Topline
Grocery delivery service Instacart, which gained popularity during the pandemic, said Tuesday it’s partnering with Uber Eats to bring restaurant delivery to millions of its customers, prompting shares of the firm to rise to their highest level in over three weeks.
Key Facts
The food delivery service will become available to Instacart customers across the nation in the coming weeks, and they will be able to choose from a selection of nearby restaurants, browse menus, place orders and track deliveries in real-time.
Instacart said Uber will power restaurant listings on its platform, accept and pick up food orders and have them delivered to its customers by Uber Eats couriers, according to the statement.
Under the new arrangement, Instacart plus members—who get free grocery deliveries on $35 orders or more for $99 per year or $9.99 per month—will also get free food deliveries on restaurant orders over $35.
Meanwhile, regular Instacart customers will be charged Uber Eats delivery fees, according to the Associated Press, but it’s unclear whether they will be cheaper.
Uber spokesperson Leah Seay said Instacart customers would get the same restaurant prices offered on Uber Eats while couriers would be paid the same as they would be for the trip on the food delivery platform.
Shares of Instacart are up 1.88% at 11.25 AM in Tuesday’s trading session to $37.24, the highest level the stock traded since April 12, 2024.
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Key Background
Instacart’s partnership with Uber Eats adds to other recent investments the grocery delivery firm has made, such as developing a ChatGPT-powered search feature that answers customer enquiries and gives personalized recommendations. The move comes amid rising competition in grocery delivery services among leading players in the United States. Instacart’s entrance into the food delivery business could help the company gain more market share and stay competitive, as market rivals continue to expand their services into new categories, including DoorDash’s partnership with consumer electronics company Best Buy last year.
Critical Quote
Uber Chief Executive Dara Khosrowshahi said the partnership intends to make it easy “for people to go anywhere and get anything”, according to the statement, adding it would provide Uber Eats services to more customers, “drive more business” for restaurants and “give more earning opportunities” for couriers.
What We Don’t Know
The financial details of the partnership. Neither firm disclosed the value of the deal.
What To Watch Out For
How the partnership will drive sales from both companies—and whether it will boost Instacart’s market share in the grocery delivery business, which currently stands at 25%, behind Walmart’s 51%, according to the Associated Press.
