Order with Google For Food Delivery Going Away End Of June

Google looks like it will discontinue the direct ordering option with the Order with Google button by the end of June 2024. This will impact third-party food delivery sites, such as DoorDash, GrubHub and Uber Eats.

UPDATE: I was wrong, the order button is not going away – what is going away is the merchant experience within the GBP that is getting depreciated. All orders get directed to 3rd party links. Claudia Tomina corrected me privately about this and shared this screenshot of what is going away:


Claudia Tomina received this notification from GrubHub and posted about it on X saying, “Google is discontinuing GFO in June 2024. The option to order from third parties via Google Business Profile “order now” button will no longer exist. Instead they will be directed to the provider’s site.”

The email reads:

No more direct ordering with the Order with Google button.

These third-party sites include DoorDash, GrubHub, and Uber Eats. While this button made the process extremely convenient for hungry customers to order with just a few taps, Google will be unraveling this integration by the end of June 2024.

So expect them to go away in June 2024.


Dining out is increasingly a domain of the wealthy. Restaurants are feeling it.

What’s for dinner? For an increasing number of Americans, especially households making less than $150,000 a year, the answer doesn’t involve going to a restaurant. And when people do go out to eat, they are spending less money. 

Battered by higher-than-normal food prices, some consumers are pulling back on their spending — and restaurants are feeling the effects.

Dine Brands Global Inc. DIN, -0.56%, the owner of the pancake chain IHOP and restaurant chain Applebee’s, said in its earnings call Wednesday that fewer consumers earning $50,000 a year and below visited its restaurants in the past quarter. Even when they do, they are “more aggressively” managing the amount they spend, Dine Brands CEO John Peyton told investors. 

Although some higher-income guests have traded down to eat at the company’s cheaper restaurants, behavioral changes are most pronounced among lower-income consumers, he said. “[T]he most impactful change in consumer behavior is clearly the $50,000 and below segment,” Peyton said on the call. Dine Brands Global did not immediately respond to MarketWatch’s request for comment. 

While lower-income Americans are dining out less — even at fast-food restaurants — higher-income Americans are dining out more. 

Also read: Financial experts told consumers to stop ‘wasting’ money eating out. They’re finally listening — and companies are rattled.

Darden Restaurants DRI, 1.67%, the owner of Olive Garden and the Capital Grille, said on a March earnings call that visits from diners earning more than $150,000 a year were higher during its last quarter than they were at the same time the previous year, while visits from diners with an annual income below $75,000 declined “at every brand,” said Ricardo Cardenas, president and chief executive officer of Darden Restaurants. The shift was most pronounced in Darden’s fine-dining segment, he said.

In fact, nationally, only diners from households earning over $200,000 a year spent money in restaurants more often in 2023 than they did in 2019, according to Circana data. Diners from families earning below $45,000 with kids pulled back on their restaurant spending the most, Circana found. 

To be sure, people are still dining out, but the accumulated financial pressures from the past four years are hitting them, said David Portalatin, food industry analyst and senior vice president at Circana. 

“In 2024, inflation is the dominant narrative,” he told MarketWatch. That’s part of the reason lower-income families with kids are trimming their spending the most. When you need to feed a family of four, “there’s a little sticker shock at the end of the meal,” Portalatin said. 

There are two main types of consumers spending at restaurants at the moment, he said. One is looking for an experience for special occasions, where they can share food and enjoy a good time with friends and family. The other is looking for convenience at a lower price point, he said. 

Diners are ordering fewer and smaller meals

Menu prices are rising faster than grocery prices. Prices for “food away from home,” or restaurant food, were up 4.2% in March from the same month a year earlier, according to the most recent data from the Bureau of Labor Statistics. Grocery inflation, in comparison, was 1.2% in March year over year.

Because dining out is a splurge for many consumers, it’s often the first thing to go when people want to trim their budgets. Although inflation has eased, 42% of Americans surveyed by the Bank of America BAC, 0.85% Institute in November said they planned to pull back their spending on dining out and takeout in 2024. Dining out is getting more expensiveThe average cost for a meal out per person in 2019 vs. 2023Source: Circana20232019fine diningfast food$0$5$10$15$20$25$30$35$40$45$50$55

The average cost of a meal out at a fine-dining restaurant was $47.73 per person in 2023, up from $41.18 in 2019, according to Circana. At the Capital Grille, that’s roughly enough to cover one entree plus a 20% tip, according to the restaurant’s online menu.

