Dive Brief:
- Instacart’s vice president of operations, Mike Swartz, has resigned after just over a year with the company, according to Progressive Grocer. The publication did not know reasons for his departure.
- Prior to being hired at Instacart in February 2016, Swartz worked in operations with Amazon and with Folica Inc., a cosmetics and beauty retailer.
- Swartz’s departure follows a series of distractions for the company, the most recent being last week’s $4.6 million settlement of a class action lawsuit brought by workers who claimed 18 violations by the company, including “improper tip pooling and failure to reimburse workers for business expenses.”
Dive Insight:
It hasn’t all been bad news for Instacart lately. Last month, the e-commerce provider secured $400 million in financing after receiving a valuation of $3.4 billion. Since January 2016, the company has nearly doubled the number of markets in which it operates — from 18 to 35 — and has added Publix, Ahold Delhaize and Schnucks to its network of retailers.
Still, distractions continue to plague Instacart at a time when it can ill afford them. The class action lawsuit settlement capped months of poor relations between the company and its workers. Pay cuts, a confusing tipping tool, reimbursement of business expenses and job classification are just a few of the issues that workers took issue with, and that ultimately spurred them to take legal action.
The departure of Mike Swartz may not be a similarly self-inflicted wound, but it nevertheless comes as an unwelcome development. Instacart has a very intricate business model that relies on pleasing retailers and shoppers as it takes away margins from an already margin-starved industry. The operations side of the business needs to keep Instacart’s technology, logistics, workers and retail relations all working in harmony with one another. Even a small hiccup can dramatically impact the business.
At the same time, Instacart has announced a slew of promotions in marketing, retail relations and corporate finance, and will no doubt fill Swartz’s position soon. Speed is imperative as more and more grocers add e-commerce capabilities, and as direct competitors like Shipt and Postmates continue to add accounts.
