When two of the biggest names in delivery decide to share a single cart, the grocery aisle changes. DoorDash is offering $17 billion to buy Instacart in a deal that could consolidate the grocery delivery business in the U.S. and abroad.

What Stays the Same

Instacart, founded in 2012, specializes in grocery and convenience store delivery in the U.S. and Canada. DoorDash said the Instacart brand name and app would remain, and Instacart’s 600,000 shoppers, who are independent contractors, could continue fulfilling orders as before.

Fewer Fees, More Stores

Consumers now paying $9.99 a month for separate DashPass and Instacart+ memberships, which offer free delivery on most orders and other perks, would be able to pay one fee instead of two, DoorDash said. Instacart customers would also gain access to 50,000 additional stores on DoorDash’s platform. Grocers could choose either delivery platform.

A Fighting Chance for Local Grocers

Tony Xu, DoorDash’s co-founder and CEO, said the deal could help local grocers compete with larger players. Walmart is the largest U.S. grocer with 21% of spending, followed by Costco and Amazon at 8% each, according to Numerator.

“Over the past decade or even two decades, what you see is the largest companies are only eating more and more of the pie. Why is that? It’s because they’ve invested aggressively into capabilities like a modern technology stack, like fast delivery, like new fulfillment models,” Xu said Thursday on a call with investors. “That’s what this combination is really about, where DoorDash and Instacart can give every retailer a fighting chance at competing in the modern-day era.”

Walmart in the Rearview Mirror

The deal would also help the two companies fend off rivals like Walmart, which has been moving into restaurant delivery. This past summer Walmart partnered with Subway, its largest in-store restaurant tenant, to let customers order from 1,400 Subway locations inside the store and have the meal delivered in under 30 minutes. It has since added select Dunkin’ and Papa Johns locations and says its platform now includes 2,400 restaurant locations.

The Size Gap

DoorDash, founded in San Francisco in 2013, began with restaurant delivery and has expanded to pet food, electronics and more. Operating in 40 countries, it completed more than 3 billion orders last year using a network of 9 million independent delivery workers. That dwarfs Instacart, which fulfilled 338 million orders. DoorDash has a market value of $73 billion.

How DoorDash Won Over Grocers

DoorDash began delivering groceries in 2020 amid pandemic-era demand, and grocers were initially cautious. Kroger partnered with the company in 2022 but at first allowed only flowers, sushi and prepared meals from a limited number of stores. The partnership expanded last fall, and DoorDash now lists the full inventory of all 2,700 U.S. Kroger stores. Last month it also added delivery from Costco.

Instacart’s Slipping Share

The move has hurt Instacart. Five years ago it held 26% of spending on U.S. delivery platforms, a share that has fallen to 18%, according to Consumer Edge. DoorDash’s share rose from 44% to 59% over the same period, while Uber Eats held steady at just under 20%.

A Founder’s Perspective

Apoorva Mehta, who founded Instacart and left after its 2023 initial public offering, said Thursday that he and Xu had explored combining the companies for years.

“We kept coming back to it because the industrial logic has always been clear. Customers have 21 meals a week to figure out. Groceries and restaurant delivery each solve part of that problem. Serving customers well means bringing together the best of both,” he said. Mehta added that the combination would give shoppers more chances to earn money.

Timeline and Market Reaction

The deal is expected to be finalized by the end of 2027 or in early 2028, if approved by Instacart shareholders and government regulators. DoorDash shares rose 6% in early trading Thursday, while Instacart shares were flat.

If regulators agree, the dinner-and-groceries question for tens of millions of households may soon be answered by a single app family.