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From the Instacart CEO: "We don’t have to build warehouses, lease a fleet of trucks or manage perishable inventory, which substantially reduces our operational

From the Instacart CEO: "We don’t have to build warehouses, lease a fleet of trucks or manage perishable inventory, which substantially reduces our operational cost." If they guarantee delivery in 2 hours and they don't have these costs, they're paying someone else who has these costs, right? How can they really be a competitor to Amazon, then? I have to think that Amazon is operating on such razor-thin margins precisely because they think they can do a much better job than using someone else.

rgarcia 13y ago
They pay their delivery people. They're a competitor to Amazon in that they've traded the operational cost of warehouses for the risks associated with crowdsourcing (quality control, etc.). Amazon probably perceives the risk of crowdsourcing as too high, or at the very least it's outside of their operational "comfort zone".
- JonFish85 13y ago
  But they're entirely different (to me). They essentially exist on top of other companies' operational costs of warehousing, trucks, etc, so those costs PLUS a profit (presumably) are built into Costco / Trader Joe's / whoever else they source from. They're a glorified courier system, it seems. If that's true, they're less a competitor to Amazon and more a competitor to FedEx / UPS / USPS.
deleted 13y ago
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samstave 13y ago
I imagine that they are really the Uber in this area... They provide a good flexible service ontop of existing infrastructure at a premium cost to users. While that's just fine - I would love to see a service that lowers the cost to me as a consumer for food. Actually, let me rephrase that: I, personally, need a service that helps me reduce the amount of food I waste. With a family of (5) in my household, we waste a lot of food - and it drives me nuts. I hope that something along the lines of Blue Apron could help me throw out less/buy less.
- _k 13y ago
  Not sure I understand. You want to eat less or have more food deliveries so it's always fresh ?
  - samstave 13y ago
    I want to more closely buy the amount of ingredients required in what I would use them for. I would love to be able to shop based on meals - where I say "on Wednesday night we are going to serve turkey meatloaf with broccoli and salad for 4 people" and understand the ingredients and proportions that match that. I wind up having stuff rot because I only use a portion of it for whatever I make, and I don't have a set menu so the food is random/too-often-the-same etc... I want the entire experience to be optimized.
    - zimbatm 13y ago
      Soup and probably other meals are traditionally used to recycle unused ingredients and avoid that "always the same" feeling. It might be easier to do that.
      - samstave 13y ago
        Agreed. and I am actually quite good at slowcooking stuff in my CrockPot. Maybe I have just been too lazy? However, I am not 100% convinced that food is not sold in the wrong proportions.
    - hariis 13y ago
      It is better to optimize your menu which is in your hands than wanting your shopping experience to be optimized.
- jlgreco 13y ago
  I think I have the same problem, but in the opposite way. I live by myself and end up wasting too much food because I don't eat all that I buy, but find it difficult to buy less. For example, I threw out half a lime this morning. I bought it a few days ago only needing a few slices, then didn't use the rest. In the case of a single lime it isn't really possible to buy less (and at least limes are cheap), but with other items I could benefit from more exact planning.
jhuckestein 13y ago
The difference is that Instacart, with a few orders of magnitude less resources, can deliver your groceries within two hours today and Amazon can't. Obviously, as your volume increases, it makes sense to own more steps along the value chain yourself.
- tracker1 13y ago
  Yeah, except that Instacart's delivery area is a LOT (orders of magnitude) smaller than Amazon's.
mmmmax 13y ago
We don't operate out of big warehouses, so we don't have these costs. It's a totally different model.

rgarcia 13y ago

They pay their delivery people. They're a competitor to Amazon in that they've traded the operational cost of warehouses for the risks associated with crowdsourcing (quality control, etc.). Amazon probably perceives the risk of crowdsourcing as too high, or at the very least it's outside of their operational "comfort zone".

JonFish85 13y ago
But they're entirely different (to me). They essentially exist on top of other companies' operational costs of warehousing, trucks, etc, so those costs PLUS a profit (presumably) are built into Costco / Trader Joe's / whoever else they source from. They're a glorified courier system, it seems. If that's true, they're less a competitor to Amazon and more a competitor to FedEx / UPS / USPS.

deleted 13y ago

[deleted]

samstave 13y ago

I imagine that they are really the Uber in this area... They provide a good flexible service ontop of existing infrastructure at a premium cost to users. While that's just fine - I would love to see a service that lowers the cost to me as a consumer for food. Actually, let me rephrase that: I, personally, need a service that helps me reduce the amount of food I waste. With a family of (5) in my household, we waste a lot of food - and it drives me nuts. I hope that something along the lines of Blue Apron could help me throw out less/buy less.

_k 13y ago
Not sure I understand. You want to eat less or have more food deliveries so it's always fresh ?
- samstave 13y ago
  I want to more closely buy the amount of ingredients required in what I would use them for. I would love to be able to shop based on meals - where I say "on Wednesday night we are going to serve turkey meatloaf with broccoli and salad for 4 people" and understand the ingredients and proportions that match that. I wind up having stuff rot because I only use a portion of it for whatever I make, and I don't have a set menu so the food is random/too-often-the-same etc... I want the entire experience to be optimized.
  - zimbatm 13y ago
    Soup and probably other meals are traditionally used to recycle unused ingredients and avoid that "always the same" feeling. It might be easier to do that.
    - samstave 13y ago
      Agreed. and I am actually quite good at slowcooking stuff in my CrockPot. Maybe I have just been too lazy? However, I am not 100% convinced that food is not sold in the wrong proportions.
  - hariis 13y ago
    It is better to optimize your menu which is in your hands than wanting your shopping experience to be optimized.
jlgreco 13y ago
I think I have the same problem, but in the opposite way. I live by myself and end up wasting too much food because I don't eat all that I buy, but find it difficult to buy less. For example, I threw out half a lime this morning. I bought it a few days ago only needing a few slices, then didn't use the rest. In the case of a single lime it isn't really possible to buy less (and at least limes are cheap), but with other items I could benefit from more exact planning.

jhuckestein 13y ago

The difference is that Instacart, with a few orders of magnitude less resources, can deliver your groceries within two hours today and Amazon can't. Obviously, as your volume increases, it makes sense to own more steps along the value chain yourself.

tracker1 13y ago
Yeah, except that Instacart's delivery area is a LOT (orders of magnitude) smaller than Amazon's.

mmmmax 13y ago

We don't operate out of big warehouses, so we don't have these costs. It's a totally different model.