DoorDash Buys Instacart in $17 Billion Deal

DoorDash will purchase Instacart for $17 billion, a transaction announced Thursday that unites the country's largest food delivery service with a leading online grocery platform. The acquisition allows DoorDash users to order groceries and items from other retailers through its existing delivery network. Under the new arrangement, Instacart customers gain access to more than 50,000 additional stores, adding to the nearly 100,000 locations already available on its platform.

The companies plan to merge their subscription services, meaning DashPass and Instacart+ members will pay a single membership fee instead of two. DoorDash intends to retain the Instacart brand and its underlying technology. Until the deal closes, both entities will continue operating as independent companies. Chris Rogers, CEO of Instacart, stated that joining forces with DoorDash allows the company to help retailers of all sizes compete and grow, building on Instacart's 14-year history in transforming online grocery.

The transaction marks the latest phase of consolidation in the delivery sector. DoorDash previously acquired UK-based Deliveroo last year. Uber currently owns Postmates and Delivery Hero. According to Bloomberg data, DoorDash held approximately two-thirds of all food delivery volumes in the United States as of 2024. However, the company's share price has fallen by roughly a third over the past year, a decline attributed largely to rising operational costs.

Instacart experienced peak growth during the Covid-19 pandemic when lockdowns drove millions of consumers to order groceries via smartphone. Since then, the company's stock has remained flat for two years. Management faced challenges in identifying new growth avenues while competing against grocery delivery offerings from Amazon and Walmart. The merger aims to generate cost savings by reducing the combined corporate workforce and splitting certain expenses, though analysts note that further price increases for delivery customers may face resistance.

Consumer sentiment toward delivery fees has shifted this year amid soaring fuel costs that triggered new surcharges. A recent viral debate on social media focused on whether a $20 delivery fee for a burrito was reasonable. Both platforms have also faced legal scrutiny regarding worker compensation. Last month, DoorDash settled with New York City regulators for $131.5 million to resolve charges that it deprived workers of millions of dollars in tips. The San Francisco-based company admitted in a statement that its mistakes meant some Dashers were underpaid or paid late, noting that while the errors were not intentional, they were not acceptable.

The proposed transaction was first reported by The Information and The Wall Street Journal.