Instacart is a grocery delivery service that has gained more traction during the shutdowns due to the coronavirus pandemic.
With Instacart, customers choose stores to shop from online, fill up their online carts, check out, and input a payment. From there, Instacart organizes its workers to shop for the items and deliver them straight to the customer within an allotted time-frame, often on the same day the order was placed.
Instacart is one of the main sources of grocery delivery in the United States. In this Instacart statistics article, we’re going to look at how far the company has come in the grocery delivery market, if Instacart has made a profit or not, how many customers they have, how the Covid-19 pandemic has affected business, and much more.
We’ve noted when data sources are from our proprietary articles and when they’re from trusted third-parties.
Instacart Overview
Instacart was founded in 2012 by Apoova Mehta, who was the company’s first delivery, shopper, and driver all at the same time. He incentivized himself by not doing any grocery shopping until he had the app made and ready to test, according to an interview conducted by Jennifer Wang for the Forbes article she authored, titled Instacart Founder Apoorva Mehta Becomes A Billionaire After New Funding Round.
Almost nine years later, Instacart has grown into a multi-billion dollar company providing grocery, alcohol, and prescription deliveries for over 5.5 million people.
Only one month after its launch, Instacart received $2.3 million in an attempt to become the “Amazon of groceries”. Now the company has a valuation of $13.7 billion, though it is still a private company.
When the company began, only those in the San Francisco area, where it’s headquartered, could use Instacart’s services. Now, 85% of households in the United States and 70% in Canada have access to Instacart. Find if it’s available in your area.
As to be expected, the Covid-19 pandemic caused a huge impact on Instacart’s bottom line. Though Instacart does not post a lot of their financial and user data, what we do have shows just how much of an increase they had. For instance, in 2019 Instacart had 130,000 shoppers. A year later that number is now 500,000 with an anticipation that it will soon reach 750,000 shoppers, if it hasn’t already.
Instacart Revenue
Instacart has seen a steady increase in revenue over the nine years it’s been running. While Instacart is not a publicly-traded company and therefore does not have to provide revenue statistics, we have been able to estimate based on information. Here are more Instacart statistics we have found.
In less than a decade, Instacart grew from a million-dollar company to a several billion dollars company:
Sources: Sramana Mitra, Forbes, Medium, Toptal and Business of Apps
Has Instacart Made a Profit?
Though Instacart has seen some amazing years of growth, like all delivery and rideshare companies we’ve discussed on The Rideshare Guy, it hasn’t made much in terms of profit.
Instacart expects to make a net profit of around $10 million in April, according to The Information. The eight-year-old company is said to have lost a total of $300 million last year.
Customers reportedly bought around $700 million worth of goods through the service in each of the first two weeks of April. That’s an increase of about 450% from December, the report suggests. Instacart declined to comment to The Information about its finances. It mainly makes money through delivery fees, taking a percentage of grocery orders and ads on its app. – Forbes
In short, Instacart has turned a profit, but it took almost a decade and a life-changing—and economy-changing—global pandemic for it to come about. Despite the increase in demand, the total profit is only estimated to be about $10 million dollars.
For a company valued at $13.7 billion, that’s less than 1% profit. It is anticipated that Instacart will go public in 2021. If this is the case, it would certainly be worth keeping an eye on, and possibly investing in.
If you’re interested in learning how to buy stocks once Instacart does go public, check out our article How to Make Money with Free Stock Trades: Best Stock Buying Apps.
How Many Customers Does Instacart Have?
One of the most commonly sought Instacart statistics centers on the number of customers Instacart has. Instacart has clearly tried to stay competitive by having lower fees than its competitors, showing that the need for more customers is always at the forefront.
It is clear that Instacart has continued to keep their eyes on their customers as they have continued growing by at least a million new users per year over the last few years.
The latest information goes through the end of 2019, with the understanding that shutdowns relating to the coronavirus pandemic in 2020 have pulled in more users than previous years.
Source: Progressive Grocer and Business Of Apps
How Many Shoppers Does Instacart Have?
An Instacart shopper is one of the many people who are doing the work. They go into the store, shop for the food, pay for it using their pre-paid Instacart card, and deliver it to the customer. But in articles on Instacart statistics, one question that’s elusive is how many shoppers does Instacart really have?
Some stores have in-store shoppers that do the shopping and bagging, while a driver for Instacart would simply have to go in and pick up the bags and deliver them. Regardless of whether we’re talking in-store shoppers or what are referred to as full-service shoppers, that number has grown considerably during the pandemic.
Toward the beginning of the 2020 pandemic, Instacart grew its shopper base from 200,000 to about 350,000, according to Natasha Mascarenhas from Tech Crunch. It was expected that Instacart would continue expanding its shoppers to reach 750,000 by the end of 2020 to meet continued added demand during the pandemic.
In March 2022, Instacart announced in a press release it has 600,000 Instacart shoppers.
Instacart shoppers can expect to make between $13 and $25 an hour, depending on their experience levels, market demands and familiarity with the stores. It may not sound like there is much thought that goes into shopping for other people’s groceries, but trust me, it takes strategic thinking and planning to earn the most.
In an RSG article Instacart Pay: How Much Does Instacart Pay Shoppers in 2021?, we break down how to make the most money, what your expenses are, and how one driver made $2,000 in one week as an Instacart shopper. If you are looking for another side hustle, this is a great one.