But even eating at fast-food restaurants is becoming more expensive. The average price of a meal at a fast-food restaurant increased from $5.93 in 2019 to $7.63 in 2023. Eating at a casual restaurant cost $16.53 per person on average in 2023, up from $13.73 in 2019. 

Darden Restaurants diners have been ordering fewer items in addition to their main entree compared with the same time a year ago, including fewer alcoholic drinks, the company said in its second-quarter earnings call. That’s true for takeout, too: Papa John’s PZZA, +0.80% said Thursday that while people bought more pizza in the past quarter, they did not buy sides and beverages as much. Papa John’s and Darden declined to comment further. 

Diners are cutting back in other ways, too. On its most recent quarterly earnings call, Darden said diners older than 65 were increasingly shifting to going out for lunch, which usually costs less, instead of dinner. 

Restaurant workers’ wages are rising, but diners are having a hard time swallowing that change 

Rising labor costs are one of the factors behind increasing menu prices, said Circana’s Portalatin. 

In addition to the ongoing effects of labor shortages in the past few years, new minimum wage laws, including California’s law setting a $20-an-hour minimum wage for fast-food workers, will further raise costs for restaurants, he said. Those cost increases could be passed on to diners, he added. 

Read: Yes, that Big Mac meal may cost $18 — but there’s one good reason for it

The wage increases for restaurant workers come as wage growth for the country’s lowest-paid workers has outpaced wage increases for other groups over the past four years. Advocates have celebrated these gains as a win for low-wage workers — who, in some states, still make the $7.25-an-hour federal minimum wage. 

It’s a good thing that restaurant workers are earning more, but some diners, especially lower-income ones, are having a hard time adjusting to the increased prices that come with higher wages, said Allison Schrager, a columnist and an economist at the conservative-leaning nonprofit think tank Manhattan Institute. 

“One thing that was great about cheap services is that even lower-income people got to enjoy them,” Schrager said. “They got to go to restaurants too.”


A “Restaurant Apocalypse” Is Starting To Sweep Across America, And That Is Really Bad News For The U.S. Economy

You can get a really good idea how the U.S. economy is doing by watching restaurants in your area.  When the economy is booming, restaurant parking lots are full and chains are feverishly establishing new locations.  But when the economy is struggling, restaurants get a lot less traffic and poor performing locations get shut down.  Sadly, in 2024 it appears that a “restaurant apocalypse” has started to sweep across America.  Most people have very little discretionary income to spend as a result of our cost of living crisis, and that is particularly true for our young adults.  Americans under the age of 40 love to eat out, but these days most of them are experiencing financial stress, and this is having an enormous impact on the restaurant industry.Subscribe

In 2023, visits to sit-down restaurants dropped by about five percent compared to 2022…

Americans are eating out less as inflation weakens the dollars in their pocket, which is leading to some harsh consequences for restaurants across the country.

Visits to sit-down restaurants were down nearly five percent in 2023 from the year prior, according to location analytics firm Placer.ai.

So this is a trend that has stretched on for over a year.

People just aren’t eating out as much as they once did.

As a result, we are seeing a wave of closures all over the country.  Even in the Big Apple, large numbers of restaurants are being shut down

Even big metropolitan areas in the US known for their great dining spots are struggling to maintain an environment where it’s profitable to run a restaurant.

Eater NY reported that over 40 bars and restaurants closed in  New York City from December 2023 to January 2024, with some of the owners saying business simply never picked up after the COVID lockdowns in 2020.

When times get tough, difficult decisions need to be made.

After closing 46 restaurants last year, Applebee’s has decided to close another 35 locations this year

Applebee’s is to close another 35 further locations this year, after shutting 46 in 2023.

The restaurant chain has shut at least three locations so far this year and has plans to close even more, president Tony Moralejo said in an earnings call on Wednesday.

Closing restaurants was ‘an incredibly difficult decision’ and a ‘last resort’ for the company, Moralejo said.

And I am very saddened by what has happened to Boston Market.

At one time they had almost 1,000 locations all over the United States, but now the entire chain is about to go belly up

In the case of Boston Market, a chain that once had nearly 1,000 locations nationwide, the company’s death has been slow, but the pace of its demise has picked up over the past few months.

