Last week, this was just a rumour. Now it's a done deal, at least on paper. On Thursday, DoorDash announced it will buy Instacart for $17 billion, paying $65 for every Instacart share. Both companies' boards have already signed off.
The idea is pretty simple. DoorDash rules restaurant takeout, and Instacart is the big name in grocery delivery. Put them together, and you get one company that can bring you dinner from a restaurant and your weekly groceries too. DoorDash also says grocers can use Instacart's technology to build their own online stores and advertising businesses and lean on DoorDash's drivers to handle more orders at a lower delivery cost.
The good news for Instacart fans is that the brand and the app aren't going away. DoorDash says it plans to keep both, along with Instacart's enterprise tech products. Until the deal closes, the two will keep operating as separate, independent companies.
Tony Xu, DoorDash's CEO, said grocery is one of the hardest things to get right online and called it "still early innings". Instacart CEO Chris Rogers said that over 14 years the company has changed online grocery shopping and that joining DoorDash will let it do even more.
Don't expect changes anytime soon, though. The companies say the deal should close toward the end of 2027 or in the first half of 2028. That long timeline hints at how much attention regulators will probably give it, since two of the biggest delivery players in America would become one. Instacart had also talked with Uber, according to Bloomberg, but those talks didn't go anywhere.
For shoppers and gig workers, the real question is what happens when there's one fewer big competitor. Will fees go up, or will a bigger network make delivery cheaper?
DoorDash plus Instacart: more convenience, or less competition and higher fees?