Sources: Huffpost, Vox, Supermarket News, TechCrunch and Business Of Apps
How Does Instacart Make Money?
Every company needs to make money somehow. Otherwise they wouldn’t stay in business very long. Instacart is no exception.
Instacart makes money by charging their customers service fees, delivery fees and more. Of course, the customer can save money in the long run by buying a membership—which also feeds into the company’s earnings.
Instacart also charges more for each item than the stores tend to charge to help turn a profit. Instacart says the difference in prices for some stores are as little as 5% but that the average is 15%; however, it’s been found that the average is closer to 23%.
They also make money from in-app advertising.
How do shoppers make money?
Knowing how the company makes money begs the question, how do the shoppers earn their keep?
On the Instacart shopper app, they break down shopper earnings as follows:
- Batch Payments — A Batch Payment is determined by the complexity of the batch including the number of items, units, weights, store type and distance. As part of this payment, shoppers are given $0.60 per mile (at least that is the current rate in the Minneapolis market as of February 2021).
- Peak Boost — During a boost, an additional dollar amount is added to shopper earnings. If a batch is part of a “Peak Boost”, it will have a flame attached.
- Customer Tips — Shoppers keep 100% of the tips given by customers.
Overall, there is no specific formula for shopper pay Instacart uses that they have made public. If you’d like to help us make this Instacart statistics article more robust and know how Instacart calculates driver pay, reach out to us at harry[at]therideshareguy.com.
Number of Cities in Which Instacart Operates
Four years ago, Instacart was available in just 25 cities. Fast forward two years and that number had grown to 4,000. Another two years and you’ve got 5,500. In fact, every state in the U.S. now offers Instacart—it’s services are now available to 85% of the United States and 70% of Canada.
12 major U.S. cities that have Instacart:
- Atlanta
- Austin
- Boston
- Chicago
- Denver
- Houston
- Los Angeles
- Miami
- New York City
- Philadelphia
- Seattle
- Washington, D.C.
- And more
Sources: CB Insights and Business Of Apps
Is Instacart Good for the Local Economy?
Left out of articles on Instacart statistics is whether or not Instacart is good for the local economy. When a new type of technology comes out it often puts older technologies out of business. Think cassette tapes when CDs came out, taxis when rideshare came out, or books when Kindles came out.
However, that’s not the case with Instacart. Instead, it is their goal to work with and help grocery stores, which is exactly what they’ve done.
A recent study done by Robert Kulick of NERA Economic Consulting looked at the impact Instacart had in California, Illinois, New York, and Washington. The study found that in 2019 Instacart lifted grocery revenue by more than $620 million and created over 23,000 jobs. Not jobs including the shoppers for Instacart, but jobs at the grocery stores themselves.
Does Walmart Use Instacart?
Everybody knows the original cost cutter is Walmart. The dream is getting the known savings from Walmart delivered right to your front door. But is it possible?
The short answer is yes. The long answer is not everywhere. To see if you can have Walmart items delivered via Instacart in your area, click here. If it isn’t available yet, you can enter your email to receive an alert when it comes to your area.
In the meantime, Walmart does have their own delivery service, Walmart+. Similar to the membership Instacart offers, they will deliver for free as long as you pay the membership.
Instacart Controversies
Accused of Tip Stealing
Instacart, like most delivery companies, has a minimum amount that their shoppers will make. However, at one time they did not give shoppers all of the tips, or rather Instacart cut shoppers’ pay if the customer tipped enough to cover that minimum earnings.
The minimum for each batch was $10. What would happen is if the customer tipped $3, then Instacart only paid $7 to make up the full $10. But if that same customer hadn’t tipped at all, the shopper would have received the full $10 from the company.
At first glance, that may seem generous where if the customer doesn’t tip enough, the company makes up the difference. But, the truth is most of the time you make more than the minimum in a batch as it is. Right now, I typically don’t take a batch if it pays less than $15. On closer inspection, it really just looks like Instacart was trying to be cheap and not paying their shoppers what they deserved.
Learn more about the tip stealing issue in The Verge article Instacart revises controversial pay policy after accusations of tip stealing by Andrew J. Hawkins.
Tip Baiting
When more people started ordering through Instacart at the start of the pandemic, the current shoppers employed by Instacart couldn’t keep up with demand. This meant people had to wait longer to get their groceries.
What some “clever” customers did was offer large tips in the app up front knowing they would change it—or even remove it—after they got their delivery. When a shopper opens the app, they would see a batch that estimates they will make $107 instead of the standard $7 to $20 most batches make. Of course, the shopper would take that batch thinking they got a very generous customer.
Once the shopper would deliver the order, the “nice customer” would then take the tip away. The customer gets their order fast, and the shopper makes less money. Instacart has taken steps to ensure this doesn’t continue, but it does still happen.
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Summary: Instacart Statistics
Since Instacart’s inception in 2012, it has created a universally known platform for customers to order groceries and expanded the gig work economy. While the coronavirus pandemic upended several businesses, Instacart grew its business and met the demands of millions facing a new reality of shelter-in-place and shutdowns forcing them to stay home.
With the anticipation of going public in 2021, Instacart is a company to watch over the coming months to see if the introduction of vaccines slows the demand for grocery delivery services or if the general public will continue shopping from home.
In this Instacart statistics article, we elaborated on how Instacart makes money, pays drivers, and how many customers Instacart has. Let us know in the comments if you have more questions about Instacart!
-Tyler @ RSG
