Technology

Instacart to offer restaurant delivery from Uber Eats

Uber Eats will have a dedicated tab within the grocery delivery app, which it said will allow it to reach more customers.
Uber Eats courier
Uber Eats couriers will handle restaurant deliveries placed on Instacart. | Photo: Shutterstock

Users of the Instacart grocery app will soon be able to order Uber Eats while they browse for groceries.

The two delivery services are partnering to embed Uber Eats delivery into the Instacart app, allowing customers to get groceries for the week and dinner for the night all in one place.

The arrangement will give Uber Eats access to more customers, particularly suburban families who use Instacart to get groceries. And it allows Instacart to provide more convenience, as well as more value to Instacart+ members, who will get free restaurant delivery on orders over $35 as part of their subscription.

The deal is notable because the two companies compete for grocery customers. Instacart is the market leader in grocery delivery, while Uber Eats launched the service in 2020. 

Uber declined to provide financial details of the agreement.

Uber Eats Instacart

Uber Eats will have a home in the Instacart app. | Image courtesy of Uber Eats

In the next few weeks, Instacart customers will start seeing a “Restaurants” tab in their app, where they’ll be able to browse and order delivery from nearby restaurants. Those deliveries will be handled by Uber Eats’ technology and driver network. Instacart’s couriers, known as shoppers, will continue to field grocery orders.

"Through this partnership, Instacart customers now have access to both the best online grocery selection in the U.S. and restaurant delivery, making it even easier for them to conveniently tackle all their food needs from a single app," said Fidji Simo, CEO and chair of Instacart, in a statement. 

Instacart saw massive growth during the pandemic, but that growth has slowed more recently. Last year, gross transaction volume rose 5% and total orders rose 3%, a marked deceleration from previous years.

However, its stock has jumped more than 50% so far this year on better-than-expected revenue and profits, as well as a report that it could be a potential takeover target for Uber. The stock got a small bump Tuesday from the Uber news.

Uber Eats meanwhile has continued to see robust demand, though not at the levels it saw in the thick of the pandemic. 

In a note published Tuesday, RBC Capital Markets analyst Brad Erickson wrote that he expects the partnership to have mixed results for Uber. He predicted that it will hurt Uber's grocery business but will drive incremental restaurant orders.

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