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What is Instacart really charging? the breakdown

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Re: What is Instacart really charging? the breakdown

#81

Post by mikeyouse »

brown9-2 wrote: post #50
wpeterson wrote: post #12

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.

His insinuation is that the "Instacart receipt" that the customer received is the discounted one that reflects the bulk discount. If an individual went to the store and got the same list of items, it would be more expensive, so the markup wasn't $140 - $80 but more like $140 - $100.

I have no idea if that's true or not..

Re: What is Instacart really charging? the breakdown

#82

Post by eizenh3im »

I used to shop on instacart but the lack of transparency made me switch back to going-to-the-store shopping. Started using prime now for about 2 months and love how much more transparent it is about its costs. They charge the same as the store and add a default $5 tip as suggested tip. Wish instacart would get their shit together. Delivery business is a growing market and would love to have multiple great providers. Also feel for instacart since it was so much early to the game than all of its current competitors.

Re: What is Instacart really charging? the breakdown

#83

Post by true_religion »

jasode wrote: post #58
true_religion wrote: post #9

If you rely on a lot of service companies like Uber & Instacart, appified dry-cleaning and maid service then it may actually be cheaper for you to hire someone for 8 hours a day to do your chores. This guy ended up paying $70 for a single grocery trip, do that and take Uber twice a day, and you're verging on "I can hire personal staff" territory.

> it may actually be cheaper for you to hire someone for 8 hours a day to do your chores. Whatever math calculation one does, it has to factor in the hassle of becoming an "employer" which is a complication that most consumers don't want. E.g. If you pay someone more than $36 a week[1], a law-abiding tax payer would have to file a W2 to the IRS reporting the income. (Yes yes, most parents don't actually file W2 for t…

As an employer, W2 forms aren't terrible hard to fill out and I don't know why everyone seems so scared of them.

People have had this viewpoint that filing taxes is 'hard', but recent improvements have made it 100% electronic and really cut down on the effort needed to compile it legally.

And then of course, no one would pay a babysitter a W2. You'd count them as a 1099, but not need to file till they made more than 10,000 a year.

What's more interesting is having an actual employee though who can do nannying, picking up dry cleaning, and all of the other personal chores you just put off or have apps do. They're your personal assistant, and honestly if filing taxes is a hassle for you, you can have them fill out the forms because what else are assistants for?

Re: What is Instacart really charging? the breakdown

#84

Post by icebraining »

IAmGraydon wrote: post #55
icebraining wrote: post #8

Earlier quoted context omitted.

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.

I have no idea how you think "15%+" is misleading. You can't simply ignore the + sign to make your case. That says the markup STARTS AT 15% and goes up from there. Also, the markup on store items wasn't 63%. That was after additional fees, tax, tip, etc. The markup was 42.8%.

I didn't ignore the plus sign, that's why I called it misleading and not outright fraud. There's an expectation that when a number is quoted, that the value is somewhere in its ballpark, otherwise it'd be completely meaningless: they say "it may be 15%+", which if you read it as a pure logical statement, it can literally be any amount. It's only meaningful because of that common expectation, which they are exploiting.

Fair enough regarding the 42% vs 63%, though.

Re: What is Instacart really charging? the breakdown

#85

Post by true_religion »

Neliquat wrote: post #22
true_religion wrote: post #9

If you rely on a lot of service companies like Uber & Instacart, appified dry-cleaning and maid service then it may actually be cheaper for you to hire someone for 8 hours a day to do your chores. This guy ended up paying $70 for a single grocery trip, do that and take Uber twice a day, and you're verging on "I can hire personal staff" territory.

Well technically, thats what they are doing already in your example, just on an ad hoc basis, rather than full time. Which I concede, is likely a better deal for many people. Hrmm, where does one hire this type of pa?

Networking. I simply asked around with my friends, and someone was found who needed steady work.

