Unlike Webvan, they rely on contract workers. No need to operate a large fleet of delivery vehicles/drivers, or sink money in warehouse operations. Internet penetration has doubled (~45% then vs almost 90% of US population now). Of course, smartphones everywhere are a big enabler as well.

> Unlike Webvan, they rely on contract workers. No need to operate a large fleet of delivery vehicles/drivers...

They currently rely on contract workers but there is a legitimate question as to whether many of the on-demand companies have misclassified their workers[1]. Uber and Handy have already been sued over classification, and class action attorneys have publicly named other on-demand startups that they're investigating for similar actions.

As one attorney has observed, the startups that have made 1099 contractors the foundation of their businesses "are potentially exposed to a bet-your-company liability if they have not structured, documented, and implemented their freelance relationships in a manner that enhances their compliance with federal and state independent contractor laws"[2].

[1] http://nymag.com/daily/intelligencer/2014/09/silicon-valleys...

[2] http://independentcontractorcompliance.com/2014/12/02/novemb...

Funny enough, I have seen several people say that this makes Instacart worse than Webvan, because "at least Webvan had assets." I'm pretty sure that's a nonsensical argument, since those assets were just from them dumping millions of their investment dollars into infrastructure.

Is the difference technological or cultural? In other words, what different technology do we have now that would have enabled Webvan to succeed? To me it seems that the most marked difference is the consumer culture and comfort with online buying.

Let's not forget the most simple and obvious answer: browsing the internet was slow back in the day. When I was living in NYC during the Kozmo/Urbanfetch era it would be 20-30 seconds or so to load a product page, then you'd have to add something to the cart, which took awhile, and so on. Images were crappy and small, pages took forever to load, websites just in general didn't work all that well, core principles of UI/UX we take for granted now hadn't really been settled yet. And I had DSL, most at the time had dial-up.

Ordering things online back then was really annoying, and the grocery type order, with lots of little things that are kind of hard to browse and sort (a problem Instacart still struggles with today to be honest) made it especially annoying for this kind of service. And I was a tech minded person who wanted it to work and wanted to use it.

Online browsing and buying was really tedious, it's easy to forget just how much so.

Honestly I feel like this issue is a combination of technology and culture. As our technology has advanced, our perception as a culture has changed because now instant-gratification has become a reality. Not only that but as we move to mobile devices we continue to seek immediate results and companies that previously failed are now succeeding even though they are commodities of one-another. Not to mention your point that consumers are finally becoming more comfortable with doing everything online, compared to previous times.

It wasn't the technology so much as the customers/marketplace.

Back in 1999/2000, the market to buy groceries over the Internet wasn't there. Paying for shipping was still a sore point, and Amazon Prime wasn't around yet. People just didn't associate buying groceries with the Internet, so there was a considerable amount of friction they had to overcome, and not a lot of time considering the burden of all the infrastructure they had. Once the bust hit, it was over for them because they didn't make enough revenues to pay their obligations and no more VC money to give them some breathing room.

These days, buying things like groceries is an afterthought, especially post-smartphone where you have a computer everywhere you go, so you can monitor the progress of deliveries, without having to sit by your desktop.

Faster internet makes building a grocery-sized cart online a lot easier today than it was 15 years ago. Add to this that the majority of cellphones in 2000 were mere phone/SMS devices, making it hard for shoppers to even get the lists they need to buy. Without GPS tracking on shoppers, it'd be much harder to estimate when the delivery would arrive. On top of all the actual technical benefits, everything has gotten easier/smoother/faster overall as aesthetics and UI have improved over the past 15 years.

It's both.

Improvements in mobile tech also allow managing a mobile workforce easier. This can allow Instacart to keep in contact with drivers more easily, which in hand allows them to more easily manage and hire drivers who shop from individual stores, instead of needing the warehouse. Shorter version: Mobile communication and apps allow for distributed workforce and inventory instead of big centralized costs.

A big difference in 2014/2015 is the friction between an impulse to buy something, and actually paying for that something is lower thanks to smart mobile phones