How Does Instacart Make Money?

How Does Instacart Make Money? | See Its 3 Revenue Sources

Posted by

Instacart is a delivery service for groceries where you put in your shopping list and then have the items delivered to your door within an hour.

Nowadays, you can shop on Instacart through a desktop or mobile device. You can start by searching for products based on what you want but don’t know where to find them. Then add them all into your cart and checkout through your credit card information or PayPal account. And wait for an hour or so later with a dispatch shows up outside your home with all those goods ready for purchase.

But then, how does Instacart make money? And how has it become so popular today? Read on to find answers to this question and how you can also make money from using it.

What is Instacart?


Instacart is a mobile app and grocery delivery service that allows you to shop for groceries online and have them delivered to your door. It’s a convenient way to get all the items from your weekly shopping list returned quickly without spending hours of your time wandering around crowded stores.

The company was founded in 2012 by Apoorva Mehta and Seth Gabel, who saw a market opportunity: grocery stores were under pressure from internet-based businesses that allowed customers to buy everything they needed online, but there was no way for shoppers to get their groceries delivered right away.

So they built their delivery service, which could keep up with their competitor’s efficiency while still offering the same personal experience as shopping at a physical store.

What Does Instacart Do?

You probably have a vague idea that Instacart is a grocery delivery service. But it is so much more than that. Instacart is also:

  • A tech company because it uses technology to deliver groceries and make your life easier.
  • Logistics company, because its drivers get your groceries from the store to your door in just an hour.
  • A retail company because it buys all of the food from its partners. And then sell it to you for prices that are 50-75% cheaper than what you’d pay at in the store, and sometimes even more affordable than that.
  • A food delivery company, because none of this would work without its shoppers picking out precisely what kind of produce and protein they need for their weekly meal plan.

RELATED ARTICLE: Magento Solution partners: A Complete Guide.

How Does Instacart Work?

how Instacart works

You tell Instacart what you want, and they deliver it to you in around an hour. The company uses a combination of humans, personal shoppers, and algorithms to fulfill your orders. Because the company has drivers deliver the groceries from warehouses all over town, rather than having each shop stock its own inventory on-site, it can offer lower prices than traditional grocery stores.

How Does Instacart Work For Users?

As an Instacart shopper, you can make money by:

  • Shopping online or with the app at any time of day.
  • Shopping at any store that accepts Instacart, including your local grocery store and Costco.
  • Choosing whether to shop with a personal shopper who pays more or not.
  • Getting groceries delivered directly to your door within two hours of ordering them.

How Does Instacart Work For Stores?

In addition to offering customers convenience and efficiency, Instacart also benefits stores by providing another revenue stream. Stores can use Instacart to increase sales and customer loyalty and improve profit margins.

How Does Instacart Work For Shippers And Drivers?

Shippers and drivers are independent contractors who work with Instacart to deliver groceries. Shippers use a computer or mobile app to shop for customers, while drivers pick up the items at the store and deliver them.

Because they’re independent contractors, shippers and drivers set their schedules and get paid directly by customers through Payhip.

Instacart funding, valuation, and revenue

Instacart is a US-based grocery delivery service that was founded in 2012. The company works with local retailers to deliver groceries. Customers can shop at their favorite stores, including Whole Foods Market and Costco, through the Instacart web or mobile app.

The company has raised over $2 billion in funding from investors like Sequoia Capital and TPG Growth. According to Forbes, the venture capital firm Sequoia Capital led the Series D round of investment of $400 million in October 2018 which valued Instacart at more than $7 billion, making it one of the most valuable startups in America today magazine.

Its services aim to increase online sales volume by appealing directly to consumers without cars or where transportation difficulties prevent them from shopping regularly at conventional supermarkets. Regardless of these barriers, such shoppers can now have access to shopping online with friendly prices along with quick delivery.

How Does Instacart Make Money?

Instacart makes money by charging consumers for its services at the end of the day. Whether you’re a customer or an employee, you’re paying for something that was once free. Here are a couple of ways Instacart makes money:

1. Delivery Fee

The delivery fee is charged when an order is placed on your account. It’s usually around $5 per order and goes to the driver who picks it up and brings it to you. If you pay with cash or Venmo, there’s no delivery fee. But if you use a credit card or debit card and can’t pay in cash, this cost gets added right into your total bill when they collect payment at your doorstep.

2. Service Fee

The service fee is another small charge that pays Instacart employees who help get orders ready before they leave their warehouse locations or grocery stores. This includes workers whose job is to fill orders, make sure they’re adequately packaged, scan them into their computer systems, load them onto trucks, unload them from trucks, deliver them to customers’ doors, etc.

3. Offering Membership Plans

Memberships are optional plans offered by Instacart, where shoppers receive discounts on certain products depending on how much time has been spent shopping online via their app. They also get special promotional codes sent directly through email, which can save even more money on future purchases.

