Abstract

The case discusses the rise of one of the leading grocery delivery services in the US, Instacart Inc. In 2012, Instacart was founded by Apoorva Mehta along with his two friends, Max Mullen and Brandon Leonardo. The company provided its users a web portal and a mobile app through which they could place grocery orders. Through its workers, it then delivered the groceries to the shoppers’ doorsteps in as little as one hour. It entered into partnerships with many retailers from where its workers shopped for groceries for customers. Instacart received funding from many venture capitalists and retailers, and experienced rapid growth during the initial years. It generated revenue from charging a delivery fee, monthly subscriptions, advertising, etc. However, it soon started facing challenges from growing competition, and from its own workers who alleged that the company had misclassified them as independent contractors. Further, Instacart struggled to win customers’ trust, and attract new customers. In 2017, e-commerce giant Amazon.co, acquired one of Instacart’s biggest retailer partners, Whole Foods. This deal was expected to pose a big challenge for Instacart going forward. It remained to be seen how the grocery delivery service would survive the challenges that could come its way.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the concept of the sharing economy.
• Evaluate Instacart’s business model and understand the reasons behind its success.
• Understand the characteristics and struggles of an entrepreneur.
• Identify the challenges faced by Instacart and explore strategies that the company might adopt to overcome them.

Keywords

Instacart,Online Grocery Delivery,Apoorva Mehtam,Entrepreneur,Sharing Economy,Whole Foods,Amazon,Grocery Shopping,Retailers,Instacart Express,Webvan