Business

Does NYC need yet another delivery startup? Instacart elbows in

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New York’s market for on-demand delivery startups feels like it’s just about to reach capacity. What little room was left has just been filled by Instacart‘s new speedy grocery service.

The company, fighting the stereotypes of years past (thanks Webvan), has delicately expanded over the past few years. First it launched in the Bay Area. Then, Chicago. Then Boston, Washington D.C. and Philadelphia. Now, it’s in New York, and plans to expand rapidly for the rest of the year, according to founder Apoorva Mehta.

But first, let’s look at how this market ballooned recently in the big city.

Over the past year, delivery services like WunWun and Postmates duked it out, serving up necessities in as little as 30 minutes. FreshDirect and Peapod continue to wage a similar war — they’re two of the cheapest ways to buy groceries in the big apple. Seamless and Grubhub merged into one giant takeout menu. eBay kicked off one-to-three hour deliveries from select stores with eBay Now. And to top it all off, even Amazon may launch a grocery delivery service in New York this year.

And then there’s Instacart.

Instacart is a simple service which provides fast, same-day grocery delivery from just a few chains like Whole Foods. And despite all the crowding, Instacart has a decent chance of success.

For the most part, New York’s grocery services offer next day delivery. Services that do provide immediate delivery, such as WunWun and Postmates, aren’t well suited for large grocery orders, according to our own internal tests. But Instacart, although strangely limited to just Whole Foods in New York, has the potential to serve a key niche: fast grocery delivery for New Yorkers who either don’t plan ahead or physically can’t get to the store.

While the model may not be easily replicated in New York, we’re betting that New Yorkers will make room for Instacart — for some out of laziness; for others, necessity. The service is currently limited to certain areas of Manhattan, but Instacart claims it will expand “throughout the city in the coming months.”

More about the companies and people from this article:

Amazon.com, Inc. (NASDAQ: AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth's Biggest Selection. Amazon.com, Inc. seeks to be Earth's most customer-centric company, where cu... read more »

Instacart (YC S12) is a same-day grocery delivery startup offering delivery in as little as 1 hour. Focused on delivering groceries and home essentials, the company is looking to expand to other verticals very soon. Instacart already ... read more »

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