
Instacart stops selling alcohol for compliance reasons - MediaSquirrel
http://pandodaily.com/2012/12/11/instacart-stops-selling-alcohol-for-compliance-reasons/
======
pg
Incidentally, of all the startups we've funded, Instacart is one of the ones
we ourselves use most. Jessica can't stop talking about how great it is. You
learn how useful grocery delivery when you have small children like we do, and
Instacart is by far the best option for this.

Instacart is one of those rare products that's _surprisingly_ great. I.e. you
don't realize how good such a thing could be till you try it. A lot of the
best startups have this quality. I wish we could figure out a way to identify
them when they apply to YC, but at the moment I admit we can't.

~~~
jl
I just got a delivery 30 minutes ago, in fact. For years, I'd used
Safeway.com's delivery services and now that I have used Instacart, I'll never
go back. The UX is 100x better, delivery is much quicker (and cheaper), and I
can order on my phone.

~~~
someperson
> You learn how useful grocery delivery when you have small children like we
> do, and Instacart is by far the best option for this.

Woah, I've been reading PG essays and the HN comments by you and the other YC
partners for several years but didn't realize you two have kids!!
Congratulations! I imagine they'll have incredible futures ahead of them
growing up in such an intellectually stimulating environment/family!!

Again, congratulations PG/JL! I'm sure you two will be wonderful parents! :-)

------
rumpelstiltskin
"It’s called due diligence."

And this is called talking out of one's ass. It's easy to armchair quarterback
from a cozy cubicle at Pando HQ. When you run an actual company, especially as
a solo founder, you'll realize how thin your bandwidth gets stretched. Unless
it's core, you adopt a 'cross that bridge when you get there' mentality. Which
is exactly what Apoorva did here.

Seriously, once you go down the 'due diligence' road, there are a million
things to check up on. Focus on the core to get up and running, fix things as
they break and worry about the rest later.

~~~
abbasmehdi
Couldn't agree more. When you are a startup founder you are often times
inventing a new way of doing something. Often there are no pre-written rules,
you make them up as you go along and you find yourself doing things previously
thought to be unthinkable. Most problems do have a work-around. I will not be
surprised if in 2 weeks this founder solves this trivial problem by going to
locally owned stores and working out a cash-flow arrangement (independently
owned stores will be delighted by the lead-gen).

~~~
calbear81
I would agree that it's easy to armchair quarterback but I think it's
reasonable to say that this should have been expected or at least had come up
in ANY standard analysis of potential risks when evaluating a startup that
delivered alcohol. If you've bought alcohol, you would know that there are
legal requirements to sell it. It's no different than considering other
factors that could affect a delivery service like liability if your drivers
get in a car accident or tax issues around reselling groceries, etc.

------
MediaSquirrel
Fortunately, Swig! (<http://swigme.com>) is still 100% legal and open for
business.

Swig! is an instant beer & alcohol delivery service that partners directly
with licensed brick & mortar retailers to enable online ordering and one-hour
delivery. Unlike Instacart however, we did our homework and engaged liquor
licensing attorneys to vet our model.

Disclosure: I'm the founder of Swig! When Instacart was still selling booze,
we competed with them.

~~~
citricsquid
> According to the California Department of Alcoholic Beverage Control, all
> transactions of alcoholic beverages must be made directly through the vendor
> that holds the liquor license – in this case, Safeway. An Instacart shopper
> is not allowed to simply buy alcohol off the shelves and sell it like any
> other grocery item. So, instead of a customer paying Instacart when buying
> booze, the money should go to Safeway, and then from Safeway to Instacart.

How do you comply with this?

~~~
shardling
That quote itself seems to spell out the only way they really could -- the
money goes directly to the brick+mortar partner, and then to Swig.

------
thejteam
I know nothing about Instacart, but are they selling the items themselves or
are they just a delivery service? Although I imagine an alcohol delivery
service has its own problems, specifically with regards to age verification.
This shouldn't surprise anybody, alcohol law is complicated. They should feel
lucky they have not been hit with heavy fines over this. Everybody in
California should feel lucky they can buy alcohol at a Safeway, over here in
Maryland chain grocery stores(in fact all non-franchise chains) are not
allowed to have liquor licenses.

~~~
martey
_I know nothing about Instacart, but are they selling the items themselves or
are they just a delivery service?_

From the article:

"Instacart employees pick up the groceries from a local Safeway and bring them
to a user’s door. But that’s where compliance becomes an issue. According to
the California Department of Alcoholic Beverage Control, all transactions of
alcoholic beverages must be made directly through the vendor that holds the
liquor license – in this case, Safeway. An Instacart shopper is not allowed to
simply buy alcohol off the shelves and sell it like any other grocery item.
So, instead of a customer paying Instacart when buying booze, the money should
go to Safeway, and then from Safeway to Instacart."

------
rdl
Anyone doing any business with alcohol really should check the laws first. I
don't think this will seriously hurt InstaCart (I'd personally use them for
food or cleaning supplies; I have too much alcohol already), but if you had an
alcohol-centric business, this could be a big deal once you get traction.

One of the big things is in many states you can never discount alcohol or give
away free alcohol. You can do stuff like free food, but even making it
conditional on alcohol purchases is bad in some states (but not others).

------
patrickryan
I saw this coming, especially with their "Send beer to your friend in San
Francisco" promo a few weeks ago. There are just too many regulations on
alcohol.

~~~
rachelmaesmith
Oh yeah, my free beer! I'm assuming the promo is no longer? Regardless of this
change, I'll still use Instacart. It's a great service with quality customer
service that's only getting better.

------
westicle
Now this thread has been pg-jacked, I can't help but feel that the submitter's
unashamed plug for swig! has severely backfired.

No doubt when instacart sorts out the regulatory hurdles involved in alcohol
sales they'll have a bunch more subscribers courtesy of hn.

And so it goes.

------
46Bit
A million Stanford undergrads cried out in fear.

~~~
natrius
My freshman year, Safeway began their online delivery service. They didn't
card for the first month or two, which got them plenty of business from our
dorm. Good times.

