Instacart to cut 1,900 jobs, including its only union roles

While I like and use Instacart, the model is wrong. I am paying too much for a slightly unreliable service and the employees aren&#x27;t getting paid enough. The stores should provide the shoppers, delivery should be a separate service, and the cost should be about a $15-30 premium for a large grocery order (15+ minutes of order picking + delivery similar to a cab ride). That leaves the ordering platform, which might be a nice niche for Instacart to provide across multiple stores.<p>Anyway, this has been a tough business all the way back to Webvan!

I don’t understand why there aren’t ghost groceries, similar to ghost kitchens or warehouses. Delivery is now large enough that having someone walk around a large store optimized for display, one order at a time, is super inefficient.<p>Just have warehouses&#x2F;stores optimized for delivery and batch the orders. Boost productivity and start paying people decent already.

From what I understand from these comments, it sounds like Instacart is going to leverage labor at union staffed stores, like Kroger, to fulfill on its business opportunities.<p>This seems like a clever form of arbitrage, or shall we call it, disruption?<p>Is this the new frontier (or perhaps I&#x27;m just late to the game in understanding it) where larger online businesses (like Amazon) shift away from full time employment (with the costs associated with it) and let some other &quot;local&quot; or &quot;brick and mortar&quot; legacy businesses try to keep those employees with living wages and healthcare employed while those same &quot;frenemies&quot; (purchasing from them, but also competing with them) avoid those costs?<p>I spoke to an accountant friend the other day who works for a local independent grocery store. They are really trying to keep their low wage workers on payroll, despite having revenues cut in half because of COVID. Everyone is shopping at Amazon+WholeFoods. If those workers lose their jobs, will they be homeless? I don&#x27;t think consumers care or think about them, even though they might be their neighbors.

It seems pretty clear the motivation here is that Instacart doesn&#x27;t need&#x2F;can&#x27;t afford the workforce and is instead probably finding that store employees are able to fill the orders via some partnership with the big chains for a cut that is more margin efficient than hiring their own &quot;shoppers&quot; to do so.<p>Also just generally this makes sense... a Safeway&#x2F;Shoprite&#x2F;Whole Foods employee can probably navigate and fill a cart faster than a random shopper who might not be as familiar with every store&#x27;s layout. For Instacart this is a huge win, faster fulfillment and probably even higher accuracy of fulfilled orders. For chains this is also a great win since they can utilize their employees more, make a little extra off Instacart, and potentially even optimize their store layouts better to cater to this new style of shopping.<p>Also the headline is quite misleading given that there are only TEN union workers... so &quot;all of its union roles&quot; is misrepresenting the whole thing a bit.

Just last week I made a large Instacart order to Costco, and the shopper was nice enough to leave the Costco receipt in one of the bags so I could compare.<p>Instacart Receipt: $340 + $35 tip --- $375<p>Costco Receipt: $245<p>I cancelled my Instacart premium membership after that and will not use them again. I just can&#x27;t justify a $90+ upcharge before tip. IMO Instacart took way too much cut for themselves.<p>I have been sticking to my local grocery who uses their own in-house shoppers. I miss some of the items I am used to from Costco but at least won&#x27;t be paying 30%+ premiums.

I always get a kick when businesses do exactly what the numbers said they would do and other people act surprised.

<i>Instacart Inc. is cutting about 1,900 employees’ jobs ... as the company seeks to boost its ranks of contract workers.</i><p>It&#x27;s important to note that &quot;employees&quot;, in the US, are entitled to benefits [0] that &quot;contractors&quot; aren&#x27;t. As more and more employers try to glorify the gig economy or fire employees in favor of contractors, it is more important than ever to make sure that critical benefits, especially affordable health coverage, are uncoupled from employment status.<p>0 - <a href="https:&#x2F;&#x2F;www.investopedia.com&#x2F;articles&#x2F;personal-finance&#x2F;120914&#x2F;8-federal-laws-protect-employees.asp" rel="nofollow">https:&#x2F;&#x2F;www.investopedia.com&#x2F;articles&#x2F;personal-finance&#x2F;12091...</a>

Dumb question: is this in any way related to California Proposition 22?

