New York City commission vows to enforce delivery workers’ rights
DoorDash will pay $65 a share for Instacart, a 26% premium over the grocery delivery firm’s closing price on 22 October — the price before news of the potential merger first emerged. The $17bn (£12.8bn) deal will be at least 75% cash, DoorDash said, and is expected to be done by the end of 2027 or in the first six months of 2028.
DoorDash will acquire grocery delivery firm Instacart. DoorDash said the deal, expected to be final in about a year, will expand options for customers and let more sellers use the companies’ services. The deal will bring more meals, quick-need purchases, and big weekly shops directly to customers.
Instacart shoppers will be able to buy from 150,000 stores, up from the current 100,000, while DoorDash will reach beyond restaurants into retail, the firms said. DoorDash plans to keep Instacart’s brand, app, and technology products, and the delivery services will keep operating as independent companies until the deal is concluded.
The deal is DoorDash’s biggest acquisition to date and could help it take on delivery giants such as Amazon. Morningstar analyst Martin Szumski told Reuters that the growth area in food delivery was shifting. “Restaurant delivery is maturing, and growth now lies in more frequent, higher-value orders: weekly grocery shops, convenience items, and retail,” he said.
Reuters reported that the merger may raise antitrust issues with government regulators. New York City’s commission on consumer and worker protections, which last month reached a $131.5m settlement with DoorDash over allegations of underpaying workers, said in a statement: “This proposed merger continues a troubling trend of mega-corporations consolidating.” “Whether or not this merger proceeds, we will fully enforce delivery workers’ rights,” it added.
DoorDash co-founder and chief executive Tony Xu said the acquisition will let DoorDash use Instacart’s grocery selection and substitution expertise. “Grocery is one of the hardest things to get right online. Someone has to pick a ripe avocado, find a substitute you’d choose yourself, and get the ice cream to you before it melts,” Xu said. He added that “Instacart has spent years learning to do that well for grocers, while DoorDash has built a delivery network and technology that local stores rely on every day.”
Instacart chief executive Chris Rogers said: “Together, we can accelerate innovation across the grocery industry and make online grocery more seamless and affordable for the millions of households we serve.” Rogers added: “Over the last 14 years, Instacart has transformed online grocery by helping retailers of all sizes compete and grow, and joining forces with DoorDash allows us to do even more.”