Jump to content

Instacart

From Wikipedia, the free encyclopedia

This is an old revision of this page, as edited by 72.89.254.214 (talk) at 14:18, 3 March 2021 (Undid revision 1009978994 by Gmr77 (talk) WP:NPOV see https://en.wikipedia.org/wiki/Talk:Instacart#Undisclosed_payments). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

Instacart
Type of site
Private
Founded2012; 12 years ago (2012)
HeadquartersSan Francisco, California, U.S.
Area served5,500 cities in the U.S. and Canada
OwnerMaplebear Inc.[1][2]
Founder(s)Apoorva Mehta
Max Mullen
Brandon Leonardo
Key peopleApoorva Mehta (CEO)
IndustryRetail
ServicesGrocery Delivery
URLwww.instacart.com
www.instacart.ca
Native client(s) oniOS, Android

Instacart is an American company that operates a grocery delivery and pick-up service in the United States and Canada.[3] The company offers its services via a website and mobile app. The service allows customers to order groceries from participating retailers with the shopping being done by a personal shopper.[4]

History

Instacart was founded in 2012 by serial entrepreneur Apoorva Mehta, a former Amazon.com employee.[5][6][7] Apoorva was born in India and moved with his family to Canada in 2000.[8][9] He studied engineering at the University of Waterloo and graduated in 2008.[10] He was a participant in Y Combinator's Summer 2012 batch, which eventually led to the creation of Instacart.[11] In 2013, Mehta was included on the Forbes 30 Under 30 list.[12] Apoorva previously worked at BlackBerry, Qualcomm, and then Amazon as a supply chain engineer, where he developed fulfillment systems to move packages from Amazon's warehouses to customers’ homes.[13] Before founding Instacart, Apoorva had tried to start at least 20 other services.[12][5][14] He tried building an ad network for social gaming companies, and developing a social network specifically for lawyers, among other start-ups.[15]

Instacart originally launched in San Francisco.[16][17][18][19] By April 2015, the firm had about 200 employees. It introduced a new policy around June allowing some shoppers to choose to be part-time employees, starting with Chicago and Boston[20][21] and extending its offer to shoppers in Atlanta, Miami, and Washington D.C. the following month.[22]

In September 2016, the company announced an expansion to its zone on the north side of Chicago.[23][third-party source needed] In October 2016, it announced the expansion of coverage areas in Orange County, California[24][third-party source needed] and Minneapolis.[25][third-party source needed]

In November 2016, the company changed its policy and removed the option to leave a gratuity in exchange for a service fee that would be used to pay workers instead. Backlash against the policy due to lower profits for at least some shoppers and with customers forced the company to reinstate the option only weeks later with modifications that placed the tip under the service fee section on a separate page.[26][27]

In March 2017, Instacart agreed to pay $4.6 million to settle a class action settlement stemming from the alleged misclassification of its personal shoppers as independent contractors. The suit, filed in March 2015, alleged 18 violations, including improper tip pooling and failure to reimburse workers for business expenses.[28][29]

In November 2017, the company expanded to Canada by announcing a partnership with Loblaw Companies to begin delivery from select locations in Toronto and Vancouver.[30][31] That same month, some Instacart workers participated in a strike action, alleging wages as low as $1 an hour. Instacart claimed that the strike had no impact on its operations.[32] By mid-2018, Instacart was available for use in 11 Canadian markets and was planning expansions for five more markets.[33] In September 2018, Instacart added service from Walmart Canada stores, Staples Canada and M&M Food Market.[34]

In January 2018, the company acquired Toronto-based Unata, a white-label platform for grocers, for $65 million.[35][36][37] In April 2018, Instacart made a few additional changes to its pay service by instituting a mandatory 5% service fee on all orders. It originally offered an optional 10% service fee that went directly to Instacart that could be turned off. It also returned the gratuity option back to the checkout screen and raised the default value from 0% to 5%.[38]

In 2018, Instacart announced national expansions with retailers including Kroger, Aldi, Sam's Club, Publix, and Costco.[39][40] In February 2018, Instacart withheld tips given by customers to shoppers, blaming a software bug. In addition, customers were often charged for service fees that were supposed to be waived.[41]

In November 2018, Instacart announced the national expansion of Instacart Pickup, a grocery click-and-collect service, whereby users pick up their pre-packaged orders at the grocery store.[42] In November and December 2018, Instacart again changed its pay system for its personal shoppers; shoppers claimed this pay system resulted in substantially lower pay and boycotted. Instacart customers complained on social media that their orders were being delayed.[43][44][45]

