Instacart

Instacart is an Internet-based grocery delivery service.
The service

Instacart’s service is mainly provided through a smartphone app, available on iOS and Android platforms, apart from its website. The iOS app allows customers to use Apple Pay.[1] Initially Instacart shoppers simply went to a store and purchased the ordered items at retail and, in addition to the delivery charge, added a markup of 10 to 20 percent. As the business has developed, the firm has established relationships with grocery firms which share their (store) existing markup, allowing Instacart users to shop at in-store prices.[2][3]

The company hires delivery workers and drivers as independent contractors.[4] In June 2015, Instacart began giving shoppers in San Francisco, Boston, and Chicago the option to work as part-time employees, later extending its offer to shoppers in Atlanta, Miami, and Washington D.C.[5]

This shift in independent contract to employment status not only laid off hundreds of workers, but was in direct response to the notion that the legality of classifying their employees as independent contractors was no longer valid.[6]

Currently Instacart (also known as Maplebear, Inc.) is facing class action lawsuit charges filed by former workers represented by the Arn’s Law Firm.[7]

It is also facing a lawsuit by Shannon Liss-Riordin. “Though she did not provide business names, Liss-Riordan said she expects to pursue lawsuits against other types of tech companies that are using the independent contractor approach — think Instacart for grocery deliveries, Homejoy for house cleaning, Postmates for deliveries, TaskRabbit for errands, BloomThat for flower delivery, Washio for laundry services and Spoonrocket for meal delivery.”[8]

History

Instacart was started by Apoorva Mehta, a former Amazon employee.[16] The company launched its service in San Francisco, Mountain View and Palo Alto.[17] The startup company has a $2 billion valuation by investors as of May 2015.[3] Investors include Kleiner Perkins Caufield & Byers (KPCB), Comcast Ventures, Dragoneer Investment Group, Thrive Capital, Valiant Capital, Andreessen Horowitz, Khosla Ventures, Sequoia Capital, Y Combinator and Angel Investor Martin Romero. As of January 2015 total funding was about $275M.[18] At that time, Forbes magazine named Instacart “the Most Promising Company in America”.[19] As of April 2015, the firm had about 200 employees. Actual shopping and delivery is done primarily by independent contractors, though a new policy will allow some Instacart shoppers to choose to be part-time employees.[20][21] During 2014, Instacart expanded to 15 cities: Atlanta; Austin; Boston; Boulder; Chicago; Denver; Houston; Los Angeles; New York City; Philadelphia; Portland, Oregon; San Francisco; San Jose; Seattle and Washington, DC, with plans to expand further in 2015.[3] In September 2015, the company hired Ravi Gupta as its first CFO. [22]