Instacart Is a Parasite and a Sham
The gig company, like many of its peers, has seen business skyrocket during the pandemic while exploiting workers and even failing to turn a profit.
Michael Loccisano/Getty Images
Instacart worker Jen Valencia shops for a customer at Acme Market in Clark, New Jersey, in April. The pandemic has devastated wide swaths of the U.S. economy, causing
about 25 percent of small businesses to close, many of them for good. But some companies have thrived amid this catastrophe indeed, thrived
because of it. Instacart, the grocery delivery service, is booming, with sales up 500 percent year-over-year and the company cruising to a $17.7 billion valuation. Their workforce of mostly low-paid contract workers has swelled to 500,000 people while the company has taken in $500 million in investment since March.
Instacart looked like a savior, now stores aren’t so sure
Representational image
Jaewon Kang
, The Wall Street Journal
Some supermarkets plan to stick with delivery service despite fees; Instacart says it lets grocers expand e-commerce without building their own infrastructure
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Grocery-delivery service Instacart Inc. once seemed like the perfect partner for supermarkets looking to break into e-commerce. After several years together, though, some grocers are starting to question the relationship.
Instacart’s technology provided a ready-made solution for grocery chains that hadn’t yet created options for customers to shop online. And it became even more attractive when delivery demand ballooned with the pandemic, providing armies of on-demand shoppers to fulfill orders in-store and deliver groceries to people’s homes.
Dec. 28, 2020 5:30 am ET
Grocery-delivery service Instacart Inc. once seemed like the perfect partner for supermarkets looking to break into e-commerce. After several years together, though, some grocers are starting to question the relationship.
Instacartâs technology provided a ready-made solution for grocery chains that hadnât yet created options for customers to shop online. And it became even more attractive when delivery demand ballooned with the pandemic, providing armies of on-demand shoppers to fulfill orders in-store and deliver groceries to peopleâs homes.
But many supermarkets say they arenât making money through Instacart, largely because the delivery company typically charges them a commission of more than 10% of each order. Some of Instacartâs retailer partners say the service holds too much control over customer interactions and expect it to take an increasing share of money that food makers spend on marketing.