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What is Instacart really charging? the breakdown

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Re: What is Instacart really charging? the breakdown

#41
post #14

Initial post removed, here's the imgur link to the receipt that was accidentally left in the bag and screenshots of the instacart list. https://imgur.com/a/r6KGn

Highway robbery

How is this robbery exactly? They're not holding a gun to your head and making you use the service, and the price is disclosed up front.

Re: What is Instacart really charging? the breakdown

#42

Many comments saying something to the effect of "$140 for $80 worth of groceries? Robbery!" What's $80 worth of groceries? It's what you're willing to pay $80 for. The grocery store is marking up the food from their suppliers, is that a rip off? Grocery stores in urban areas charge more than in rural areas, rip off? When there's only 1 small store in an area (food deserts) they charge 10-30% more - an outrage? This i…

The outrage is that they are intentionally obfuscating the cost of using their service. It's not unreasonable at all to want to know how much more using their service costs than if I were to go shopping myself; that's how I can do the cost evaluation of whether it's worth it for me to spend that extra money to save me the time of a shopping trip. Information is critical for driving free markets. Instacart is pulling…

The price of their service was $140 for the groceries the customer selected. Hard stop. The grocery store doesn't tell you what the underlying cost of their food was, nobody does that. It's not a requirement.

Now it could be something consumers DEMAND which would give a competitor an advantage if they did it (see Everlane with their transparent pricing) but it's not unethical or sleazy not to disclose the underlying costs of your goods.

Re: What is Instacart really charging? the breakdown

#43
When i worked in UAE (United Arab Emirates) grocery delivery was like magic: you can just call any grocery shop to bring food to your flat and they bring it to you in a few minutes. Delivery was performed by cashier - he just take required items and bring in in a bag to you. So simple, so cost-effective and so useful. I wonder if anyone is done something like this at scale?

Re: What is Instacart really charging? the breakdown

#44
post #33

Instacart and some of these other apps charge a LOT of money, so they go to pretty great lengths to hide the amount they are actually charging. Instacart is being especially clever by raising the price of the item then charging an additional service fee and delivery fee with, apparently, surge pricing. It also isn't clear how much of any of this goes to the actual person doing the work, so you still need to tip aroun…

From my experience, there are plenty of stores on instacart that are same price as store and they are transparent about it. Why not shop there? This seems like a store which they mark up.

> there are plenty of stores on instacart that are same price as store and they are transparent about it

What stores do they not mark up and how do you know that? What do you mean when you say they're transparent - that they tell you there's no markup?

Re: What is Instacart really charging? the breakdown

#45

I've never used Instacart but it seems to be a weird thing to outrage over, when apparently you are told the final payment upfront, and you know you are ordering from a premium service that is fundamentally a luxury offering. And I'd expect most people to have some basic ballpark idea of how much everyday groceries cost. Does this person also expect businesses to disclose their profit margins before he's comfortable…

While some people do get outraged by high margins, the main issue I see here is that they do pretend to publish their markup, but it's widely out of whack with reality. 63% may technically fit into "15%+", but it's highly misleading. They should just remove it.

Exactly. It is like saying this item only cost a few dollars. When in reality it is a $100,000. I didn't lie but it is surely misleading.

Re: What is Instacart really charging? the breakdown

#46

I've never used Instacart but it seems to be a weird thing to outrage over, when apparently you are told the final payment upfront, and you know you are ordering from a premium service that is fundamentally a luxury offering. And I'd expect most people to have some basic ballpark idea of how much everyday groceries cost. Does this person also expect businesses to disclose their profit margins before he's comfortable…

> Does this person also expect businesses to disclose their profit margins before he's comfortable doing business with them? Is that really such an unreasonable demand?

Why do you care what the profit margin is? Either the product or service is worth more to you than the money that they're charging, or it isn't.