In February 2019, after an online organizing campaign in which shoppers posted examples of payments as low as $0.80 per delivery attracted media and customer attention, the company announced that it would revise its pay system and give back pay to some workers.[46][47] Under the revised pay system, tips were no longer factored into the minimum base wages, which were newly set at $7–$10 for a full-service shopping order (based on delivery market) and $5 for delivery only.[48][49]

In March 2019, Instacart expanded its same-day alcohol delivery service in the U.S.[50] On April 11, 2019, the company expanded its services to offering an on-demand option for its workers, in order to allow workers to work more flexible schedules.[51] Effective May 2019, Whole Foods Market ended its partnership with Instacart.[52][53] As of December 2019, Instacart's alcohol delivery service included over 30 new partners in more than 20 states and Washington, D.C. such as Aldi, Sam's Club, BJ's Wholesale Club, Sprouts Farmers Market, and The Fresh Market.[54]

In February 2020, Instacart employees in Skokie, Illinois voted to unionize. Instacart said it "will honor" the vote, pending certification of the results. In the lead-up to the election, high-level Instacart managers distributed anti-union literature at a Skokie grocery store where some of the unionizing workers pick up groceries for delivery.[55] About 12,000 of Instacart's 142,000 workers are employees with the option of unionizing.[56]

From mid-March to mid-April 2020, Instacart hired an additional 300,000 workers to meet the surge in demand for grocery deliveries during the COVID-19 pandemic.[57][58] Data from Apptopia demonstrated a 218% increase in daily downloads as distancing measures increased.[59] Instacart also introduced new services in response to the pandemic, including a contactless delivery option, safety kits and guidelines for shoppers, and new sick leave policies and pay for those affected by COVID-19.[60][61]

In March 2020, Instacart workers threatened to strike on March 27, 2020 related to lack of COVID-19 safety measures. A group called the Gig Workers Collective called for a nationwide walk-out to be held on Monday, March 30. They had been asking Instacart to provide workers with hazard pay and protective gear, among other demands.[62] As of April 18, 2020, Instacart reportedly had not provided the safety kits to a majority of its workers, who describe a complicated process to order them.[63]

In May 2020, Instacart began a partnership with Rite Aid, offering its service across 2,400 locations in 18 states.[64] In August 2020, Instacart entered its first partnership with Walmart in the U.S. to offer same-day delivery services. The partnership is a pilot program beginning in Los Angeles, San Francisco, San Diego, and Tulsa.[65][66]

Additional operations include Albertsons, C&S Wholesale Grocers, Staples U.S., and Total Wine & More, among others.[67][68][69] In addition to its grocery partners, Instacart also offers same-day delivery from retailers including Disney store, Sephora, Bed Bath & Beyond, Best Buy, Big Lots, 7-Eleven and others.[70]

On January 14, 2021, Instacart announced a vaccine support stipend to provide financial assistance to shoppers who choose to get the COVID-19 vaccine.[71][72] On January 21, 2021, the company planned to lay off nearly 2,000 employees, including employees who voted to unionize. This decision came in response to grocers increasingly using Instacart technology to power their pickup offerings and their own employees to fulfill orders made for Instacart pickup, reducing reliance on Instacart's in-store shoppers.[73][74][75]

Service model

Orders are fulfilled and delivered by a personal shopper, who picks, packs, and delivers the order within the customer's designated time frame—within one hour or up to five days in advance.[76][77] Customers pay with personal debit or credit cards, Google Pay, Apple Pay and EBT cards.[78] The delivery fee is $3.99 for orders of $35 or more and $7.99 under that amount. Regardless of the cost of the order, there is a 5% service fee with a minimum of $2 owed. Instacart offers a membership service called Instacart Express for a monthly fee of about $9.99 or an annual fee of $99. The membership service waives delivery fees on orders over $35, but customers must still pay the service fee for the shopper. Customers are also requested to leave a gratuity.[79] Retailers participating in Instacart's partnership program set the price of individual items on the Instacart marketplace, which are mostly the same prices as in-store.[80] In addition, customers can pickup their pre-made orders from the store through a separate service.[81] For stores that do not participate in Instacart's partnership program, customers can be charged a markup of about 15%-40% per order with individual items ranging from a negative markup to over 50%.[82][83]

Funding

As of its most recent funding round, in March 2021, the company was valued at $39 billion.[84]

Past funding

In March 2017, Instacart raised $400 million in funding at a valuation of $3.4 billion.[85][86]

