Urban utopians, generally hand-in-hand with the sunniest of technological optimists, used to think that cities provided a bulwark against nature. It was assumed that the city was modern enough that while storms could inconvenience people, it would take something major like an earthquake to slow down these monuments to iron and ingenuity. Needless to say – and I say this as someone who loves living in a city – that’s a load of nonsense.
We’ve seen this again and again in America this century, a time when it seems like we should be further away from nature than ever. Nature keeps shutting down our cities and when it does, we react not as tech-savvy futurists, but as people have since time immemorial: stocking up and hunkering down. Shelves in New York, Boston, and up and down the East Coast were denuded of their goods as word spread about the coming storm this week. It also showed the utility – and limitations – of the on-demand economy, as personified by San Francisco’s Instacart, which just last week had been named Forbes Magazine’s “Most Promising Company in America”.
The promise of being Most Promising
Being Forbes’ most promising company means a lot of things. It isn’t just potential; it is about how their model has been realized and how they still have the possibility of growth. Instacart has shown the way that the on-demand economy can change the way we interact with our purchases, using a very simple model: that of same-day delivery.
To some observers, including (sometimes) this one, it seems that the “instant delivery, instant everything” economy is reminiscent of the dotcom bubble of the late 90s, where companies sprung up to deliver pet food or toys or Faberge eggs. Unfortunately, the little dotcom neologism didn’t wave away the most basic economic tenants: demand, supply, and logistics. Namely, to meet all the demand, you had to have all the supplies, and if there was no demand, the supplies were a waste.
These companies failed, spectacularly, bringing a decent chunk of the economy with them. It looks like it might be different this time, and many people think that the recent $2 billion evaluation of Instacart is the sign not of a bubble economy, but of one with solid underpinnings. The reason for this is mobile technology.
How mobile tech changed logistics
One of the main reasons the dotcoms failed – even the ones without absurd premises – is that they didn’t know how to mobilize a system of rapid delivery. Drivers weren’t able to coordinate with suppliers, headquarters didn’t have the means to mobilize a national or even city-wide network of distribution, and the link between ordering and delivering had too many steps.
That’s all different now. A person in the Mission can decide they need some groceries, go to Instacart, send in an order, and instead of routing it through some vast and labyrinthian headquarters, it can go right to a shopper, usually the one closest to the store and the customer. This has sped up the process enormously and has allowed the company to respond to both fluctuating customer demands and the normal ups-and-downs of the economy. There are some questions to be had about the contractor model, but as an engine of efficiency and profit, it works great.
They are looking to expand, as well, which makes them even more promising. Obviously, you aren’t going to order up a big-screen TV or a four-burner grill and have a hipster on a bike bring it to your house that afternoon, but drug stores, clothes, and other retail could be integrated into this model. Possibly by Instacart, or possibly by a company that has yet to even be dreamed up.
Pacific innovations, Atlantic benefits
We’re not here to get into which coast is better, but looking at the weather out east, we’re pretty glad we’re based in the Bay. We’re also glad that one of San Francisco’s top companies was able to provide aid to those who have been battered by these brutal winter storms. As of this writing, it looks like New York was spared, but Boston and other parts of New England are being hit hard.
Instacart was there to help, with orders spiking in Boston and along the coast. This showed the promise: those who couldn’t get out or get to the store on time had an easy way to access someone who could. After all, if you are going to be locked in, you need supplies. Modern civilization doesn’t change the need for food and water. And sure, there were limitations. Even the most dynamic mobile tech-based companies can’t beat the snow.
But even when the delivery systems were hampered by weather and by the supplies of the stores they depend on, Instacart still shows that glowing promise that Forbes touted. This model has its flaws, but as a signpost for the new economy, it is pretty clear that they’re on to something.