Today the popular on-demand grocery delivery service Instacart announced that it is bringing its service to two new cities: Oakland and Berkely. The two cities join its other active locations, all of which fall inside of the Bay Area.
Instacart appears to be succeeding where other firms have failed; it appears to have made grocery delivery economically viable. The service earns its keep by charging a fee for delivery – it costs more to get your goods sooner, and you tip delivery people on top of that – and by charging small markup on items sold.
The combination, of fees, a cut, and tips appears to work. According to the firm, the decision to add new cities to its service area came “[a]fter proving out and perfecting the customer and personal shopper economics in San Francisco.”
Where might Instacart be headed next? I mentioned Seattle and Portland as potential likely next locations for the service to expand to. The company’s own Apoorva Mehta demured, calling them too small for their current model. He did note instead that the company has year-long plans to add new cities to its list of supported markets.
The company will, however, follow demand; where folks that want to become its users are the loudest, may get what they want. Apoorva, in a statement provided to TNW, stated that its decision to launch in Oakland and Berkeley was “based on the phenomenal inbound customer demand that we have seen from those areas.” If you want Instacart in your neck of the trees, make noise.
Instacart has evolved since its launch, including adding new stores to its roster – Costco, Whole Foods, Trader Joe’s. The pace of its geographical expansion will be interesting to watch, as the company enters markets with demographics that are economically different from the affluent San Francisco.
Top Image Credit: lord enfield