[thisisit]

I re-read the article. It says -

> Adopting an asset-light model, Mehta first built an app that let customers shop from established retailers--charging a delivery fee and, at least initially, a slight markup. Instacart kept a cut for itself and paid the shopper.

So the implication is that they are not selling stuff at markups now.

> It's just worth noting in this case as they are effectively just a delivery service so it might be unclear.

In that case, wouldn't revenue be the "delivery service fee" instead and not the value of what was delivered?

Looking at the article their revenue streams seem to be: delivery fees, Instacart Express Membership fees, partnerships with stores and advertisement fees. In which case using GMV seems odd.

So, the original question stands.

[lenley]

Yes - In my view revenue (and probably most accountants would also say this) is the delivery fee only. If you think about it, most marketplaces have this same issue. This isn't unique to Instacart, Enron did the same thing...(our accounting prof used them as an example). It's just not useful for analysis of the company.

Edit: Most marketplaces can charge you the "full price" to keep the transaction on the platform; however, they are only paid a small portion of that transaction as revenue -- e.g. Fiverr/Upwork/etc. don't keep the full amount the service provider charges their client, only a (hopefully) small fee.

https://a16z.com/2015/08/21/16-metrics/ #6 Gross Merchandise Value (GMV) vs. Revenue "In marketplace businesses, these are frequently used interchangeably. But GMV does not equal revenue!" The rest of A16Z's explanation is worth reading.