Congress Returns Next Week With A Tech-Heavy AgendaInstacart, the on-demand grocery delivery startup that is reportedly valued north of $2 billion, is growing fast in 15 markets throughout the country. As it seeks to meet that demand, it has begun experimenting with outsourcing deliveries through third-party providers, according to people familiar with the company’s plans.
Multiple sources tell TechSupport that Instacart has recently reached out to delivery and logistics startups like Postmates, Lyft and Sidecar, among others, to initiate conversations around them making deliveries on its behalf. While Instacart is interested in finding partners that can handle hundreds of deliveries per day, we’ve heard the company is not seeking to completely outsource the last-mile delivery portion of its business.
Though it’s unclear exactly which companies might have already struck a deal with Instacart, we have heard that some third parties are already making deliveries of Instacart orders. For example, one source told us NY-based Zipments is working with Instacart in New York City, while another said Sidecar is planning to start dropping off Instacart orders as well.
TechSupport obtained a copy of an email sent out to one on-demand delivery company Instacart approached as part of this effort. As part of the pitch, an Instacart rep says the company is looking to become a “valued, long-term customer,” with volume placed in the “hundreds of deliveries per day.” The email also states that Instacart is looking to pay a fixed price for deliveries that are made by partners.
This isn’t the first we’re hearing of Instacart’s plan to have third parties make deliveries for the company. Re/code’s Jason Del Rey reported in January that Instacart CEO Apoorva Mehta described a plan to experiment with outsourcing deliveries, and it would seem that plan is already well underway.
A source familiar with the effort tells us that Instacart is not looking to fully offload deliveries, and that it maintains control of the end-to-end experience through an app developed for shoppers and delivery people. All delivery directions are provided through that app, whether it’s an in-house delivery person or someone contracted through a third-party.
That means Instacart provides the routing for third-party drivers and delivery people making the final hand-off of groceries to the customer, rather than relying on a partner’s logistics infrastructure. Those delivery people are also rated by customers in the Instacart app, whether they are being paid by Instacart itself or one of its partners.
Relying on other companies for some of its deliveries isn’t the only change Instacart has made in the way it does business lately. The company, which recently raised $210 million in Series C funding, recently moved away from a revenue model that relied on a mix of markups on groceries alongside a per-delivery or annual subscription fee. Instead, Instacart has gradually moved to a model where retailers price their own inventory and instead pay the company a fee for sales that take place on the platform.
Instacart declined to comment for this story.
Featured Image: kristin sloan/Flickr UNDER A CC BY 2.0 LICENSE0
SHARES0Share0Tweet0Share0000AdvertisementAdvertisementCrunchBaseInstacartFounded2012 OverviewInstacart is a same-day grocery delivery startup offering delivery in as little as one hour. Focused on delivering groceries and home essentials, Instacart already has over 500,000 items from local stores in its catalogue. Customers can choose from a variety of local stores including Safeway, Whole Foods, Super Fresh, Harris Teeter, Shaw's, Mariano's, Jewel-Osco, Stanley's and Costco. …LocationSan Francisco, CaliforniaCategoriesGroceries, Local Businesses, E-CommerceFoundersBrandon Leonardo, Apoorva Mehta, Max MullenWebsitehttp://www.instacart.comFull profile for InstacartPostmatesFounded2012 OverviewPostmates is transforming the way local goods move around a city by enabling anyone to get any product delivered in under one hour. Postmates' revolutionary urban logistics & on-demand delivery platform connects customers with local couriers, who purchase and deliver goods from any restaurant or store in a city.Postmates is built by a passionate team of engineers, designers, operations and growth …LocationSan Francisco, CaliforniaCategoriesDelivery, Logistics, Shipping, Transportation, E-Commerce, Local, MobileFoundersBastian Lehmann, Sam Street, Sean PlaiceWebsitehttp://postmates.comFull profile for PostmatesLyftFounded2012 OverviewLyft is a peer-to-peer transportation platform that connects passengers who need rides with drivers willing to provide rides using their own personal vehicles. Lyft was started in 2012 with the mission of building a peer-to-peer transportation solution that would help make cities safer, more affordable and better connected. Lyft now operates in 68 cities across the U.S.When using Lyft, passengers …LocationSan Francisco, CaliforniaCategoriesPeer-to-Peer, Apps, Transportation, Collaborative Consumption, College Campuses, SoftwareFoundersJohn Zimmer, Logan GreenWebsitehttp://lyft.comFull profile for LyftSidecarFounded2010 OverviewSidecar is the industry's leading programmatic e-commerce marketing technology. Sidecar delivers customer acquisition, conversion and retention through industry leading automation for online retailers. Fueled by product intelligence, Sidecar leverages data about the e-commerce site, catalog, products, users and the competition to power predictive decision making for Paid Search, Google Product …LocationPhiladelphia, PennsylvaniaCategoriesGoogle Apps, Comparison Shopping, Email, Search, Automotive, SaaS, Internet Marketing, E-CommerceWebsitehttp://www.getsidecar.comFull profile for SidecarZipmentsFounded2010 Overviewzipments is a local logistics platform providing businesses and individuals with the fastest, most affordable same day delivery service available.zipments customers can request local deliveries through www.zipments.com, the zipments mobile app or through a variety of online retailers who have integrated the zipments API with their online shopping carts.zipments serves a variety of sectors including …LocationNew York, New YorkCategoriesLogistics, Postal and Courier Services, E-Commerce, Retail, Mobile, Enterprise SoftwareFoundersGarrick Pohl, Travis Brack, Elliot Nelson.