Now, with its store count continuing to dip, the chain seems to have reached the end even if it won’t confirm that given that there no longer appears to be anyone around to make that decision.

Boston Market owner Jignesh “Jay” Pandya was recently denied Chapter 11 bankruptcy for the second time and has been barred from filing again for six months. That leaves his company, which faces massive financial obligations, unable to gain court protection from its creditors.

Our ongoing inflation crisis is the primary reason why this is happening.

Consumers simply have a lot less discretionary income now.Subscribe

Meanwhile, restaurants are facing much higher costs

Jessica Dunker, the president and CEO of the Iowa Restaurant Association, said the reason restaurants are shuttering is because the cost of goods is up 30 percent and they are having to shell out higher wages to keep staff on.

Unfortunately, things aren’t going to get any better any time soon.

For example, the cost of orange juice is expected to go up dramatically because of a very bad harvest in Brazil

Breakfast lovers are in for another jolt as orange juice prices surge to near-record levels. A new report released on Friday indicates that Brazil, the leading global exporter of OJ, is facing its worst harvest in over three decades. This alarming development compounds existing issues in Florida’s citrus groves, which have been plagued by disease and are experiencing collapsing production levels to the lowest in decades.

Fundecitrus wrote in a note that Brazil will produce 232.4 million boxes—each weighing about 90 pounds—for the growing season this year. That’s a 24% collapse from a year earlier and the lowest production levels in 36 years.

We have reached a point where the vast majority of Americans just can’t afford to eat out on a regular basis.

Needless to say, that is really bad news for fast food chains like McDonald’s.

At one time, serving middle class families was their core business.

But now most middle class families just can’t afford to eat at McDonald’s very often.

In a desperate attempt to lure them back, McDonald’s will soon introduce a five dollar meal deal

McDonald’s is looking to launch a $5 meal in the US in a move to bring back price-sensitive customers.

The meal includes four items, people familiar with the matter told Bloomberg and Restaurant Business. Customers would choose between two of the chain’s signature burgers — a McChicken or a McDouble — and get four-piece McNuggets, fries, and a drink. The $5 promotion would last for a month, Bloomberg reported.

So they are going to bring back affordable food for one month.

That’s just great.

Unless they make the five dollar meal deal permanent, I don’t expect that it will make much of a difference.

Consumers are really hurting right now.  In fact, consumer sentiment just fell to the lowest level in six months

Consumer sentiment plunged to the lowest level in six months as price increases reaccelerated, according to the latest University of Michigan survey of consumers, released Friday.

Additionally, consumers are bracing for even higher price increases in the year ahead compared to readings from prior months, the survey found.

The gauge, which is closely tracked by the Biden administration, plunged 13% from April’s 77.2% reading, to 67.4%. That’s the biggest one-month drop since mid-2021. Economists polled by FactSet were expecting consumer expectations to fall to just 76.9%.

As I have discussed previously, the American people are deeply pessimistic about the economy at this stage.

And they have good reason to be pessimistic, because even though our politicians in Washington are engaging in an unprecedented spending spree in a desperate attempt to keep the economy propped up, the truth is that the wheels are starting to come off and tremendous chaos is ahead.

Ed Dowd agrees that big trouble is coming during the months ahead.  He just told Greg Hunter that he expects the U.S. economy “to take a nosedive sometime in the next 12 months”

What happens to the Biden economy? Dowd says, “The economy is going to take a nosedive sometime in the next 12 months. The real economy is not doing well. . . . The only thing that has been holding up the GDP growth is government spending. We are spending $1 trillion every 100 days. That’s adding $1 trillion to the deficit. The only job creation is government jobs, and they don’t actually add to the economy. . . . Reports are coming out now that the low-income consumer is getting absolutely hammered. McDonald’s talked about it in their most recent earnings call. . . . So, low-income and the middle-class are getting squeezed while the rich continue to plug along.”

I agree.

Of course we don’t have to wait for the economy to come apart at the seams, because that is already happening.


