By: First Union | Date:
The Rise of the Company Instacart
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When Amazon bought out Whole Foods ,Instacart's largest partner at the time, many people saw the writing on the wall for the delivery service. Without Whole Foods, their business model would be greatly diminished. And indeed, Instacart did struggle upon Amazon's acquiring the grocery chain. That however has all changed. In light of what the world has experienced these past few months, the delivery company is back in a big way, and they are stronger than they have ever been.
Now valued at nearly 14 billion, Instacart recently announced that they have managed to raise 225 million in investor funds. Why the need for additional cash…Instacart is experiencing unprecedented customer demand. And even as the country shifts toward somewhat of a more normal mode, the demand for food delivery services is still inordinately high as people are remaining hesitant about venturing out. Not to mention, during the past few months, customers became increasingly accustomed to having groceries and other items delivered to their door. Even those who'd never tried Instacart before discovered that they could certainly get used to home delivery of food and other such items.
The company's founder, Apoorva Mehta, was even astounded at how quickly Instacart became the go-to delivery service, citing that it seemed an almost overnight shift during which they had the chance to serve millions throughout North America.
Earlier this year, Instacart hired more than 300k new workers to keep pace with demand. The company plans on adding to that number and foresees hiring potentially 250k more later this year. Unlike companies such as Uber and Lyft who subsequently suffered during the first half of 2020, Instacart's business model proved a necessary one as they continue to ride the wave of popularity.
That said, Instacart has met with some challenges and even controversy. Some accused them of not doing enough to protect workers as such workers aren't seen as employees. The Instacart shoppers began protesting in March, demanding an extra $5 per order by way of hazard pay as well as a 10% default tip. In light of tip baiting where consumers try and entice shoppers with large tips only to end up tipping zero, the company's tipping policy has consequently been adjusted.
What does the future look like for the food/grocery delivery service industry in general…Experts agree that with the world still adjusting to how things are now, people will continue to rely upon delivery companies such as Instacart. The delivery giant only stands to gain more and more momentum moving forward.
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