drive 20 work-hours/week x 50 weeks = 1,000 hours
My final net income (before paying income tax) = $19,100
My average income = $19.10/hour (MUCH BETTER THAN MINIMUM WAGE)
Of course, in every situation there may be some variables which increase/decrease this average hourly amount. Each Shopper must do their own calculations based on their own realities.
However, at Gig Drivers of Canada, we believe many Instacart Shoppers can earn MORE than $19.10/hour. As time goes by, you will gain experience and benefit from useful strategies in the Gigapedia and Gig Café, and your hourly income will increase.
Conclusion: Should I Drive for Instacart?
If you can get a full-time job somewhere for $25/hour and you really need the money, you would probably be wise to take that job!
If you can only get a job at around minimum wage (doing cleaning work, stocking shelves at a grocery store, or working in a fast-food restaurant), you should seriously consider working with Instacart.
If you prefer the security of salaried employment, but are able to do a part-time job on the side – gig work with Instacart may be perfect for you!
By the way, the Gig Café (11 Facebook Groups) is a GREAT place to learn how other drivers across Canada make more money delivering groceries with Instacart – including a group specifically for Instacart drivers.
Please remember that Instacart’s payments vary slightly from one province to another, and even from one city to another. So it is important that you study the Instacart Website for specific information about the location where you plan to drive.
Ready to Start?
Once you are confident Instacart may be a good fit for you, then you might as well go ahead and take the next step: SIGN UP! It only takes a few minutes to set up your Instacart Account, providing basic information to establish your driver profile.
Don’t worry – Instacart does not require fees or deposits, and there are no binding obligations or legal traps. At any point along the way, you can pause to get answers to your questions. But if you’re ready to move forward, the sooner you sign up and launch the registration process, the sooner you’ll be out on the road earning money.
(Note: When you click the link to go to Instacart’s sign-up page, the sign-up address will automatically include a Referral Code NTHDD0BAD. This tells Instacart you were referred by Gig Drivers of Canada. We would be grateful if you will use that sign-up page (or enter the Referral Code in the sign-up box), so Gig Drivers can receive recognition and a small referral reward to help cover our expenses. Thank you very much!)
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