DoorDash shifts pay scheme, cuts flexibility in New York City

Dive Brief:

  • DoorDash is introducing a worker reward program in New York City that gives highly rated and highly productive workers early access to scheduling, as well as the potential to earn weekly bonuses.
  • The change makes DoorDash delivery work more similar to a traditional, full-time job with predictable hours for those high-frequency Dashers, at the expense of flexibility for low-frequency, highly contingent workers.
  • DoorDash is also changing its compensation model starting March 4 after altering its tipping structure and hiking consumer fees in the city in response to a New York City law that requires delivery companies to pay an hourly minimum of $17.96.

Dive Insight:

DoorDash said its steeper fees in New York City led to a $3.5 million drop in sales for local DoorDash merchants and 200,000 fewer orders over the last few weeks. The company didn’t share a specific time frame for this decline, and didn’t respond to a request to confirm how many merchants it works with in The Big Apple, making it difficult to estimate the significance of this sales slump. 

However, DoorDash’s website says it has 7,245 restaurants in New York City, but given the company’s presence in other verticals, ranging from pet stores to florists, the specific portion of those losses impacting restaurants is impossible to measure with the numbers shared by DoorDash, if there has been any drop-off at all.

The New York City Department of Consumer and Worker Protection said in an email to Restaurant Dive that it is monitoring compliance with the new pay regulations through reports submitted by the delivery apps. The city department said the data included in those reports show the volume of deliveries in the city has remained steady since the wage increase took effect.

Steeper fees are necessary, DoorDash claims, to offset the cost of New York City’s minimum wage requirements for delivery couriers. DoorDash will now pay its workers $17.96 per hour of active time before tips, a departure from the “Alternative Method” allowed under the rule it had previously used, which compensated workers only for trip time but at a higher rate. The active time rate will rise to $19.56 on April 1, which could translate to even higher fees. 

The new scheduling perks for high-frequency Dashers may help retain top couriers. But the offer undermines the flexibility DoorDash says is its base value proposition for workers, which could further disrupt the company’s business model. 

“We know Dashers highly value flexibility, and we are disappointed that these changes will result in less flexibility and fewer earning opportunities for many Dashers. Simply put, many Dashers will no longer be able to work whenever they like and end up earning less money as a result,” DoorDash wrote in its press release. 

It’s unclear, however, how much of DoorDash’s declines in New York City can be tied to the ripple effects of the city’s minimum wage requirements versus general traffic slides experienced by many restaurant brands in recent months. Seventy-nine percent of restaurants surveyed by the National Restaurant Association reported lower YOY traffic in January, for example. The company didn’t share specific sales data from other East Coast cities with similar weather conditions to New York City, either, which could establish a valid baseline for comparison. 


Seattle may walk back wage hike for delivery drivers

Drivers for apps like DoorDash and Uber Eats say their earnings have plummeted since the $26.40 hourly minimum went into effect.

The city of Seattle is reconsidering the big wage hike it handed to app-based delivery drivers earlier this year after drivers said it has hurt their earnings rather than helped. 

City Council President Sara Nelson told Seattle’s KIRO Newsradio last week that she is talking with drivers and delivery apps about changing the city’s PayUp legislation that raised drivers’ hourly minimum wage to $26.40 on Jan. 13.

“This is an example of legislation that is having unintended consequences that are having wide impacts,” Nelson told KIRO.

The rate includes an hourly base wage as well as 80 cents per mile and coverage of certain expenses. It is well above Seattle’s regular minimum wage of $19.97, which is the highest in the U.S.

Delivery apps including DoorDash, Uber Eats and Grubhub responded to the increase by adding a $5 regulatory response fee to customers’ checks as well as bumping up some of their other service charges, resulting in noticeably higher prices for consumers.

The pay hike also attracted more drivers to the city, which increased supply just as demand for delivery was falling, said Michael Wolfe, executive director of local driver advocacy group Drive Forward.

According to a new survey by the group, drivers are now seeing fewer offers, longer gaps between trips and lower tips. As a result, most are earning 25% to 30% less than Seattle’s regular minimum wage before tips. “It’s made the problem worse,” Wolfe said.

The findings have been supported by data from the delivery apps. DoorDash earlier this month said that in the two weeks after PayUp went live, customers placed 30,000 fewer orders, costing businesses more than $1 million. Grubhub on Monday reported that drivers are now waiting an average of 102 minutes between orders, an increase of 437% compared to before the law was implemented.

