How Does Instacart's Route Planning Software Work?

Yesterday, I ordered groceries Wal-Mart using Instacart and it was an amazing experience.  I put in my address, ordered items, and paid for the order.  In 90 minutes, groceries were delivered to my front door by a friendly delivery driver.  I was impressed and referred my closest friends immediately.
Behind the scenes, something magical was happening out of the view of the customer.  One key piece of the workflow was the route optimization algorithm.  Rather than having drivers do one delivery at a time, a driver can do one pickup at Wal-Mart and make several deliveries in the the same area.  Bundling several orders for customers ordering from the same store would reduce the cost of each delivery.  In order to do this, routes must be optimized so the driver’s time between each drop off are minimized.
I don’t work at Instacart, but we build route optimization software at Routible, so I’ll make an attempt to reverse engineer what might be going on behind the scenes.
There are batches of orders that guarantee estimated delivery times, 1 hour, 2 hour, 3 hour etc.  A cut off time for each delivery time allows multiple orders to come in for pickup at a particular store.  Once the cutoff time passes, a standard route optimization occurs where all the orders for that store loaded onto drivers one at a time.  
The orders are passed onto drivers who pick the orders and then start delivering the orders one by one.  The routing algorithm reduces the drive time from the store and between each stop.
Route optimization enables fast delivery times and bundling orders which reduces the cost to deliver items. The more optimized the route algorithm becomes by taking into consideration past data and additional variables, the service can offer faster and cheaper service.
As the demand of orders increases, routes get tighter, and drop offs are inherently closer to each other.  This would enable more deliveries to be completed in less time with less cost.
Historic data will enable the company to plan for potential surges in demand and properly plan on the supply side.
Instacart is amazing, check it out!