Instacart (YC S12) aims to be the Amazon Prime of grocery delivery

I can't help but worry that services like Instacart, TaskRabbit and Exec may perpetuate the problem of "underemployment" in the United States.

Let's face it, you can't pay delivery people as good as, say, Costco does it's hourly employees and only charge $4 or $10 for delivery. It's even worse if these services are just 1099ing these people without any benefits, gas money, etc. (I have no idea if this is the case).

Maybe these services use student workers. Maybe I'm way off. But I do know that I'm as pro-capitalism as anyone but felt a little dirty after paying someone on TaskRabbit $15 to walk around SF for 2 hours and get me some restaurant information.

I hate to be overly negative against this startup, but I have a couple of issues with this service, that haven't been addressed since Webvan in 2000:

1) The target audience is definitely those people who are too busy to get their own groceries. If they are too busy to get their own groceries, aren't they too busy to cook a meal? I would think that take-out or going out to eat would be their #1 competitor in this area. When both my wife and I were working full-time, at the end of the day we were so exhausted that the last thing we wanted to think about was what we were going to eat, and then actually cooking it. We ate out probably 5 days out of the week. Ordering take-out will be quicker, and less of a hassle.

2) If the delivery person selects items such as meat, eggs, milk, etc that are expired or very close to expiry, it will likely cause a complete lack of confidence in the service. It will only take 1 bad experience buying meat, or a couple of busted eggs in a dozen, and they could potentially lose a customer forever. I'm not sure what their return policy is, but if they have one, it will likely be pretty costly for the company. There also could be incentive for people to return their close-to-expired food to Instacart, claiming that the delivery person selected it. It may seem petty, but for example very high chargebacks rates are one of the biggest challenges that Square faces right now.

3) Free delivery is interesting, but the 3hr delivery window I think will turn out to be pretty inconvenient for customers. It means that they need to deliver their goods at home, because who wants to be stuck at work waiting for their groceries to be delivered? I'm not sure what the delivery times were during their beta testing, that would be interesting to know, but my best un-educated, armchair-analyst guess is that the highest amount of deliveries will be from 7 to 10pm, and on weekends. If Instacart takes off, it means a disproportionate about of work required between 7pm and 10pm, and a lot less at other times. This sounds like a lot of people sitting around waiting for deliveries.

4) Safeway has their own delivery service as well, with a 1hr time window. What exactly does this service provide that Safeway can't? Is it cheaper? Or just faster?

If they wanted to scale, they would need to make deals with the grocery stores to pack the groceries, or have their own food depots so that the delivery people wouldn't have to waste to packing groceries.

I would really like for online groceries to work, partly because I despise going to to the grocery store. I'd much rather have someone else find a place to park, locate all of their items, wait in line at checkout and haul the groceries out of the store. I'm even willing to sacrifice things in order for that to happen, like being able to inspect and pick my own meat and produce.

The only sticking point for me is price and selection. I want options when choosing products and I want the prices to be comparable to what I see in the store. I don't want prices that are twice as much as in the store PLUS delivery fees.

Hopefully Instacart Express tackles that problem. The only concern I had after reading the thread is that it sounds like they have an employee go to an actual grocery store to pick up the order and deliver it. That method of doing things sounds painful once the service really starts to grow, but perhaps they've got an alternative strategy for when that happens.

Good luck, Instacart!

Do you not have these services already in the US? In the UK every major supermarket will deliver to your home whenever you want. They all have mobile apps, etc. They have the leverage, surely the same would happen in the US?