Wolfe said he expected the City Council to begin working on new legislation next week, with votes to come in early April. Neither Nelson nor the City Council at large had responded to a request for comment as of publication time. 

Drive Forward, which opposed the current version of the law, is proposing a $22.45 minimum hourly wage plus 42 cents a mile.

DoorDash said it would prefer to see the law repealed entirely, though it is willing to work toward a standard that is less costly than PayUp.

“Our message to the Council is the same as the message we’re overwhelmingly hearing from Dashers, businesses and consumers in Seattle–it’s time to fix this broken law,” a DoorDash spokesperson said in a statement. 

Washington Works, a union-backed group that pushed for PayUp, said that the wage hike has made gig work more sustainable and contributed to a more resilient economy. 

“Corporations are working hard to convince policymakers and the public that minimum wage for workers is a failure—an argument both out of touch with the values of our city and the overwhelming evidence that living wages are good for everyone,” the group said in a statement.

Seattle is one of just a few jurisdictions to mandate delivery-app worker pay in the U.S. A similar rule went into effect in December in New York City, where couriers now earn at least $17.96 per hour before tips. 

Like in Seattle, delivery apps in New York have responded with increased fees and other operational changes. Earlier this month, DoorDash said the higher costs were hurting demand, but city officials contended that deliveries have remained steady.


ItsaCheckmate rebrands, acquires AI voice provider VoiceBite

The order integration company has expanded into an all-around digital ordering supplier and now goes by just Checkmate.

VoiceBite uses AI to take orders over the phone and, soon, the drive-thru. | Image courtesy of Checkmate

Restaurant tech supplier ItsaCheckmate has a new name, a new look and a new product.

The company now known as Checkmate unveiled a rebrand on Monday and followed it up Wednesday by announcing that it has acquired VoiceBite, a provider of AI voice ordering technology for restaurants.

As Checkmate, the company marks its evolution from an order integration specialist to an all-around digital ordering supplier for limited-service chains, with products ranging from online and mobile app ordering to kiosks, catering loyalty and analytics.

It said its goal is to provide customers with more flexible digital solutions. It drove the point home Wednesday with the addition of VoiceBite.

“Acquiring VoiceBite allows us to provide a truly unified ordering experience for our restaurant partners,” said Mike Bell, Checkmate’s chief of strategy, in a statement. 

VoiceBite uses AI to take orders over the phone and plans to launch a drive-thru version of its technology in the fourth quarter. It said its AI can handle 95% of calls without human intervention.

The company was founded just last year, but said that its team has developed voice AI products in the past that are used by hundreds of quick-service restaurants.

“We’re thrilled to join Checkmate and combine our advanced voice AI ordering with their solutions and integrations,” said founder and CEO Robert Nessler in a statement. “This unification will rapidly accelerate voice AI development for restaurants.”

Terms of the deal were not disclosed. 

It underscores two trends in restaurant technology: consolidation and AI voice. 

Checkmate is just the latest company to position itself as a one-stop-shop for restaurant tech as operators look to simplify their tech stacks. And AI voice is becoming a more common feature in those systems because of its ability to automate order taking and upselling.


Operators predict continued catering boom

Return-to-office is increasing demand for business catering as employers use meal plans to draw workers in-person, according to a survey from ezCater.

Dive Brief:

  • A vast majority (97%) of restaurant operators surveyed by ezCater said they expect year-over-year growth in catering, the catering platform said in a report emailed to Restaurant Dive.
  • About three in four operators said they expect 20% or higher growth in catering business this year. Many of the operators that expect such growth are planning to expand services, enlarge or repurpose existing space or add human resources to accommodate demand.
  • The return-to-office trend is fueling the expansion of restaurant catering, especially as employers use food as a perk to help with retention and increase in-office attendance.

Dive Insight:

Offering food through an employer-provided meal program can help a restaurant reach new customers. About 47% of people who had a restaurant meal through an employer ended up ordering from the restaurant later, ezCater found. 

Order volumes are likely to grow, as 82% of customers expect to order the same amount or more food for work this year. Weekly ordering frequency is already up, with 39% of businesses that order catering ordering weekly this year, up from 32% in 2023. 

“The food for work opportunity is much bigger than just business catering. While organizations continue to feed their meetings and celebrations, they are also increasingly using restaurant food to feed their people on a regular basis,” said ezCater CMO David Meiselman. About 88% of surveyed workplace experience leaders said that food has helped bring more workers into the office.

