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OPINIONTechnology

Instacart’s Worker Woes May Influence Future Plans

Delivery demand grows, but profits have been hard to find

The Lempert Report

Earlier this month, between Nov. 3 through Nov. 5 to be exact, Instacart workers went on strike to protest declining wages, cuts in their tips and having to drive longer distances.

I first reported how Instacart shoppers were turning to Facebook forums across the country to unite against the company when I was contacted by a very disgruntled worker here in Los Angeles years ago.

Instacart is reportedly preparing for its IPO, which comes after the company has raised more than $1 billion in venture capital funding. 

According to the U.S. Department of Labor, U.S. consumers allot more in their budget for groceries than restaurants, so companies such as Doordash and Postmates are now seeking to expand their reach into more grocery markets, which clearly may be perfect timing to steal dollars from Instacart. 

Postmates just announced a partnership with Walgreens and Duane Reade stores—all 174 of them—in Manhattan and Brooklyn. Walgreens customers won’t have to pay delivery fees if they subscribe monthly to Postmates Unlimited for $9.99. Postmates hopes to eventually expand that partnership nationwide. 

“In the last year, orders from convenience and drugstores have increased by 68%,” said Craig Whitmer, vice president of merchant business development for Postmates. Its first grocery partnership occurred in 2015 with 7-Eleven, the largest convenience-store chain. 

In August, Doordash signed an agreement with e-commerce company Mercato Inc. to ensure same-day delivery from 750 grocers in 22 states. Uber Eats is currently testing grocery delivery in Australia, while negotiating with grocery chains in Europe and North America. 

While the delivery battle continues its still important to note that no one is making money on delivery, as we will see when Instacart’s IPO filing becomes public and the curtain is pulled back.

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