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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

#111
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.

That's in no way relevant. I want to know how much more it costs to use Instacart vs going to the store, and I don't care what their costs are just what mine are for using the service.

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

#112

Earlier quoted context omitted.

>> and again, we aren't the ones doing the markup So you claim, but since you refuse to list what the IC markup is then it's impossible for us to tell. You're essentially using the retailer markup as an excuse to hide instances of when you do it yourself. Thus the lack of transparency. In any given transaction, I have NO idea what the actual % that was added by IC. I do not have this problem with Amazon Prime.

again, in 99.99% of the cases, we aren't doing the markup. and, in the one case where we do not have a signed relationship with the retailer, we do explicitly note the percentage. we aren't hiding anything. and, you have that precise problem with amazon prime -- what markup are they charging?

If any markup exists, and if Instacart splits some of that markup with the retailer, it seems like obscuring the facts to state that Instacart does not charge a _separate_ markup.

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

#113
I really hope this money goes towards their customer service infrastructure, and the quality of their workers. As an Instacart Express customer (their premium offer for free delivery) since 2013, I can say the customer service has gone downhill significantly. I can elaborate some here more...

- Their quality of workers have gone down. I don't know if they have just lowered the bar for who they hire, or if the workers are too focused on competing orders that they just don't care anymore. I'm not exactly sure.

For example, in the app there is a setting option you (as a user) can set to explicitly request a phone call me if there is any replacements to confirm them. In the past year, I don't think any workers have followed this setting. And I understand that is maybe because Instacart has added some of that functionality in app, but that doesn't really work all the time. I have also recently had more and more Instacart workers who will make the "replacement" requests in the last 2 seconds of shopping so you have no ability to actually "approve/deny" the things they pick. I believe they do this on purpose so they don't have to do as much work trying to communicate with their user they are shopping for. It probably shaves off time they have for completing other orders. So, by this "evil" tactic I've seen them start to use more and more, you can't actually control the replacements. You just get what they assumed you may want for the replacement. This is incredibly frustrating as a user to have happen to your order. Instacart has been good at refunding me for the bad replacements, but if they would have just called (like I marked in the app), we could have resolved the issue in store, and it would be all good. I don't understand why Instacart still has this setting if no workers are going to follow it anymore. They need to get this sorted out. Either informing their workers, or forcing app users to explicitly approve/deny in app before it closes that opportunity.

- Their up-sell fees have gotten outrageously greedy. It seems they are just rounding up to the highest potential possible and then charging that. They are transparent that some stores have higher prices, I understand that, but it's frustrating when certain items are way too up-priced. Meat being a perfect example. If you just want to get 1 ribeye steak, the app will say it will be $20, but then when you get the piece of meat it will still have the price label on it saying it was say $8. Instacart doesn't do any price adjustment to factor that and just charges $20, unless you contact their customer support and complain. On top of that, last time their customer support wouldn't even change it until I complained on Twitter. Then they finally took care of it.

- They used to give debit/credit card refunds for mistakes. Now they just give you a credit to your next order. I absolutely HATE this practice that companies sometimes do. It's so anti-consumer. You can't call it a refund if I'm forced to use your service again to actually be redeemed. That's a credit, not a refund. I don't get why they changed to this model, other than to speculate that their poor customer service has bit them in the butt so it's easier to give the user "monopoly" money to be forced to come back to use it, rather than just giving them a true refund. I'm not sure.

Those are just a few things that I've started to notice way more frequently. And I'll be 100% clear, this has all happened within the last year. I had 0 problems until the past year. I have no clue why it took such a dramatic fall. In the past year, there hasn't been a SINGLE order where I haven't had to contact customer support to fix something. And it's getting obvious that even their support is caring less and less about helping. Like making me have to go as far as get "social media justice" for them to fix their problems.

It's a bad trend I've seen. I'm optimistic that they can turn it around, and hopefully this money can help with that. I will not be renewing my Instacart Express this year, that's for sure. Will probably give them a few orders to redeem themselves after that and see. If it's still poor service, they will have lost a loyal customer all because of poor quality/scaling. But I'm also just 1 user. I get everyone may have different experiences.

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

#115
post #80

Earlier quoted context omitted.