How to Make Money from Instacart as an Instacart Shopper

How to Make Money from Instacart as an Instacart Shopper.
How to Make Money from Instacart as an Instacart Shopper. Image Source: TechCrunch

If you’re a grocery shopper, you can make money from Instacart by signing up for its delivery program. You pick up the groceries from local stores and deliver them to customers within the time frame specified by your customer.

However, you need to sign up on their website to qualify. The minimum age is 18 years old, though they also require that applicants be physically capable of carrying heavy items as needed, e.g., 50 pounds.

Then you must first undergo a compulsory background check that you must pass. This includes criminal record review and drug tests done through HireRight before being allowed onto the platform. Also, you must have reliable transportation such as a car or bike to help you move around for delivery runs.

In addition, the platform will train you as a shopper in-person with an online component as well. One benefit of being an Instacart shopper aside from making money is that you get to enjoy the flexibility of the schedule. This means you can choose when you want to work and decide how many hours per week or month depending on your needs.

How to signup as an Instacart Shopper?

To make money on Instacart, you must first sign up for an account. You can do this in a few seconds by visiting the official website and clicking “Sign Up.”

Once you’re signed up, you’ll be able to browse through available jobs and complete them at your own pace. As soon as you’ve finished your grocery run for the day, your earnings will appear in your account.

The following steps are simple: withdraw funds from this balance or add more money by credit card or PayPal to keep working.

How Much Does Instacart Pay Users?

Instacart pays shoppers per delivery. The amount you earn is based on the distance you have to travel and how much time and gas it takes to get the items. In general, users who deliver many orders make more money than those who don’t.

The average pay rate for an Instacart shopper is $14 per hour, which comes out to just over $360 a week. That’s about $17k a year, not bad for part-time work.

How to Land a Tech Job: Insider Advice.

Customer Service

The company’s customer service is among the best in the business. They are extremely helpful and responsive, knowledgeable about all products, friendly and professional. You can contact them by phone (1-800-944-6708) or email.

The Instacart website also has its customer service section so that you can find answers to the most common questions there as well.

What is Instacart app?

Instacart is an online grocery delivery service that lets you order groceries online and deliver them to your door. You can find everything from fresh produce, meat and seafood, bakery items, and household supplies on Instacart.

Instacart has over 10,000 stores in more than 70 markets across the country, so there’s probably one nearby. If not, you can also shop for wine, although wine cannot be shipped through Instacart.

Benefits of Using Instacart

Instacart has immeasurable benefits both for getting groceries and for making money. Below are a few of the benefits it holds:

1. Convenience

Instacart’s most significant advantage over traditional grocery stores is the convenience of having your groceries delivered directly to your door. There’s also no need to lug heavy bags home from the store, which is a bonus if you’re on foot or carrying a baby in one arm. Since you’re not limited by a physical location and can shop anytime, it’s easy to find precisely what you need when you need it.

2. Competitive Price

Although Instacart doesn’t have the same selection as traditional grocery stores, its prices are competitive with other online retailers like Amazon Prime Pantry. However, they’re higher than Walmart Grocery Pickup, at least for now.

For example, we compared prices on three everyday items from several different vendors:

  • Milk from Amazon Fresh.
  • Cheese from FreshDirect’s Prime Now.
  • Eggs from Fresh Direct (Prime Now).
  • Bread from Amazon Pantry (Prime Now).
  • Bananas from Prime Pantry.
  • Applesauce from Jet Market Pantry.
  • Butter (the only thing we could find) is available through all four services listed above.

The mixed results showed that most products cost roughly equal amounts regardless of where they were purchased, though some seemed much cheaper at certain places than others. For instance, milk was cheapest at Jet Market Pantry ($3 vs. $5), while fresh strawberries cost more ($9 vs. $6). However, since Instacart offers delivery within one hour on orders over $35, this makes sense since spending less time shopping means there’s less chance of buying something else along with your order.

Cons of Using Instacart

While Instacart is a convenient service, there are some drawbacks. First, you’re limited to the stores and products available in your area. If you order from a store that isn’t close by, or if they don’t have what you need, then it’s not going to be possible for them to deliver right away.

Second, you may find yourself unable to order from certain stores because they don’t work with Instacart or don’t provide delivery services at all, or perhaps even just because they’re closed when you try placing an order.

Finally, keep in mind that shopping online isn’t always as easy as picking up a phone call or heading over to meet up with someone face-to-face; there may be times when something isn’t quite right with your delivery, and you need help getting things fixed up before it arrives on time, or at all.


Instacart is a grocery delivery service that charges a $3.99 delivery fee, plus an additional variable amount based on the size of your order. The company makes money by charging a percentage of the orders, a cut from both customers and retailers, and setting a delivery fee that is sometimes waived.

You may also like t read our latest article, How Does Snapchat Make Money?