In February 2018, the company raised $200 million in a funding round led by Coatue Management, as well as Glade Brook Capital Partners and existing investors.[87] In October 2018, Instacart raised $600 million in a funding round led by hedge fund D1 Capital Partners; the round valued the company at $7.6 billion.[88]

In November 2018, Instacart raised an additional $271 million from investors including Andreessen Horowitz, Sequoia Capital, Kleiner Perkins, Comcast Ventures, Thrive Capital, Coatue Management, and Valiant Capital, bringing its latest round of fund raising to $871 million and valuation to $7.87 billion.[89]

In June 2020, Instacart raised $225 million in a financing round led by DST Global and General Catalyst.[90]

In October 2020, Instacart raised $200 million at a valuation of $17.7B in a financing round led by Valiant Capital and D1 Capital Partners.[91]

In March 2021, Instacart raised $265 at a valuation of $39B from existing venture capital investors including Andreessen Horowitz, Sequoia and D1 Capital Partners, as well as existing institutional investors like Fidelity and T. Rowe Price.[84]

References

  1. ^ "Maplebear Inc. SEC Registration". U.S. Securities and Exchange Commission.
  2. ^ "Grocery Chain Earth Fare Files for Bankruptcy". The Motley Fool.
  3. ^ Captain, Sean (April 11, 2019). "Instacart offers drivers more flexibility on when and what they deliver". Fast Company.
  4. ^ How Instacart Works, What It Costs, And What You Should Know About Using It for Grocery Delivery The Kitchn
  5. ^ a b Lien, Tracey (January 5, 2017). "Apoorva Mehta had 20 failed start-ups before Instacart". Los Angeles Times.
  6. ^ "Instacart Bags $2.3M to Become the Amazon of Groceries". The Wall Street Journal. October 25, 2012.
  7. ^ "First Republic: Apoorva Mehta". First Republic Bank.
  8. ^ "2 Indians in Forbes list of US' richest under-40 entrepreneurs". Business Line. Press Trust of India. December 13, 2016.
  9. ^ Anderson, Stuart. "Instacart Immigrant Founder Helps Americans During The Pandemic". Forbes. Retrieved 2020-08-25.
  10. ^ "Fireside Chat with Instacart Founder Apoorva Mehta". University of Waterloo. October 19, 2016.
  11. ^ "Top Companies". Y Combinator.
  12. ^ a b Wang, Jennifer. "Instacart Founder Apoorva Mehta Becomes A Billionaire After New Funding Round". Forbes. Retrieved 2020-08-25.
  13. ^ Carson, Biz (November 8, 2017). "The Amazon-Whole Foods Deal Could Have Killed Instacart. Instead, The Startup Is Stronger Than Ever". Forbes.
  14. ^ Wang, Jennifer. "Instacart Founder Apoorva Mehta Becomes A Billionaire After New Funding Round". Forbes. Retrieved 2020-08-25.
  15. ^ Instacart: Apoorva Mehta. How I Built This. April 10, 2017 – via NPR.
  16. ^ Somerville, Heather (January 24, 2014). "Startup Instacart hopes to dominate grocery delivery". The Mercury News.
  17. ^ Zaleski, Olivia; Huet, Ellen (February 13, 2018). "With fresh funding, Apoorva Mehta is taking the grocery delivery fight to Amazon". The Economic Times. Bloomberg News.
  18. ^ Redman, Russell (September 25, 2018). "Instacart looks north of the border". Supermarket News.
  19. ^ Demicheva, Valerie (March 11, 2013). "Concierge grocery shopping". San Francisco Chronicle.
  20. ^ O'Brien, Sarah Ashley. "The Uber effect: Instacart shifts away from contract workers". CNN Money.
  21. ^ Instacart Shoppers Can Now Choose to Be Real Employees Wired
  22. ^ Instacart offers its Miami ‘Personal Shoppers’ the option to become employees Miami Herald
  23. ^ "North Chicago, there's more of us to love!". Instacart. September 27, 2016.
  24. ^ "We're Doubling Our Orange County Coverage!". Instacart. October 10, 2016.
  25. ^ "Minneapolis, We're Expanding!". Instacart. October 4, 2016.
  26. ^ Del Rey, Jason (February 20, 2017). "Instacart is playing games with its workers' pay — and will eventually suffer for it". Recode.
  27. ^ Instacart reverses course, re-introducing tips for shoppers TechCrunch
  28. ^ Lawsuit Claims Instacart 'Personal Shoppers' Should Be Classified as Employees TIME
