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Instacart

From Wikipedia, the free encyclopedia

Maplebear Inc.
Instacart
Company typePublic
IndustryRetail
FoundedJune 2012; 12 years ago (2012-06)
Founders
Headquarters50 Beale Street
San Francisco, California, U.S.
Area served
United States and Canada
Key people
Fidji Simo (CEO)[1]
ServicesGrocery delivery
RevenueIncrease US$3.04 billion (2023)
Decrease US$−2.1 billion (2023)
Decrease US$−1.6 billion (2023)
Total assetsIncrease US$4.73 billion (2023)
Total equityIncrease US$3.75 billion (2023)
Owners
Number of employees
3,380 (2023)
SubsidiariesCaper AI
Websiteinstacart.com
instacart.ca
Footnotes / references
[2][3]
The Instacart logo is a simplified carrot. Logo since 2022.

Maplebear Inc.,[2] doing business as Instacart, is an American delivery company based in San Francisco that operates a grocery delivery and pick-up service in the United States and Canada accessible via a website and mobile app.[4] It allows customers to order groceries from participating retailers with the shopping being done by a personal shopper.[5] The company also provides alcohol delivery in states and provinces where it is allowed. It has partnerships with 1,500 retail banners comprising 85,000 stores.[6][7] Instacart reaches nearly 98% of SNAP households, offering delivery services from nearly 180 retail banners, including ALDI, Food Lion, Publix, The Save Mart Companies and Walgreens, spanning more than 30,000 stores across all 50 states and Washington D.C.[8] Since its founding, Instacart Marketplace has powered more than $100 billion of GTV and over 900 million orders with approximately 20 billion items ordered.[9]

History

[edit]

Corporate history

[edit]

After getting inspiration from being low on groceries without owning a car[10] as well as his trips to the grocery store by bus in the cold while growing up in Canada,[11] Apoorva Mehta founded Instacart in 2012 at age 26. He tried to apply for funding through Y Combinator but missed the deadline. He eventually got a meeting by using the Instacart mobile app to deliver a six-pack of beer from 21st Amendment Brewery to a Y Combinator partner[10] and was admitted to the summer of 2012 batch.[12] Y Combinator helped Mehta raise $2.3 million in funding[10] and enabled him to meet his two co-founders, Max Mullen and Brandon Leonardo.[11] The company’s name is a combination of "maple," in reference to Canada, and "bear," for the logo on the California state flag, as Mehta grew up in Canada and moved to California.[13]

In 2020 during the COVID-19 pandemic, Instacart implemented contactless delivery, safety kits and guidelines for shoppers.[14]

In July 2021, Fidji Simo was appointed CEO, while Mehta transitioned to Executive Chairman of the Board.[15]

In July 2022, Simo was appointed to succeed Mehta as chairperson once the company completed its initial public offering.[16]

In September 2023, the company became public through an initial public offering raising $660 million, valuing the company at about $10 billion.[17][18] Mehta left the company after it went public.[19]

Service launches and grocery partnerships

[edit]

Instacart was first launched in San Francisco in 2012.[20] In November 2013, Instacart added alcohol delivery in areas where alcohol delivery was legal.[21] The company expanded across the United States in the following years.[22][23][24]

In November 2017, the company expanded to Canada, first with a partnership with Loblaw Companies in Toronto and Vancouver.[25][26] By May 2018, Instacart was available for use in 11 Canadian markets and was planning expansions for five more markets.[27]

In March 2019, Instacart expanded its same-day alcohol delivery service in the U.S.[28] Effective May 2019, Whole Foods Market ended its partnership with Instacart in the U.S. given its ties to Amazon.[29][30] In February 2024, Instacart announced customers throughout Canada can now order fresh groceries and everyday essentials from Whole Foods Market on the Instacart App.[31]

In May 2020, Instacart began a partnership with Rite Aid, offering its service across 2,400 locations in 18 states.[32] 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.[33][34] Additional partnerships in June included C&S Wholesale Grocers and Staples.[35][36]

In March 2022, in partnership with TikTok, Hearst Magazine and Tasty, Instacart launched Shoppable Recipes with product integrations for food creators.[37] In the same month, Instacart introduced the Instacart Platform, a program with services for retailers. The platform launched with features for advertising, home delivery, and inventory counting.[38][39]

