In-house lawyers at San Francisco-based Instacart Inc. have grown accustomed to navigating the legal and regulatory challenges of facilitating grocery delivery from retail partners to customers. Instacart has been making sure that app users can get their shopping done at the click of a button via personal shoppers since 2012.
But when the company opted to expand into alcohol delivery in recent years, it has faced a whole new maze of regulatory requirements. The legal team has led the charge, working with regulators and other stakeholders on the state and municipal levels to get the proper clearances for Instacart’s shoppers to deliver alcohol to customers. As of October 2017, Instacart users in more than 10 states can order booze right to their doorsteps.
Rebekah Punak, Instacart’s deputy general counsel, said that her in-house legal team of nine, with outside counsel assistance, has “divided and conquered,” going jurisdiction-by-jurisdiction to secure approval for Instacart, which does not itself have a liquor license, to perform last-mile alcohol delivery on behalf of its retail partners.
Punak said alcohol delivery initiated by third-party platforms that are neither retailers nor liquor license holders was “not something that regulators had necessarily thought about” when approached by Instacart. So her team has had to carry out close dialogues with state and municipal officials, including state alcohol bureaus—at times soliciting their opinions through formal letters.
And even when alcohol delivery is permitted in an area, there are numerous jurisdictional boundaries and technicalities that have to be considered, according to Punak. For example, in the state of Texas, she said, some areas are totally dry, with no alcohol delivery allowed, while others are “damp” and only allow some types of alcohol to be delivered.
Dealing with the many geographical nuances involved in liquor law has required creative and home-brewed solutions.
Punak said that her team “has really built some industry unique tools to make sure [Instacart is] fully compliant with all the layers of requirements out there.”
She cited the work of Ryan Black, Instacart’s senior legal operations manager, who has built internal technology tools that the company uses to evaluate applicable jurisdictional restrictions to decide whether alcohol can be delivered to Instacart users in a given area.
Punak said that her team has had to figure out the regulatory approval process for alcohol pretty quickly, and they have their sights set on moving this aspect of their services into new areas.
“In an ideal world we’d be able to deliver alcohol for our partners everywhere, so every state we’re not currently in we would like to be in,” she said.