In a plot twist, Uber Eats joins forces with Instacart to fend off delivery competition
InstaEats… Uber Eats is teaming up with rival food-delivery app Instacart, but not through an acquisition. In a surprising move, Uber Eats will make its service available on Instacart, the leading grocery-delivery app. While Instacart doesn’t list restaurants, it does directly compete with Uber on grocery and alcohol deliveries.
Eggstra: Instacart will soon add a “restaurants” tab that’ll connect users to Uber Eats drivers and the hundreds of thousands of businesses they deliver from.
More bread: Uber Eats will get more exposure from Instacart shoppers, and Instacart will get $$ from Uber for every restaurant order placed through its app.
Eye on the pie: On Wednesday, Uber and Instacart both reported solid growth in their food-delivery businesses. But competition’s comin’ in hot.
The enemy of my enemy is my friend… And Uber and Instacart have many enemies. The top one is DoorDash, America’s No. 1 restaurant-delivery app. DoorDash dominates meal orders, but it’s also been gaining market share in groceries since the pandemic (though it’s still unprofitable). Then there’s major food retailers like Amazon, Walmart, and Target, who’ve ramped up their online-grocery game. Last month Amazon started offering Prime members a $10/month unlimited-grocery-delivery subscription. In March, Target announced a similar annual membership. And Walmart, America’s largest grocer, includes delivery as a Walmart+ perk.
There’s strength in delivery unity… Uber already ate up delivery market share by buying Postmates and Drizly. But its partnership with Instacart (which it doesn’t own… at least not yet) is unprecedented. It suggests that competition is so tough that the only way to beat it is to team up against it. There’s even speculation that it could lead to a merger.