In May 2022, Instacart partnered with Canadian grocers Metro, Giant Tiger, and Galleria Supermarket.[40]

In March 2023, Instacart announced the availability of digital tools for medical providers to promote nutritious foods to patients and their families.[41]

In November 2023, Instacart partnered with Peacock.[42]

In May 2024, Instacart partnered with Uber Eats to give Instacart customers access to food delivery from Uber Eats U.S. restaurant partners.[43]

In June 2024, Instacart began a partnership with New York Times Cooking.[44]

Operation

[edit]

Pricing changes

[edit]

In August 2013, Instacart began offering an annual membership service called Instacart Express.[45] In June 2022, Instacart Express was renamed Instacart+ and new family shopping features, including sharing membership and shopping-cart collaboration with another family member for free, were added.[46]

In April 2018, Instacart changed its prices 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%.[47]

Worker classification issues

[edit]

In June 2015, Instacart allowed some shoppers to choose to be part-time employees, starting with Chicago and Boston[48][49] and extending its offer to shoppers in Atlanta, Miami, and Washington, D.C. the following month.[50]

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.[51][52]

Worker relations and pay issues

[edit]

In November 2016, the company removed the option to leave a gratuity in exchange for a service fee that would be used to pay workers instead. The backlash against the policy from customers and some shoppers 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.[53][54]

In November 2017, 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.[55]

In February 2018, Instacart mistakenly 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.[56]

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.[57][58][59]

In February 2019, an online organizing campaign, including shoppers, provided examples of payments to shoppers as low as $0.80 per delivery. The company announced that it would revise its pay system and give back pay to some workers.[60][61] 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.[62][63]

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.[64]

In February 2020, Instacart employees in Skokie, Illinois voted to form a trade union. 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 picked up groceries for delivery.[65] At the time, about 12,000 of Instacart's 142,000 workers were employees with the option of unionizing.[66]

From mid-March to mid-April 2020, during the COVID-19 pandemic, as a result of a surge in usage of the mobile app, Instacart hired an additional 300,000 workers to meet the surge in demand for grocery deliveries.[67][68][69]

Instacart workers threatened to strike on March 27, 2020 due to a lack of COVID-19 safety measures.[70] Workers demanded hazard pay and personal protective equipment.[71] In early April 2020, Instacart began providing safety kits to workers.[72] In May, workers reported being denied sick leave despite quarantining under the advice of a doctor. Instacart required that workers either get a positive COVID-19 test or be under a mandatory quarantine by a public health agency or other government agency.[73][74] By June, Instacart changed its sick leave rules in an agreement reached by it and D.C. Attorney General, Karl Racine. Under the agreement, Instacart provided paid leave to workers who were clinically diagnosed with COVID-19 by a doctor or other medical professional along with those who had a household member contract COVID-19. The agreement also provided access for workers to telemedicine services.[75][76]

In January 2021, Instacart announced a $25 stipend to provide financial assistance to company shoppers who choose to get the COVID-19 vaccine.[77][78]

In January 2021, the company announced plans to lay off nearly 2,000 employees, including all of its employees who had voted to unionize. Instacart said that the layoffs were due to stores increasingly using Instacart to have consumers place orders, but have their own employees fulfill the order instead of Instacart's workforce, reducing reliance on Instacart's in-store shoppers.[79][80][81]

Acquisitions

[edit]

In January 2018, the company acquired Toronto-based Unata, a white-label platform for grocers, for $65 million.[82][83][84]

In October 2021, Instacart acquired smart cart and checkout company Caper AI for $350 million.[85]

In September 2022, Instacart announced the acquisition of Eversight, an artificial intelligence pricing platform for brands and retailers.[86][87]

Also in September 2022, the company acquired Rosie, an e-commerce platform for local and independent retailers and wholesalers.[88]

Service model

[edit]

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.[89][90] Instacart has item pricing that differ from those purchased directly in store.[91]

Alcohol

[edit]

Instacart provides alcohol delivery and pickup in 27 states,[92] 2 provinces in Canada, and Washington, D.C.[93] Instacart has alcohol delivery partnerships with more than 600 retail banners that span more than 21,000 stores.[94][95]

References

[edit]
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[edit]
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