What DoorDash and Instacart members get if the companies merge

If DoorDash buys Instacart in a $17 billion transaction, the company said its customers and the community it serves will benefit.

As a paid member of both, I’m cautiously optimistic that the two companies largely meet different needs. In fact, I often forget to use them because my paid Uber Eats membership offers both food and grocery delivery.

It’s not uncommon for me to use the service to order dinner and then realize I need liquor from Total Wine, along with paper plates, Gatorade, and iced coffee from Target. Once you’re in an app that offers multiple services, it’s easier to solve multiple problems at once.

A combined DoorDash and Instacart could become a more viable Uber Eats competitor, and the company said the merged business will also be cheaper for consumers in one significant way.

DoorDash will combine its subscription programs

DoorDash CEO Tony Xu praised Instacart during DoorDash’s third-quarter earnings call.

“I think Instacart has built a great brand, and it’s a very unique brand where their audience is very, very loyal to that brand. And so we certainly will support it,” he said.

He also promised that the merger would financially benefit members.

“We certainly will bring value to consumers. For instance, for the same price that you pay for DashPass today, you’ll get access to two subscription programs, the Instacart membership program as well as the DoorDash membership program,” he said.

Xu acknowledged that he had to speak carefully because the deal was still pending approval, but promised more for members.

“And we have some other ideas, too. But a lot of the value in this partnership is really going to come in all things that I see as almost not visible to the consumer,” he added.

But, not all the value will be under the hood, Xu said.

“They’ll see the benefits in the form of faster delivery, lower prices, greater selection, higher quality, and accuracy of orders. Grocers will see the value in terms of extra sales. Shoppers will see the value in terms of greater earning opportunities. And communities will see the value in greater GDP,” he said.

Subscription is key for DoorDash

All three services charge the same $9.99 a month. The only gap is on annual billing, where Instacart+ runs $3 more.

Xu acknowledged that being a larger company will allow for greater investment.

“And that’s been very difficult when you’re a smaller player to invest in on your own. That’s what this combination is really about, where DoorDash and Instacart can give every retailer a fighting chance of competing in the modern-day era,” he said.

Subscriptions, he noted, have been very important for DoorDash.

“Overall, paid subscribers continue to set all-time records. The combination of the work that we’ve done in improving the product while continuing to drive subscription is what you’re seeing in terms of the growth that you’re seeing in the business. And again, the growth is coming from sustainable levers, which is user growth, subscription growth,” he said.

What DoorDash, Uber Eats, and Instacart subscribers get

RTM Nexus CEO Dominick Miserandino has mixed feelings on the merger.

“I’m not exactly sure it will be a benefit, as choice and competition usually result in lower prices. On top of it, both DoorDash and Instacart have been getting hit with concerns on the extra fees,” he told TheStreet.

“Maybe, however, their merger will cause Uber Eats to also take a step in a positive direction to deal with the competition,” he added.

If the two delivery giants combine, DoorDash expects it to give Instacart customers access to more than 50,000 additional stores, on top of the nearly 100,000 already available through Instacart.

It will also eliminate the need to have two subscriptions.

Uber One ($9.99/mo. or $96/yr.)

• Delivery: $0 delivery fee on eligible food, groceries, and more.
• Order minimums: $15 at restaurants and non-grocery stores; $35 at grocery stores, where the discount tops out at 5%.
• Discounts: Up to 10% off eligible delivery and pickup orders.
• Rides: 6% back in Uber Cash plus top-rated drivers on eligible trips.
• Surge: Automatic discounts when riding during busy times.
• Support: Priority customer support
  • Source: Uber

DashPass ($9.99/mo. or $96/yr.)

• Delivery: $0 delivery fees and lower service fees on eligible restaurant, grocery, convenience, and alcohol orders.
• Pickup: 5% back in DoorDash credits, with no service fees, on eligible pickup orders.
• Exclusives: Members-only discounts and items year-round.
• Caviar: Benefits work on both Caviar and DoorDash.
• Guarantee: If annual-plan savings come in under $96, DoorDash makes up the gap in promo codes.
  • Source: DoorDash

Instacart+ ($9.99/mo. or $99/yr.)

• Delivery: $0 delivery fees on orders of $35 or more, versus typically $3.99 or more for nonmembers.
• Pickup: 5% credit back on eligible pickup orders.
• Streaming: Peacock, which Instacart values at $59.99 a year.
• Family: Two customers can share one membership.
• NYT Cooking: A free year of New York Times Cooking, annual members only.
• Restaurants: The $0 delivery fee now extends to eligible restaurant orders.
  • Source: Instacart

Rob Lalka, professor of business at Tulane University’s Freeman School of Business, said customers should pay attention to charges beyond the subscription price.

“What the average customer should look for now isn’t just price increases but other ways costs appear, in ways that aren’t always obvious: markups on popular items, higher service-fee percentages, ad placement, or memberships you pay to stop seeing fees, just to name a few examples,” Lalka told TheStreet.

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