Opaque Shipt pay algorithm slashes employee pay

A new pay structure introduced by Target-owner grocery delivery service Shipt prompted a backlash after it cut employee earnings by up to 50 percent.

Shipt rolled out a black box, "effort-based" algorithm, dubbed "V2", to replace its previous flat-fee model, claiming it would better account for order effort, including number of items, peak shopping times, and location, and provide fairer compensation to workers.

However, many workers reported pay cuts of 30-50 percent and highly unpredictable earnings, and complained about a lack of transparency about how pay was calculated. Shipt's previous system had allowed workers to choose jobs based on known pay rates, but the new algorithm removed this ability, reducing workers' sense of autonomy and causing widespread anger and stress.