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Instacart has raised another $200M at a $4.2B valuation

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Re: Instacart has raised another $200M at a $4.2B valuation

#101

Post by lazerpants »

jimmy1 wrote: post #12
spiderPig wrote: post #2

Wow, so they've raised close to $1bn so far! Wonder how many of these delivery services like Doordash, Postmates, Grubhub, Caviar, Uber eats etc will survive the next economic downturn.

As a former restaurateur, I would like to tell you, contrary to popular opinion, during the last major economic downturn in 2008 (2009 for me since I was in a southern state, and the downturn hit us a bit later than most), spending money out to eat actually went up . The theory goes a little something like this -- people actually spend more money on themselves to cheer themselves up when life gets shittier. So folks,…

I'd like to posit an alternative argument. That the increase in business was more due to demographic shifts than to the "lipstick effect". Around 2007 the entire generation of millennials was finally of age to go out and spend money eating. This is the largest demographic group of Americans. Even if people 16-30 were spending less money per person eating out, the volume of individuals spending money on eating out was sufficiently high to increase business.

Re: Instacart has raised another $200M at a $4.2B valuation

#102

Post by roymurdock »

lazerpants wrote: post #98
roymurdock wrote: post #65

Earlier quoted context omitted.

ok, and yes there were a few traders and economists who did ("the big short" follows 3 of these traders' stories), but in order to trade you need to have a thesis for what and when to buy. there are tons of gloom and doom traders and economists (usually trying to sell "safe" or alternative assets) but i have yet to read any clear, compelling cases laying out what and when to buy when the first domino falls that will…

The typical advice for the beginning of a market downturn is to buy bonds, which usually act as a safe haven from those fleeing stocks (perhaps untrue currently though). Alternatively, some propose purchasing blue chip dividend yielding stocks, as money moves from risky stocks to tried and true ones. During a recession/large market correction, you're looking to hold all cash and just buy stocks cheap after they drop…

I'm not talking about safe assets, I'm talking about what to buy now in advance of whatever crash is coming :)

For example leading up to the 2007 crash the pros that saw weakness in the mortgage market created and bought "credit default swaps" allowing them to bet against mortgage-based securities

Re: Instacart has raised another $200M at a $4.2B valuation

#103

Post by jotm »

jimmy1 wrote: post #82
maxerickson wrote: post #59

Earlier quoted context omitted.

The energy and other utilities for 1 meal will be like $0.30. So that barely registers compared to time and ingredients.

Bad credit affects utility costs. Most impoverished people have bad credit. Again, being poor costs more in almost all areas of life in America. Contrary to popular belief, utilities are not a right. Utility companies have the right to refuse you if you have enough delinquent payments, can't front the deposit (if you have bad credit) or even outright refuse you (if you have terrible credit). Even on the FTC's website…

Wow, I didn't know it was that bad. Being denied utilities based on credit score... damn. Do you have prepaid meters by any chance?

It's the standard option for those who fail to pay their bills on time here.

With a prepaid, you load up money and it turns off your gas/electrical once the prepaid amount is exhausted.

Water is exempt, no one can turn off the water at a residential address, no matter how long you haven't paid...

Re: Instacart has raised another $200M at a $4.2B valuation

#104

Post by habosa »

As I remember, Instacart's main business was Whole Foods delivery. When Amazon bought Whole Foods they obviously lost that market, but there was some optimism presented because now suddenly every store has to compete with Amazon and would look to Instacart as a ready-made provider of this service.

But I am not so sure this will work out. Instacart builds some of their fees into item prices. If you're shopping at Whole Foods you're already signaling some price insensitivity, and you likely won't notice a few nickels added to these already premium items.

However if you shop at somewhere like Safeway, this may not work. The price competition is way more intense and consumers are much more sensitive to the price of essentials.

Maybe the idea is that anyone who orders groceries from a hip mobile app like Instacart is someone who can afford the convenience premium? I am just not convinced that they can really ever recover from Amazon here. Plus these other chains may want to do business with Instacart today, but in the long term they'll probably invest in their own delivery services and cut out the middle man.

Instacart is a pretty legit business, but $4.2B is a lot for a middleman in an industry that is synonymous with low margins.

Re: Instacart has raised another $200M at a $4.2B valuation

#105

Post by tomnipotent »

octernion wrote: post #96
Pyxl101 wrote: post #91

Earlier quoted context omitted.

Are you responding to the same screenshot that tfehring is commenting on? https://imgur.com/a/j47ls It says: > "A mark-up is added to item prices at this retailer to cover the cost of the Instacart service. Prices are based on data collected in store and are subject to delays and errors." There is no good, ethical reason why a delivery service should show me an item price that's different from what's in the store. It…

as i have noted elsewhere in the thread, that is a message -- from the retailer -- that the prices are different from in-store (and again, online pricing is their prerogative). instacart is not marking anything up. edit: it seems clear that we can do better in terms of communicating this, so i've passed that feedback on to the team.

Excellent - so it's not a lack of transparency, but bad copywriting/marketing.

The paragraph reads like IC is responsible for the increase, not the retailer itself.