I don’t know much about Instacart as I live in Scotland but what they have done (Andrew Kane in particular) for the Ruby on Rails community through their open source is incredible. Kudos.

I wish Costco would launch it&#x27;s own service rather than use Instacart. Instacart has been a hit or miss but my Amazon Fresh&#x2F;Whole foods delivery have been significantly more consistent. Like other said, it kinda sucks to pay more for the groceries, the fees, the tips, and in the end you get mediocre service.

Imagine if these unions start a competitor, it would be glorious and we can call it a co-operative.

This is a very dishonest headline 10&#x2F;1900 were union.

I genuinely feel for the people laid off.<p>With that said, wont Instacart, and other similar business models that rely on grocery stores and human labour to fulfill the orders, simply start becoming obsolete in the coming few years as robotic fulfillment centers[0] start popping up all over the place?<p>Perhaps these centers will not service the most rural of places, but then again I imagine these services (i.e Instacart) are mostly used in more densely populated areas anyway.<p><a href="https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=4DKrcpa8Z_E" rel="nofollow">https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=4DKrcpa8Z_E</a>

I always hear progressive views about unionization which I agree with and they make sense. What are some of the disadvantages of unions?<p>Edit: Before you hit that downvote button, can we not have a balanced discussion about pros and cons of Unionization? I am a progressive and a Democrat but I want to know both sides of the coin. For people saying this question is of bad faith, I am not really asking &quot;What are the advantages of murder?&quot; here, Unionization is a complex topic and it would be interesting to understand that it&#x27;s not just companies exploiting employees, but there is a lot more to it than that.

I would love to live in a world where we do away with the term &quot;employee&quot;.<p>Where people were just part of a team.<p>Where your boss didn&#x27;t have to be concerned with which doctor you went to.<p>Where you could work for $5 an hour for a cause you believed in, and not have to worry about making ends meet.<p>Some day we need to #RefactorAmerica.

Both with Dropbox and Instacart, their business model didn&#x27;t make sense to me. But they still became billion dollar companies that will go bankrupt in a few years after making many people really wealthy. I guess it&#x27;s a different way to play the game

Wonder why they don&#x27;t partner with Uber&#x2F;Lyft so the logistics are always there, on demand... since the radius of delivery is always near, I can&#x27;t see it being that pricier then having to have a shopper and driver.<p>But also, hmm, delivery is so hard here.

Read about them earlier today, they are getting ready for IPO. Can&#x27;t help to think news like this has to do with building a better offer. The market likes these kind of news.

At the end of the day, the people will get hired back by somebody who needs their groceries delivered. Meanwhile, this makes Insta more of a software company, and lets the stores deal with hiring.<p>The market is going to love this because it will de-risk Instacart. Grocery stores should love this because they will be able to increase utilization of their employees. And of course employees, despite the popular narrative, will actually gain more power because they would have more localized work, and less competition. It&#x27;s a win-win-win.

I am not surprised considering major grocery stores in Greater Seattle Area all have their own curbside pickup&#x2F;delivery services.

tldr; Instacart is shifting work to the grocery store&#x27;s employees to pick and pack grocery orders instead of having Instacart employees do it.<p>FWIW, the union referenced is at a Marianos, and Marianos (and all Kroger owned groceries) are unionized already. So the work is shifting from one union to another union.

Instacart is dropping these positions because they are trying to trim down and look like a good buy.<p>Instacart is Homegrocer 2.0; and by that I mean an abysmally managed top-only company that only takes and does no re-investment. From what I can see their business model is, minimal investment, maximum unsustainable sort-term profit, and sell or go bankrupt while floating upon pool-in-yacht.<p>Their &quot;customer care&quot; staff are assigned multiple shoppers and customers to deal with simultaneously, and they are out of country NOT trained in English or US culture, as such they are clearly unable to communicate effectively; queue lines in the thousands.<p>I spoke with one once who told me they were NOT ALLOWED to communicate the fact they were dealing with multiple customers, with people just constantly spamming them because they could not keep up; a system which will obviously bottle neck at any load increase. Oh, and, according to her the entire system is &quot;managed&quot; by &quot;If&quot; statement masquerading as an &quot;AI HR&quot; software.<p>Once the vaccine comes out in full, Instacart will most likely be no-more or sold off.

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