Multiple sources tell TechSupport that Instacart has recently reached out to delivery and logistics startups like Postmates, Lyft and Sidecar, among others, to initiate conversations around them making deliveries on its behalf. While Instacart is interested in finding partners that can handle hundreds of deliveries per day, we’ve heard the company is not seeking to completely outsource the last-mile delivery portion of its business.
Though it’s unclear exactly which companies might have already struck a deal with Instacart, we have heard that some third parties are already making deliveries of Instacart orders. For example, one source told us NY-based Zipments is working with Instacart in New York City, while another said Sidecar is planning to start dropping off Instacart orders as well.
TechSupport obtained a copy of an email sent out to one on-demand delivery company Instacart approached as part of this effort. As part of the pitch, an Instacart rep says the company is looking to become a “valued, long-term customer,” with volume placed in the “hundreds of deliveries per day.” The email also states that Instacart is looking to pay a fixed price for deliveries that are made by partners.
This isn’t the first we’re hearing of Instacart’s plan to have third parties make deliveries for the company. Re/code’s Jason Del Rey reported in January that Instacart CEO Apoorva Mehta described a plan to experiment with outsourcing deliveries, and it would seem that plan is already well underway.
A source familiar with the effort tells us that Instacart is not looking to fully offload deliveries, and that it maintains control of the end-to-end experience through an app developed for shoppers and delivery people. All delivery directions are provided through that app, whether it’s an in-house delivery person or someone contracted through a third-party.
That means Instacart provides the routing for third-party drivers and delivery people making the final hand-off of groceries to the customer, rather than relying on a partner’s logistics infrastructure. Those delivery people are also rated by customers in the Instacart app, whether they are being paid by Instacart itself or one of its partners.
Relying on other companies for some of its deliveries isn’t the only change Instacart has made in the way it does business lately. The company, which recently raised $210 million in Series C funding, recently moved away from a revenue model that relied on a mix of markups on groceries alongside a per-delivery or annual subscription fee. Instead, Instacart has gradually moved to a model where retailers price their own inventory and instead pay the company a fee for sales that take place on the platform.
Instacart declined to comment for this story.
Featured Image: kristin sloan/Flickr UNDER A CC BY 2.0 LICENSE0
SHARES0Share0Tweet0Share0000AdvertisementAdvertisementCrunchBaseInstacartFounded2012 OverviewInstacart is a same-day grocery delivery startup offering delivery in as little as one hour. Focused on delivering groceries and home essentials, Instacart already has over 500,000 items from local stores in its catalogue. Customers can choose from a variety of local stores including Safeway, Whole Foods, Super Fresh, Harris Teeter, Shaw's, Mariano's, Jewel-Osco, Stanley's and Costco. …LocationSan Francisco, CaliforniaCategoriesGroceries, Local Businesses, E-CommerceFoundersBrandon Leonardo, Apoorva Mehta, Max MullenWebsitehttp://www.instacart.comFull profile for InstacartPostmatesFounded2012 OverviewPostmates is transforming the way local goods move around a city by enabling anyone to get any product delivered in under one hour. Postmates' revolutionary urban logistics & on-demand delivery platform connects customers with local couriers, who purchase and deliver goods from any restaurant or store in a city.Postmates is built by a passionate team of engineers, designers, operations and growth …LocationSan Francisco, CaliforniaCategoriesDelivery, Logistics, Shipping, Transportation, E-Commerce, Local, MobileFoundersBastian Lehmann, Sam Street, Sean PlaiceWebsitehttp://postmates.comFull profile for PostmatesLyftFounded2012 OverviewLyft is a peer-to-peer transportation platform that connects passengers who need rides with drivers willing to provide rides using their own personal vehicles. Lyft was started in 2012 with the mission of building a peer-to-peer transportation solution that would help make cities safer, more affordable and better connected. Lyft now operates in 68 cities across the U.S.When using Lyft, passengers …LocationSan Francisco, CaliforniaCategoriesPeer-to-Peer, Apps, Transportation, Collaborative Consumption, College Campuses, SoftwareFoundersJohn Zimmer, Logan GreenWebsitehttp://lyft.comFull profile for LyftSidecarFounded2010 OverviewSidecar is the industry's leading programmatic e-commerce marketing technology. Sidecar delivers customer acquisition, conversion and retention through industry leading automation for online retailers. Fueled by product intelligence, Sidecar leverages data about the e-commerce site, catalog, products, users and the competition to power predictive decision making for Paid Search, Google Product …LocationPhiladelphia, PennsylvaniaCategoriesGoogle Apps, Comparison Shopping, Email, Search, Automotive, SaaS, Internet Marketing, E-CommerceWebsitehttp://www.getsidecar.comFull profile for SidecarZipmentsFounded2010 Overviewzipments is a local logistics platform providing businesses and individuals with the fastest, most affordable same day delivery service available.zipments customers can request local deliveries through www.zipments.com, the zipments mobile app or through a variety of online retailers who have integrated the zipments API with their online shopping carts.zipments serves a variety of sectors including …LocationNew York, New YorkCategoriesLogistics, Postal and Courier Services, E-Commerce, Retail, Mobile, Enterprise SoftwareFoundersGarrick Pohl, Travis Brack, Elliot Nelson.
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