Re: Instacart has raised another $200M at a $4.2B valuation

#106

Post by k_sh »

octernion wrote: post #96
Pyxl101 wrote: post #91

Earlier quoted context omitted.

Are you responding to the same screenshot that tfehring is commenting on? https://imgur.com/a/j47ls It says: > "A mark-up is added to item prices at this retailer to cover the cost of the Instacart service. Prices are based on data collected in store and are subject to delays and errors." There is no good, ethical reason why a delivery service should show me an item price that's different from what's in the store. It…

as i have noted elsewhere in the thread, that is a message -- from the retailer -- that the prices are different from in-store (and again, online pricing is their prerogative). instacart is not marking anything up. edit: it seems clear that we can do better in terms of communicating this, so i've passed that feedback on to the team.

some constructive feedback: i had no idea that the markups were from/by the retailer, as opposed to instacart.

consider changing the messaging there? until now, i was under the impression that the markups were just another way for y'all to make some money off of me.

Re: Instacart has raised another $200M at a $4.2B valuation

#107

Post by anonfunction »

clay_the_ripper wrote: post #14

I have never had a good experience with instacart. I’ve ordered from them probably 10-15 times and every single time, without fail, they either forget an item or replace an item with another item that I don’t want. This makes the service unusable, because if I’m cooking dinner that night and want to order instacart, there’s a high likelyhood I’ll be missing something crucial for my recepie, meaning I’ll have to go to…

A few more things instacart does that really bother me:

1. The time slot changes as soon as you click checkout, what I mean is while browsing I'll always see "Available Within 1 hour" then when it actually is time to checkout that option is gone. It happens virtually every time and I've never seen it happen the other way around or happen while shopping and refreshing or going back and forth between shopping and checking out. This leads me to believe it's an intended trick they are using to get people to shop even if the time they want isn't available.

2. They don't provide drivers with any sort of cart to actually deliver the groceries with. One delivery driver had to lug water bottles and other heavy items from down the street where he could find parking into my building and up to my apartment. Amazon Fresh gives their drivers a handcart to help with deliveries.

3. After several orders of mine were never delivered and Instacart offering a $5 credit (after wasting hours of my time waiting for their large delivery window) I had a driver tell me that drivers get to keep orders that are not delivered and sometimes they pick really good orders and say they couldn't be delivered.

I still use them because it's convenient but wish they would treat their users with more integrity and also manage their delivery drivers better by providing supporting tools like a cart or keeping tabs on drivers that may be taking orders for themselves.

Re: Instacart has raised another $200M at a $4.2B valuation

#108

Post by alexbeloi »

octernion wrote: post #66
kayhi wrote: post #61

Earlier quoted context omitted.

Never used Instacart, but your link to show transparency, doesn't actually state what the mark up is.. 2%, 10%, 25%, order minimum or there's fee.. Transparency to me, would mean I place order and know how much it will cost, instacart mark up, service fees and if a tip is included.

we used to provide specific percentages, but phased that out over time as it was obvious that wasn't providing real value -- where on amazon.com do you see their markup? additionally, for virtually all stores on instacart.com now, we are simply passing on the pricing that the retailer has given us (which may or not be marked up from their internal prices -- but we do not control) edit: to be crystal clear, that means…

>additionally, for virtually all stores on instacart.com now, we are simply passing on the pricing that the retailer has given us (which may or not be marked up from their internal prices -- but we do not control)

IC is responsible for signing the contracts they have with retailers, IC is also the most visible partner for the end-user. As you can see from this thread, attempts to kick the blame down(up?) the supply chain will only fall on deaf ears.

Re: Instacart has raised another $200M at a $4.2B valuation

#109

Post by lazerpants »

roymurdock wrote: post #102
lazerpants wrote: post #98

Earlier quoted context omitted.

The typical advice for the beginning of a market downturn is to buy bonds, which usually act as a safe haven from those fleeing stocks (perhaps untrue currently though). Alternatively, some propose purchasing blue chip dividend yielding stocks, as money moves from risky stocks to tried and true ones. During a recession/large market correction, you're looking to hold all cash and just buy stocks cheap after they drop…

I'm not talking about safe assets, I'm talking about what to buy now in advance of whatever crash is coming :) For example leading up to the 2007 crash the pros that saw weakness in the mortgage market created and bought "credit default swaps" allowing them to bet against mortgage-based securities

Ah, well if you could go back in time to last week, you could have made a fortune with put options on VIX ETFs before some of them failed. Volatility being at such a tremendous low is definitely unusual and the possibility of ETF failures was baked in. Maybe in a few years we'll see a movie about people with foresight making money off of that event.

Re: Instacart has raised another $200M at a $4.2B valuation

#110

Post by lobster_johnson »

habosa wrote: post #104

As I remember, Instacart's main business was Whole Foods delivery. When Amazon bought Whole Foods they obviously lost that market, but there was some optimism presented because now suddenly every store has to compete with Amazon and would look to Instacart as a ready-made provider of this service. But I am not so sure this will work out. Instacart builds some of their fees into item prices. If you're shopping at Whol…

Instacart hasn't lost Whole Foods. You can still get deliveries. (Though who knows whether this will last, or whether it can compete on price with Amazon's own offerings.)
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