Delivery Industry: DoorDash Buys Instacart in $17 Billion Deal

DoorDash agreed to purchase Instacart for $17 billion on Thursday, a move that combines two of the largest digital marketplaces in the United States. The transaction creates a single entity that controls a vast portion of the country's on-demand delivery infrastructure.

The deal allows consumers to order groceries and items from retailers through the DoorDash app. Under the new arrangement, Instacart customers will have access to more than 50,000 additional stores, adding to the nearly 100,000 locations already available on the Instacart platform. Memberships for DashPass and Instacart+ will be consolidated into a single fee structure, eliminating the need for two separate subscriptions.

DoorDash plans to retain the Instacart brand and its underlying technology. Until the deal closes, both companies will operate independently. Chris Rogers, CEO of Instacart, stated that the partnership allows the company to help retailers of all sizes compete and grow.

The acquisition follows a pattern of consolidation in the sector. DoorDash acquired the UK-based Deliveroo last year, while Uber owns Postmates and Delivery Hero. DoorDash currently commands approximately two-thirds of all food-delivery volumes in America, according to Bloomberg data from 2024.

Despite its market share, DoorDash stock has fallen by about a third over the past year due to rising costs. Instacart stock has remained flat for two years as the company struggled with competition from Amazon and Walmart. Both firms face pressure to reduce expenses by cutting corporate staff and sharing operational costs.

The merger occurs as consumers grapple with increasing delivery fees. Rising fuel costs have led to new surcharges, sparking public debate over the price of delivered meals. Last month, DoorDash paid $131.5 million to settle with New York City regulators over claims it underpaid delivery workers. The company acknowledged in a statement that its mistakes meant some Dashers were paid late or underpaid.

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