Uber said Tuesday that it will team up with Instacart to add restaurant meals to Instacart's grocery delivery app. The announcement played as good news for Instacart stock but bad news for rival DoorDash, while Uber stock traded also closed lower.
Uber said Instacart customers will soon be able to order restaurant meals through the Instacart app, powered by Uber Eats. Through a new "restaurants" tab on the app, Instacart customers will be able to order meals from "hundreds of thousands of restaurants," which will be fulfilled by Uber Eats and its couriers. Instacart+ members can get free delivery on grocery and restaurant orders over $35, according to the announcement.
"We're excited that this new strategic partnership with Instacart will bring the magic of Uber Eats to even more consumers, drive more business for restaurants, and create more earnings opportunities for couriers," Uber Chief Executive Dara Khosrowshahi said in a news release.
On the stock market today, Uber stock lost 1.5% to close at 70.43. Instacart stock added 2.7% to close at 37.52. And DoorDash stock lost 1.7% to close at 115.56.
Uber Stock: Competing With DoorDash On Delivery
DoorDash competes with both Instacart and Uber. While best known for food delivery, the DoorDash app also features grocery options and delivery from general retailers. The app commonly prompts users with the option to "DoubleDash" by adding items from a nearly convenience store to a food order.
Uber also competes with Instacart on grocery delivery. In an interview with Bloomberg, Khosrowshahi said the Instacart partnership could give Uber Eats a stronger presence in suburban markets.
DoorDash has the leading market share in food delivery, with 67% of U.S. sales in March compared to Uber's 25%, according to research firm Bloomberg Second Measure.
"You could say that we are a threat to DoorDash both independently and teaming up as well," Khosrowshahi told Bloomberg.
Instacart Chief Executive Fidji Simo said in a news release that the deal will give Instacart customers "access to both the best online grocery selection in the U.S. and restaurant delivery."
The deal comes as some analysts have suggested DoorDash should seek partnerships to compete with Uber. One analyst recently suggested a partnership with Lyft that would allow DoorDash to match Uber's ride-share capabilities and allow Lyft to match Uber's food delivery.
Uber, Instacart Earnings On Deck
Uber is scheduled to release its first quarter earnings Wednesday morning. Instacart reports earnings Wednesday after the market closes.
DoorDash stock fell following its first quarter report last week, which showed a wider-than-expected loss.
Still, DoorDash stock is ahead 16.5% so far in 2024. Uber stock has gained 16% year-to-date and Instacart shares are up 58% this year.