To accommodate the increased demand for catering, ezCater suggests operators build menus that can accommodate both individual and tray catering, as well as offer variable sizes for trays and bundles and a combination of premium and budget options. 

“The size and scope of food for work orders can vary widely across organizations and industries, depending on the workplace, group, and occasion,” the ezCater report said. “A single company may need to feed 300 employees in a warehouse for $9 per person and 10 executives meeting at the corporate office for $25 per person. The key is to have the flexibility to meet these different needs.”

EzCater surveyed 600 people who regularly order food for their workplaces as well as 630 restaurant operators, 1,005 employees and 600 workplace experience leaders. The company also used its own proprietary data from millions of transactions across more than 100,000 restaurants and caterers to complete its report.


Uber shares tumble as weaker ride-share demand hurts Q2 forecast

forecast gross bookings below Wall Street expectations, sending its shares down 9% and putting the ride-share and food delivery company on course to shed more than $10 billion in market value.

Uber’s disappointing forecast was in sharp contrast to an upbeat guidance late on Tuesday from smaller rival Lyft, which lifted its shares up 8%.

Lyft posted strong quarterly results, leaning on an industry-wide pickup in demand, while Uber’s results signaled growth slowing from 2023 in which it posted first annual profit by dominating the U.S. ride-share market and delivery business.

Uber also missed Wall Street’s expectations for first-quarter gross bookings, a key metric that indicates the total dollar value of transactions on the platform.

CFO Prashanth Mahendra-Rajah pointed to softer ride-share demand in Latin America and the impact from certain holidays shifting into the first quarter.

Uber operates in about 70 countries and offers services including meal deliveries and freight booking. It had a 72% share of the U.S. ride-hailing market in the March quarter, up from 68% two years ago, according to YipitData.

Lyft, a much smaller company, offers ride-hailing services only in the United States and parts of Canada.

Uber reported a net loss of $654 million, driven by legal charges and provisions and those related to fair valuation of certain company investments. Analysts were expecting a net profit of $503.1 million.

“We were already expecting a deceleration in average spending in several markets due to slower-than-expected economic activity in the US in Q1 and persistent consumer pressures. However, this is way above the base case,” said Thomas Monteiro, senior analyst at Investing.com.

Lyft is trying to take market share from Uber in the North America market, especially since it hired David Risher as CEO last April.

Besides aggressively cutting costs, Risher has managed to add users to Lyft with shorter wait times and competitive fares.

Uber said it expects second-quarter gross bookings, or the total dollar value earned from its services, in the range of $38.75 billion to $40.25 billion, below estimates of $40.04 billion.

In the quarter ended Mar. 31, gross bookings came in at $37.65 billion, closely missing expectations of $37.92 billion.

Revenue rose 15% to $10.13 billion, narrowly beating the estimate of $10.11 billion. On an adjusted basis, Uber lost 32 cents per share, compared with expectations of 23 cent profit.


Uber and Instacart Team Up on Restaurant Deliveries, Challenging DoorDash

(Bloomberg) — Instacart is partnering with Uber Technologies Inc. to offer restaurant delivery through the Instacart app — taking on the top US food delivery app, DoorDash Inc.

Instacart users in the US will be able to order from hundreds of thousands of restaurants using an Uber Eats interface that will become available within the Instacart app sometime in the coming weeks. Orders will be fulfilled by Uber’s couriers, while grocery delivery will remain separate and operated by Instacart.

“You could say that we’re a threat to DoorDash both independently and teaming up as well,” Uber CEO Dara Khosrowshahi told Bloomberg’s Emily Chang in an exclusive joint interview with Instacart CEO Fidji Simo. “This is a highly, highly competitive marketplace. The beauty of this partnership is that both Instacart and Uber can continue to grow their business.”

Instacart is up 3% after the market open at 9:36 a.m. in New York after jumping as much as 7.9% in premarket trading. Uber is down 0.2% while DoorDash is down 1.6% after falling 5% in early trading.

Simo said she first approached Khosrowshahi about the idea. She declined to disclose specific financial terms of the deal but said that Uber will pay Instacart an affiliate fee for every order that her company passes on to it. Restaurant merchants won’t be able to tell whether the order is from an Uber Eats or Instacart customer, Khosrowshahi said, as Instacart restaurant orders will be funneled through Uber Eats.