  29. ^ Del Rey, Jason (March 23, 2017). "Instacart will pay $4.6 million to settle a class action lawsuit with its workers". Recode.
  30. ^ George-Cosh, David; Bensinger, Greg (28 September 2017). "Instacart Is Expanding to Canada in Amazon Battle". The Wall Street Journal.
  31. ^ Kopun, Francine (15 November 2017). "Walmart, Loblaws face off over home delivery of groceries". Toronto Star.
  32. ^ "Instacart: Strike last week had no impact on operations". Food Dive.
  33. ^ "Loblaw expanding online grocery pick-up and delivery business across Canada". Global News. The Canadian Press. 2 May 2018.
  34. ^ "Walmart launches 1-hour grocery delivery in GTA with Instacart partnership". CTV News. The Canadian Press. September 13, 2018.
  35. ^ Crook, Jordan (January 16, 2018). "Instacart acquires Toronto-based Unata". TechCrunch.
  36. ^ Sawers, Paul (January 16, 2018). "Instacart acquires Canada-based grocery ecommerce platform Unata". VentureBeat.
  37. ^ "Instacart Acquires Unata" (Press release). PR Newswire. January 16, 2018.
  38. ^ Carson, Biz (April 24, 2018). "Instacart Is Fixing One Of The Most Controversial Parts Of Its Grocery Delivery Service". Forbes.
  39. ^ Redman, Russell (August 30, 2018). "Kroger plans major expansion with Instacart". Supermarket News.
  40. ^ Redman, Russell (September 13, 2018). "Walmart Canada teams up with Instacart". Supermarket News.
  41. ^ Del Rey, Jason (23 February 2018). "Instacart says it mistakenly withheld tips from some of its workers". Recode.
  42. ^ Redman, Russell (November 7, 2018). "Instacart Pickup set to go national". Supermarket News.
  43. ^ Hanbury, Mary (December 4, 2018). "Instacart shoppers say that customers' orders are likely delayed because of frustration with the company's new payment system". Business Insider.
  44. ^ Hanbury, Mary (December 4, 2018). "Instacart workers are threatening to boycott the company over a payment policy change that they say has cut their wages". Business Insider.
  45. ^ Elejalde-Ruiz, Alexia (December 6, 2018). "'We're being mistreated': Instacart shoppers complain of pay cuts as company shifts to new model". Chicago Tribune.
  46. ^ Hawkins, Andrew J. (February 6, 2019). "Instacart revises controversial pay policy after accusations of tip stealing". The Verge.
  47. ^ Hanbury, Mary (February 6, 2019). "Instacart is reversing a controversial payment policy that workers say drastically cut their wages". Business Insider.
  48. ^ Captain, Sean (February 22, 2019). "Drive for Instacart and you could make $29.05 for an hour's work—or $2.74". Fast Company.
  49. ^ DiNatale, Sara (February 28, 2019). "Working for apps like Instacart is 'world of uncertainity [sic]' for its delivery drivers". Tampa Bay Times.
  50. ^ Redman, Russell (March 12, 2019). "Instacart ramps up alcohol delivery". Supermarket News.
  51. ^ Silman, Jon (April 12, 2019). "Instacart Loosens Availability Requirements For Shoppers With New On-Demand Option". PYMNTS.com.
  52. ^ Boyle, Matthew (October 7, 2019). "No Whole Foods, No Problem: Instacart Shakes Off Loss of Grocer". Bloomberg News.
  53. ^ Hanbury, Mary (December 13, 2018). "Instacart's delivery partnership with Whole Foods is ending, killing hundreds of jobs". Business Insider.
  54. ^ Redman, Russell (December 17, 2019). "Costco, Instacart expand alcohol delivery to 200 club stores". Supermarket News.
  55. ^ Gurley, Lauren Kaori (January 27, 2020). "Leaked Memos Show Instacart is Running a Union-Busting Campaign". Vice.
  56. ^ Gurley, Lauren Kaori (February 3, 2020). "Instacart Workers Win Historic Union Election". Vice.
  57. ^ O'Brien, Sara. "Instacart plans to hire 300,000 more workers as demand surges for grocery deliveries". CNN. Retrieved 2020-04-13.
  58. ^ Sonnemaker, Tyler (2020-05-08). "Instacart's army of shoppers has exploded from 180,000 to 500,000 since the start of the pandemic — and some workers say it's making the job more difficult for everyone". Business Insider. Retrieved 2020-05-14.
