Instacart Joins DoorDash Fleet in $17 Billion Grocery Merger

DoorDash will purchase Instacart for $17 billion, a deal announced Thursday that merges two of the largest online delivery services in the United States.

The transaction allows customers to order groceries and other retail items through the DoorDash network. Instacart users will gain access to more than 50,000 additional stores, adding to the nearly 100,000 locations already available on its platform.

Membership structures will also change. DashPass and Instacart+ subscribers will pay a single fee rather than two separate charges. DoorDash intends to retain the Instacart brand name and its underlying technology.

Until the deal closes, both companies will continue operating independently. The acquisition follows a trend of consolidation in the delivery sector. DoorDash acquired Deliveroo in the United Kingdom last year, while Uber currently owns Postmates and Delivery Hero.

DoorDash holds a dominant market position, controlling approximately two-thirds of food delivery volume in America as of 2024, according to Bloomberg data. However, the company's stock price has fallen by about one-third over the past year due to rising costs.

Instacart peaked in popularity during the pandemic but has faced stagnant stock performance for two years. Competition from Amazon and Walmart has pressured growth. The merger aims to cut corporate headcount and share expenses, though it is unclear if further savings can be extracted from customers who are already feeling the impact of high fuel costs and delivery surcharges.

The companies have also faced legal and public scrutiny regarding worker pay and delivery fees. Last month, DoorDash paid $131.5 million to settle with New York City regulators over unpaid tips. Chris Rogers, Instacart's CEO, stated that joining forces with DoorDash allows the combined entity to help retailers compete and grow after 14 years of service.