History
Corporate history
After getting inspiration from being low on groceries without owning a car [6] as well as his trips to the grocery store by bus in the cold while growing up in Canada, [7] 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 [6] and was admitted to the summer of 2012 batch. [8] Y Combinator helped Mehta raise $2.3 million in funding [6] and enabled him to meet his two co-founders, Max Mullen and Brandon Leonardo. [7] 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. [9]
In July 2021, Fidji Simo was appointed CEO, while Mehta transitioned to Executive Chairman of the Board. [10]
In July 2022, Simo was appointed to succeed Mehta as chairperson once the company completed its initial public offering. [11]
In September 2023, the company became public through an initial public offering raising $660 million, valuing the company at about $10 billion. [12] [13] Mehta left the company after it went public. [14]
Service launches and grocery partnerships
Instacart was first launched in San Francisco in 2012. [15]
In November 2013, Instacart added alcohol delivery in areas where alcohol delivery was legal. [16]
The company expanded across the United States in the following years. [17] [18] [19]
In November 2017, the company expanded to Canada, first with a partnership with Loblaw Companies in Toronto and Vancouver. [20] [21]
By May 2018, Instacart was available for use in 11 Canadian markets and was planning expansions for five more markets. [22]
In September 2018, Instacart announced national expansions with retailers, including Walmart Canada, Staples Canada, M&M Food Market, [23] Kroger, Aldi, Sam's Club, Publix, and Costco. [24] [25]
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. [26]
In March 2019, Instacart expanded its same-day alcohol delivery service in the U.S. [27]
Effective May 2019, Whole Foods Market ended its partnership with Instacart. [28] [29]
By the end of December 2019, Instacart's alcohol delivery service included over 30 new partners in more than 20 states and Washington, D.C., such as Albertsons, Aldi, Sam's Club, BJ's Wholesale Club, Sprouts Farmers Market, The Fresh Market, and Total Wine & More. [30] [31]
In April 2020, during the COVID-19 pandemic, Instacart introduced a contactless delivery option, safety kits and guidelines for shoppers, and new sick leave policies and pay for those affected by COVID-19. [32] [33]
In May 2020, Instacart began a partnership with Rite Aid, offering its service across 2,400 locations in 18 states. [34] 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. [35] [36] Additional partnerships in June included C&S Wholesale Grocers and Staples. [37] [38]
On March 16, 2022, in partnership with TikTok, Hearst Magazine and Tasty, Instacart launched Shoppable Recipes with new product integrations that allow food creators to make their recipes shoppable on Instacart. [39]
On March 23, Instacart introduced the Instacart Platform, a program with services for retailers. The platform launched with features for advertising, home delivery, and inventory counting. [40] [41]
In May 2022, Instacart unveiled new partnerships with Canada's top 5 grocers: Metro, Giant Tiger, Galleria Supermarket and more, expanding same-day delivery countrywide. [42]
In July 2022, EBT SNAP was accepted in 10 additional states: Colorado, Hawaii, Idaho, Louisiana, Montana, New Mexico, Oregon, Utah, Washington, and Wyoming - with launch partners Albertsons Companies and Sprouts Farmers Market. [43]
In August 2022, Instacart added Carts to the app to allow users to buy items listed in shopping carts by celebrities, influencers, retailers, and other public figures. [44] [45]
Pricing changes
In August 2013, Instacart began offering an annual membership service called Instacart Express. [46] 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. [47]
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%. [48]
Worker classification issues
In June 2015, Instacart allowed some shoppers to choose to be part-time employees, starting with Chicago and Boston [49] [50] and extending its offer to shoppers in Atlanta, Miami, and Washington, D.C. the following month. [51]
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. [52] [53]
Worker relations and pay issues
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. [54] [55]
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. [56]
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. [57]
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. [58] [59] [60]
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. [61] [62] 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. [63] [64]
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. [65]
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. [66] At the time, about 12,000 of Instacart's 142,000 workers were employees with the option of unionizing. [67]
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. [68] [69] [70]
Instacart workers threatened to strike on March 27, 2020 due to a lack of COVID-19 safety measures. [71] Workers demanded hazard pay and personal protective equipment. [72] In early April 2020, Instacart began providing safety kits to workers. [73] 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. [74] [75] 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. [76] [77]
In January 2021, Instacart announced a $25 stipend to provide financial assistance to company shoppers who choose to get the COVID-19 vaccine. [78] [79]
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. [80] [81] [82]
Acquisitions
In January 2018, the company acquired Toronto-based Unata, a white-label platform for grocers, for $65 million. [83] [84] [85]
In October 2021, Instacart acquired smart cart and checkout company Caper AI for $350 million. [86]
In September 2022, Instacart announced the acquisition of Eversight, an artificial intelligence pricing platform for brands and retailers. [87] [88]
Also in September 2022, the company acquired Rosie, an e-commerce platform for local and independent retailers and wholesalers. [89]
US$3.04 billion (2023)
US$−2.1 billion (2023)
