DoorDash Offers $17 Billion to Buy Instacart, Potentially Reshaping Grocery Delivery
By Emma Carter
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Intro
DoorDash has offered $17 billion to buy Instacart in a proposed deal that could significantly consolidate grocery delivery in the United States and abroad.
Vocabulary
| Word | Part of speech | Meaning | Example |
|---|---|---|---|
| proposed adjective | adjective | Meaning: suggested as a plan or agreement for others to consider | Example: The proposed merger could change how customers receive groceries. |
| combine verb | verb | Meaning: to join two or more things together | Example: The project will combine local knowledge with modern technology. |
| rivals noun | noun | Meaning: companies or people competing against one another | Example: The two rivals are trying to attract the same customers. |
| practical adjective | adjective | Meaning: useful and connected with real situations or needs | Example: The new app offers practical tools for managing household expenses. |
| eventually adverb | adverb | Meaning: at some time in the future, after a period of time | Example: The temporary solution eventually became a permanent policy. |
| consolidation noun | noun | Meaning: the process of combining separate companies or groups into fewer larger ones | Example: Industry consolidation can increase efficiency but reduce consumer choice. |
| finalized verb | verb | Meaning: completed or formally agreed upon | Example: The contract was finalized after both sides accepted the conditions. |
The story
DoorDash has offered $17 billion to buy Instacart in a proposed deal that could reshape grocery delivery in the United States and abroad. The companies say the agreement would combine DoorDash’s global reach and logistics experience with Instacart’s grocery technology and long-standing relationships with retailers.
Instacart, founded in 2012, specializes in grocery and convenience-store delivery in the United States and Canada. DoorDash began as a restaurant delivery company in 2013 but has expanded into areas including pet food and electronics. The companies say their combined services could help them compete more effectively with rivals such as Amazon and Walmart.
For customers, DoorDash says the proposal could offer several practical benefits. Instacart users would gain access to 50,000 additional stores on DoorDash’s platform. People who currently pay separately for DashPass and Instacart+ could eventually pay one membership fee instead of two. DoorDash also says the Instacart name and app would remain, while the company’s roughly 600,000 independent-contractor shoppers could continue fulfilling orders as before.
The proposal has also raised concerns about competition. If fewer major delivery companies compete for customers, prices could rise. Grocers might also have fewer platforms to choose from and less power to negotiate service terms. Randall Sargent, a grocery and retail consultant at Oliver Wyman, said that greater consolidation generally creates risks for consumers.
Tony Xu, DoorDash’s co-founder and CEO, said the combination could help local grocers compete with larger businesses. The deal still requires approval from Instacart shareholders and government regulators. If it receives those approvals, the companies expect it to be finalized by the end of 2027 or in early 2028.
Warm-up questions
- What advantages and disadvantages might result when two delivery companies merge?
- Which factors would influence your choice between competing grocery-delivery services?
Comprehension questions
- What experience and resources would the proposed agreement bring together?
- Which new access could Instacart users receive through DoorDash’s platform?
- Why might customers eventually pay only one membership fee?
- What concerns could arise if fewer major delivery companies compete?
- What approvals are necessary before the agreement can be completed?
Opinion questions
- Would one membership fee be a convincing reason for you to support this proposal? Why or why not?
- Do the possible customer benefits outweigh the risks of reduced competition? Explain your position.
Further discussion
- How might grocery retailers respond if they had fewer delivery platforms to choose from?
- What responsibilities should regulators have when large technology companies combine?
Writing prompt
- Write a balanced paragraph evaluating the proposed acquisition, including customer benefits, competition concerns, and required approvals.