I think he's saying a customer will ask "is Instacart cheaper than Walmart" and the answer is "no", so there isn't a place for Instacart to fit, assuming Amazon owns the high-end side with Whole Foods (although I wouldn't assume Amazon would settle for just that). Walmart already has grocery warehouses with their stores, so bolting on pickup/delivery to those makes sense. I don't know how much pickup/delivery could p…

right now, whole foods is something like 1 or 2% of the grocery market in the US. we plan to be the partner to the rest of the nation -- my initial question was how on earth you can just assume amazon (by default) owns the rest of the high end market, and, why you think "bolting on delivery" is easy/trivial.

>> why you think "bolting on delivery" is easy/trivial

For someone in the position of Walmart, and with the many startups that doing delivery, it seems realistic.

As for why do i think Amazon will win the high end? really, the biggest reason is that it's Amazon. But yes, that's not a good enough reason, but still, they win an awful lot.

But maybe there's a chance for instacart to win the higher end, especially by offering the largest variety any merchant can offer.

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

#116
post #19
post #5

From an outsiders perspective this looks like a bad investment. But I'm an outsider, so I know I don't have all the information. I would love to get an insiders perspective on why this is a good investment. My two main concerns: 1) Amazon and Whole Foods: Are they not a concern? 2) Economic downturn: Will people still order groceries at a premium?

competition is a good thing, it encourages all competing parties to strive for a better product. from an investment point of view, its a bit similar to Lyft vs Uber ... pretty much the exact same business, but there is always room to eat market share.

Competition is good for consumers but not investors. Investors want monopolies.

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

#117

Earlier quoted context omitted.

i am very confused why you have a higher bar for this than other services. would you actually create a spreadsheet that values your time (against other alternatives), gas/lyft/train fare to and back from the store, the extra costs associated with actually being in a retailer (and seeing the specials in store etc) and compare that against our offering? and again, we aren't the ones doing the markup -- those are coming…

No, I wouldn’t perform that calculation exactly and explicitly - but I absolutely think about my purchasing decisions in that way. I can give you ballpark estimates of how valuable my time is, how much time it takes and how much it costs to physically go to the grocery store, etc., and give you a ballpark breakeven point. I’d probably pay $20 for a grocery delivery, but I probably wouldn’t pay $50. But I have no idea…

thank you for context, and sorry if i sounded snippy in my response.

i was mainly noting the source for markups as we cannot tell you that delta -- it's up to the stores to tell us what they want to charge online. we do want to be as transparent as possible! ("possible" being the operative word here)

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

#118

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…

For me, the worst grocery delivery service is still miles better than going to a store and shopping for groceries. I'm OK with missing items, I'll just get a refund and deal with it. It's still far far better than dealing with a physical grocery store. I'm sure there are millions of others like me.

I can't agree. If you're missing an item that you needed for that night's dinner, then you now are doubly inconvenienced, first by having to pay that convenience fee, and now second that you have to spend your time to go to the store anyways and get what was missing.

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

#119

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…

as an engineer at instacart, it's very disheartening for me to see the top-rated comment on HN is "I can’t wait for instacart to go out of business." even if we did not provide value to you (which i apologize for -- it is a priority of ours to improve the replacement experience in particular as it is very frustrating to customers), i am not sure why that implies that we do not provide a valuable service for others an…

My experience with Instacart has been pretty great so I was shocked at the GP vitriol as well. In my case, Instacart has been a huge help - my brother, who is unable to drive for medical reasons, uses your service considerably to get his weekly groceries. Once I figured out the substitutes scheme, it worked like a charm.

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

#120

Earlier quoted context omitted.

No, I wouldn’t perform that calculation exactly and explicitly - but I absolutely think about my purchasing decisions in that way. I can give you ballpark estimates of how valuable my time is, how much time it takes and how much it costs to physically go to the grocery store, etc., and give you a ballpark breakeven point. I’d probably pay $20 for a grocery delivery, but I probably wouldn’t pay $50. But I have no idea…

thank you for context, and sorry if i sounded snippy in my response. i was mainly noting the source for markups as we cannot tell you that delta -- it's up to the stores to tell us what they want to charge online. we do want to be as transparent as possible! ("possible" being the operative word here)

No problem at all - thanks for sharing your perspective. It’s helpful to know that grocery stores themselves are responsible for those markups, not because it affects the value that the service creates for me now, but because it impacts how the service could evolve in the future. If Instacart is currently subject to higher-than-retail prices, there’s even more room for it to potentially benefit from setting up its own warehouses, relationships with wholesalers, etc.
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