Re: What is Instacart really charging? the breakdown

#47

Instacart and some of these other apps charge a LOT of money, so they go to pretty great lengths to hide the amount they are actually charging. Instacart is being especially clever by raising the price of the item then charging an additional service fee and delivery fee with, apparently, surge pricing. It also isn't clear how much of any of this goes to the actual person doing the work, so you still need to tip aroun…

Several of my friends have raved about Instacart recently, saying the convenience and time savings are well worth the meager delivery fees. Normally I'm not that into such services. However, I desperately needed groceries yesterday, but I was feeling sick and didn't want to get out of the house. So I decided to give it a try.

I got on the site as a first-time user and entered my zip code. From a list of stores around the area, I pointed it to a grocery store in my neighborhood. Then I started searching for items.

When I saw the prices on the Instacart list, I did a double-take. Turns out there is a margin, and it is at least 20%, if not much more. The reason I noticed this is because I shop at that store every week and am very familiar with the prices of the items I was browsing. Keep in mind I was browsing around 11 am, with a delivery window of 2-3pm, so it wasn't (or shouldn't have been) subject to surge pricing either.

And like you say, the exact margin is hidden, and even the fact that they do have a margin isn't explicitly stated anywhere that I could see. So if I wasn't familiar with the prices at that specific store, I may have just gone with it.

This lack of transparency (and in fact I can go one step further and claim it is purposeful obfuscation) immediately eliminated all my trust in Instacart. I closed the window without completing my order. I have since received three emails from them (in 24 hours) reminding me that I have an incomplete order. Suffice it to say, I have no intention of logging back in, ever.

Re: What is Instacart really charging? the breakdown

#48

Earlier quoted context omitted.

The outrage is that they are intentionally obfuscating the cost of using their service. It's not unreasonable at all to want to know how much more using their service costs than if I were to go shopping myself; that's how I can do the cost evaluation of whether it's worth it for me to spend that extra money to save me the time of a shopping trip. Information is critical for driving free markets. Instacart is pulling…

The price of their service was $140 for the groceries the customer selected. Hard stop. The grocery store doesn't tell you what the underlying cost of their food was, nobody does that. It's not a requirement. Now it could be something consumers DEMAND which would give a competitor an advantage if they did it (see Everlane with their transparent pricing) but it's not unethical or sleazy not to disclose the underlying…

It seems unethical for a company to tell you "our markup for this grocery store is 15%+" when in reality it was ~50%.

Re: What is Instacart really charging? the breakdown

#49

Many comments saying something to the effect of "$140 for $80 worth of groceries? Robbery!" What's $80 worth of groceries? It's what you're willing to pay $80 for. The grocery store is marking up the food from their suppliers, is that a rip off? Grocery stores in urban areas charge more than in rural areas, rip off? When there's only 1 small store in an area (food deserts) they charge 10-30% more - an outrage? This i…

The outrage is that they are intentionally obfuscating the cost of using their service. It's not unreasonable at all to want to know how much more using their service costs than if I were to go shopping myself; that's how I can do the cost evaluation of whether it's worth it for me to spend that extra money to save me the time of a shopping trip. Information is critical for driving free markets. Instacart is pulling…

> It's not unreasonable at all to want to know how much more using their service costs than if I were to go shopping myself

They're not intentionally obfuscating anything. You know how much your bill will be before you order. What it costs them is immaterial.

Would you expect a clothing store to tell you what their individual per-unit cost is for clothes you're buying, and to tell you how much money they're charging you for opening a storefront and negotiating with the manufacturer?

Re: What is Instacart really charging? the breakdown

#50

This may be a confusing thing, I suspect Instacart may get volume discount from stores for bringing the extra business. So this markup may be based on discounted cost instacart pays, not necessarily what YOU would pay at the store. Still think it's a crazy premium, but I enjoy grocery shopping.

Can you explain further? Because this makes no sense on its face. If they get a discount on what the grocery store charges, then the final price after their markup should be closer to the store's price, not further.
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