Re: What is Instacart really charging? the breakdown

#86

Post by mnm1 »

Do people really expect corporations to be ethical and not make the most money possible given the circumstances? It sounds like many people expect to leave corporations to their own whims while at the same time expecting them to be fair, self-correcting, and a benefit to society. Sounds pretty delusional to me. That's like sitting each day staring at the computer for years on end and expecting a finished program to emerge while having done nothing. Maybe that's why this business model is exactly the same as that of supermarkets that offer delivery direct to consumers (in the US), down the opaque pricing.

Re: What is Instacart really charging? the breakdown

#87

Post by jasode »

true_religion wrote: post #83
jasode wrote: post #58

Earlier quoted context omitted.

> it may actually be cheaper for you to hire someone for 8 hours a day to do your chores. Whatever math calculation one does, it has to factor in the hassle of becoming an "employer" which is a complication that most consumers don't want. E.g. If you pay someone more than $36 a week[1], a law-abiding tax payer would have to file a W2 to the IRS reporting the income. (Yes yes, most parents don't actually file W2 for t…

As an employer, W2 forms aren't terrible hard to fill out and I don't know why everyone seems so scared of them. People have had this viewpoint that filing taxes is 'hard', but recent improvements have made it 100% electronic and really cut down on the effort needed to compile it legally. And then of course, no one would pay a babysitter a W2. You'd count them as a 1099, but not need to file till they made more than…

>As an employer, W2 forms aren't terrible hard to fill out

You're taking my example too literally. The "W2 filing" is shorthand for all the extra legal complications such as withholding taxes, paying employer's portion of Social Security, Medicare, and any state mandated payments such as worker's comp, etc. All of that is a big leap of complexity compared to just pushing a few buttons on an iPhone and getting a service-on-demand.

>And then of course, no one would pay a babysitter a W2. You'd count them as a 1099,

Unless the IRS (or even the babysitter) wants to reclassify the relationship as W2 instead of 1099.[1] Now the consumer owes back taxes (and possibly penalties) which is more complicated (and more expensive) than using a phone app.

>What's more interesting is having an actual employee

Sure but probably 95%+ of consumers who want to periodically use Instacart / Uber / Blue Apron / etc do not want jump to the next level of complexity with an actual employer+employee relationship. The threshold for inflicting that bureaucracy on oneself is high. Lastly, the extra employee taxes a consumer would have to pay makes the W2 relationship more expensive than a naive calculation would suggest.

[1] https://www.nytimes.com/2015/03/14/your-money/contract-worke...

Re: What is Instacart really charging? the breakdown

#89

Post by foota »

enraged_camel wrote: post #73
grandalf wrote: post #69

Earlier quoted context omitted.

> Turns out there is a margin, and it is at least 20%, if not much more. This is not true. In some stores Instacart offers the same as in-store prices, other it does not. The same is true of anything one buys on Amazon. Low-cost items that ship with Prime shipping are usually marked up a bit, but I order from Amazon (and Instacart) in spite of this because of the convenience offered. You can pick a basket of goods in…

Maybe it is based on store. I don't know - and that's the problem . Like I said, Instacart (as far as I could tell at a glance) doesn't make the information easily available. That's the problem. I did some casual searching and discovered that they supposedly have page ( https://www.instacart.com/store/prices ) where they list their markups per store, but it doesn't work for me.

Why is this such a big deal? It's not like safeway tells you what markup they are charging.

Re: What is Instacart really charging? the breakdown

#90

Post by jimmywanger »

brown9-2 wrote: post #76
jimmywanger wrote: post #51

Earlier quoted context omitted.

Is it unethical for stores to advertise "savings up to 50%" and have most items not be on sale for 50%?

The difference here is that shoppers in that store can see the final price and actual savings before purchasing. Can you do the same with Instacart?

> Can you do the same with Instacart?

Instacart shows you the final price. The price they paid for the goods is immaterial - you're choosing the convenience of not having to write your own delivery app, recruiting employees, or set up payment.

When you walk into a book store, do you demand to see the book price broken down into manufacturer's price, store rent, employee pay, and store profit and complain when the difference between the manufacturer's price and the retail price is too high?

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