Report: Instacart cuts costs, hikes fees

Reducing expenses and increasing prices are two ways for a company to make money, and Instacart is reportedly doing both.



According to the San Francisco Business Times, Instacart is reducing how much drivers get paid for each delivery, as well as the commission paid on each item. In the San Francisco market, the pay per delivery will be reduced 63% to $1.50 from $4.00, while commission per item will be cut 50% to 25 cents from 50 cents.



Instacart has also raised its customer fee for annual unlimited deliveries 50% to $149 from $99. The fee for one-time delivery has also increased 50%, to $5.99 from $3.99.



“We have made some recent rate changes to reduce variability in how much shoppers earn, and we are constantly innovating to help shoppers get more orders,” Instacart said in a statement to the Times. “After these changes, our shoppers will earn, on average, an effective rate of $15 to $20 per hour.”



Instacart recently announced a deepened partnership with Whole Foods Market that will include the co-development of new e-commerce solutions and increase the number of Whole Foods stores with embedded Instacart shoppers.



It is unclear whether this expanded partnership played any role in Instacart’s moves to increase profitability. What is clear is that even as online grocery delivery grows in popularity, an increasing number of players are also entering the mix, which may have been one driver of these decisions.