  59. ^ Perez, Sarah (March 16, 2020). "Grocery delivery apps see record downloads amid coronavirus outbreak". Tech Crunch. Archived from the original on March 16, 2020. Retrieved May 28, 2020.
  60. ^ "Instacart to distribute health and safety kits to its shopper community". Supermarket News. 2020-04-02. Retrieved 2020-04-15.
  61. ^ "Shopping Services Are Household Heroes During Pandemic". LA Weekly. 2020-03-23. Retrieved 2020-04-15.
  62. ^ OLSON, ALEXANDRA; ANDERSON, MAE (March 30, 2020). "Some Instacart, Amazon workers strike as jobs get riskier". ABC News. Associated Press.
  63. ^ "Instacart Workers Are Still Waiting for Those Safety Supplies". Wired. 2020-04-18. Retrieved 2020-05-14.
  64. ^ Moore, Cortney (2020-05-13). "Rite Aid, Instacart to make coronavirus deliveries after new partnership". Fox Business. Retrieved 2020-05-14.
  65. ^ "Instacart starts Walmart delivery pilot in some U.S. cities". Reuters. 2020-08-11. Retrieved 2020-08-17.
  66. ^ "Instacart partners with Walmart to compete with Amazon". CNN. Retrieved 2020-08-17.
  67. ^ Crook, Jordan (March 12, 2019). "Instacart's alcohol delivery is now available in 14 states". TechCrunch.
  68. ^ "Who doesn't sell groceries but delivers via Instacart? Staples!". Chain Store Age. Retrieved 2020-06-15.
  69. ^ "C&S Wholesale, Instacart team up to bring online grocery to 3,000 independents". Supermarket News. 2020-06-04. Retrieved 2020-06-15.
  70. ^ "Last-minute shopping: Target, Walmart, Best Buy, Amazon, other stores offering Christmas Eve same-day delivery". USA TODAY. Retrieved 2020-12-23.
  71. ^ "Instacart offers $25 stipend for shoppers who take the COVID-19 vaccine". CNET. Retrieved 2021-01-21.{{cite web}}: CS1 maint: url-status (link)
  72. ^ "Instacart to provide $25 vaccine stipend for gig-work shoppers". SFChronicle.com. 2021-01-15. Retrieved 2021-01-21.
  73. ^ Instacart will lay off all of its unionized workers - Lauren Kaori Gurley, Vice, 21 January 2021
  74. ^ O'Brien, Ashley (2021-01-21). "Instacart is cutting more than 1,800 jobs, including its only unionized workers". CNN. Retrieved 2021-01-22.
  75. ^ "Instacart Expands Curbside Pickup Options for Retailers". The Spoon. 2021-01-22. Retrieved 2021-02-01.
  76. ^ Lori (January 8, 2019). "Instacart Launches Same-Day Grocery Delivery Service in Winchester". iHeartMedia.
  77. ^ "The Fresh Market Expands Instacart to All Stores". Progressive Grocer. May 16, 2019.
  78. ^ https://www.businessinsider.com/does-instacart-take-ebt
  79. ^ Cain, Brooke (April 7, 2020). "Never had your groceries delivered but ready to try? Here's what you can expect". The News & Observer.
  80. ^ Sofastaii, Mallory (April 2, 2019). "Grocery stores charging Instacart customers higher rates". WMAR-TV.
  81. ^ J, Soundarya (November 7, 2018). "Instacart launches pickup service across U.S". Reuters.
  82. ^ A Reddit user accidentally got a look at Instacart’s markups. They’re really high The Counter
  83. ^ The High Price of Delivery App Convenience The New York Times
  84. ^ a b Batchelor, Deirdre Bosa,Laura (2021-03-02). "Instacart's valuation doubles to $39 billion". CNBC. Retrieved 2021-03-02.{{cite web}}: CS1 maint: multiple names: authors list (link)
  85. ^ Primack, Dan (March 1, 2017). "Instacart is raising a new funding round". Axios.
  86. ^ Fickenscher, Lisa (March 9, 2017). "Instacart now valued at $3.4B after major investment". New York Post.
  87. ^ Lynley, Matthew (February 12, 2018). "Instacart has raised another $200M at a $4.2B valuation". TechCrunch.
  88. ^ "Instacart Announces $600 Million in New Funding Led by D1 Capital Partners" (Press release). PR Newswire. October 16, 2018.
  89. ^ Kumar, Uday Sampath (November 14, 2018). "Instacart wins $271 million in new funding in November: source". Reuters.
  90. ^ Hall, Christine (2020-06-11). "Instacart Pushes Its Way To A $13.7B Valuation With New $225M Funding Round". Crunchbase News. Retrieved 2020-06-17.
  91. ^ Bosa, Deirdre (2020-10-08). "Instacart's valuation has more than doubled in 2020 to $17.7 billion following new funding round". CNBC. Retrieved 2020-10-09.