You’ve probably seen it floating around online by now: Grocery delivery app Instacart is laying off nearly 2,000 of its 10,000 in-store shoppers. Included in those layoffs are all the Instacart shoppers who voted to form the app’s 10 first — and only — union in February of last year.

Angry quote tweets from advocates for gig economy workers and unionization have done nothing to stop the service from attracting droves of users and raising hundreds of millions of dollars. The reality is that Instacart isn’t going anywhere anytime soon. The company is set to IPO later this year at a rumored $30 billion valuation, and raised $525 million in 2020 alone across three funding rounds. 

In the past, we’ve noticed that Silicon Valley unicorns like to shrink or slow their rate of growth ahead of IPO, possibly to reign in a rapidly swelling size that puts the company under pressure to deliver on an unrealistic valuation. Throughout 2020, Instacart’s job listings dipped significantly, going from 150 at the start of the year to under 100 in the summer and early fall. But the company isn’t slowing itself down like some of its unicorn predecessors have. Today, it’s job listings are up 29% from around this time last year.

Clearly, the layoffs aren’t a sign that Instacart is hanging by a thread. Instead, the layoffs were announced as part of a new business model that allows retail partners to use Instacart’s technology to organize curbside grocery pickups, allowing Instacart to further cut costs.

In October, we chronicled the rise of online grocery shopping due to the pandemic and wondered if traditional grocery stores, now eager to launch their own delivery services, would be able to compete with Instacart’s established customer base. The answer to that question appears to have been, “Why beat them if you can join them?” 

Even with the newly passed Prop 22 allowing it to avoid paying shoppers minimum wage, Instacart has perhaps realized that the cost of employing thousands of shoppers, even at an extremely low rate, is an extremely expensive endeavor. Now, that burden has been offloaded onto its partnered stores which are using their own employees in conjunction with Instacart’s platform to organize grocery deliveries.

In the past, we’ve noticed that Silicon Valley unicorns like to shrink or slow their rate of growth ahead of IPO, possibly to reign in a rapidly swelling size that puts the company under pressure to deliver on an unrealistic valuation. Throughout 2020, Instacart’s job listings dipped significantly, going from 150 at the start of the year to under 100 in the summer and early fall. But the company isn’t slowing itself down like some of its unicorn predecessors have. Today, it’s job listings are up 29% from around this time last year.

LinkedIn headcount data, on the other hand, shows there’s no sign of the freight train stopping. The company’s workforce nearly doubled since last year, adding 4,100 new employees. In the new year that curve has flattened ever so slightly, but on the whole Instacart seems happy to swell and swell even with an IPO on the horizon and has little problem recruiting. Last year, Instacart was ranked as one of the best large companies to work by Fortune magazine and several other publications – that is, if you aren’t one of those gig workers getting laid off or making less than minimum wage thanks to Prop 22.

That growth is driven by an unprecedented increase in demand for the company’s services. Google Play Store ratings for Instacart have increased a whopping 245% since the beginning of last year, now resting at 120,000 total ratings. As lockdowns began across the U.S., the grocery store went from part of a standard routine to a potential threat. Customers quickly latched on to grocery delivery as an alternative. 

Though Instacart rarely divulges user metrics, the company released a blog post in April 2020 announcing the app had grown to 350,000 users, a 150,000 increase from April 2019 — and that was less than a month into shutdowns.

For a company that’s quickly developed a reputation alongside Uber and Lyft as a ruthless gig economy employer and has been plagued by a number of notable labor scandals, Instacart is doing more than “just fine” ahead of its IPO. Users clearly aren’t deterred by any bad press. Yesterday, dozens of users flooded the app’s App Store reviews page with one star ratings, criticizing the company for “union busting” and firing its unionized employees.

But that effort has hardly made a scratch in the company’s 4.8/5 star rating, backed by 2 million reviews. The mobs online who disagree with Instacart’s treatment of its workers either aren’t causing enough of a disturbance — or perhaps more likely, aren’t reflective of Instacart’s actual user base to begin with. Customers want convenience at any cost. And Instacart will give it to them for a long time.

About the Data:

Thinknum tracks companies using the information they post online, jobs, social and web traffic, product sales, and app ratings, and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.

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