Teaming up will allow Uber to tap Instacart’s customer base of suburban families — and allow Instacart to offer more value to subscribers paying for a $9.99-a-month membership, which now promises free delivery for grocery or restaurant orders over $35.

The partnership pits the pair against San Francisco-based rival DoorDash, which holds a commanding 67% share of the US food delivery market, according to Bloomberg Second Measure. DoorDash also runs a growing grocery business, which the company said last week had doubled for a third straight quarter. And it has the largest reported driver base, with 7 million in 2023 compared with 6.8 million for Uber globally and 600,000 for Instacart in North America.

US delivery apps like Uber, Instacart and DoorDash are seeking new areas for growth, which has tapered off since the pandemic when many customers developed a habit of regularly ordering in.

Also gone are the days of easy venture capital money to fund user growth. These companies now have an obligation to Wall Street investors to keep costs low and turn a consistent profit. Today they’re operating at a leaner scale while also expanding into non-restaurant deliveries and offering sponsored ad slots.

Instacart, which was founded in 2012, struck exclusive deals with grocery chains early on to bring their stock online, helping serve customers in the habit of making weekly grocery runs. But as those terms lapsed in recent years, DoorDash and Uber have also built out their grocery delivery offerings and onboarded a lot of the same retailers, successfully siphoning away last-minute or smaller-basket grocery purchases from Instacart. Competition has also grown as Amazon Inc. and Walmart Inc. have expanded further into delivering fresh produce.

Among third-party apps, Instacart still maintains a lead in big-ticket grocery purchases, based on public filings. It also has more than 5 million paid subscribers. Those loyal users represent more than half of the activity on the Instacart platform, which has over 7.7 million monthly active users, Instacart’s CFO Nick Giovanni said last November. And Uber, which began as a rideshare service serving affluent urban customers, sees Instacart’s family-centric, suburban demographic as a market it can tap into without making an actual acquisition.

“Certainly, Instacart is a very strong competitor as it relates to grocery,” Khosrowshahi said. “But for us it was an opportunity to expand essentially the Uber Eats business especially into the suburban markets where Instacart is particularly strong.”

In January, Wolfe Research analyst Deepak Mathivanan entertained the idea of Uber merging with Instacart as it presented “financial synergies on revenues,” prompting him to upgrade Instacart’s stock. Shares of Instacart, which went public last year trading as Maplebear Inc., had their biggest one-day percentage gain in three months after the report.

Khosrowshahi, a seasoned deal maker who has focused on reining in costs at Uber, said an acquisition is “not on the cards right now.” Instacart’s Simo said her company is committed to operating independently.

Analysts are expecting Uber’s delivery gross bookings growth to slow for a third straight quarter to 17% when the company reports first-quarter earnings Wednesday, according to estimates compiled by Bloomberg. That’s compared with DoorDash’s 21% growth reported last week.

The partnership is likely aimed at boosting order-volume growth, Bloomberg Intelligence analysts wrote, adding it is also “key to expanding the high-margin ad business” of the marketplaces.


Instacart Brings Groceries and Restaurant Food Together With Uber Eats Deal

Instacart has teamed with Uber to offer its customers restaurant deliveries via Uber Eats.

The collaboration, announced Tuesday (May 7) and due to roll out in the weeks ahead, lets Instacart customers order from a wide range of restaurants using a new “Restaurants” tab on the company’s app. 

“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,” Fidji Simo, CEO and chair of Instacart, said in a news release. 

“Whether it’s ingredients for a beloved family recipe, a prepared meal from a nearby grocer or takeout from a favorite restaurant — customers can now get the food they want, from the retailers and restaurants they love, all within the Instacart app,” she added. 

The partnership is the latest in Instacart’s efforts to expand its services beyond grocery deliveries. Last week, the company announced it was teaming with Kohl’s to let customers around the U.S. get same-day deliveries from the department store chain.

“With Kohl’s as one of the first department stores on our platform, we’re proud to continue expanding our selection beyond grocery, making everyday shopping for our customers easier for their busy lives,” said Blake Wallace, senior director of retail partnerships at Instacart.

At the same time, PYMNTS noted in last week’s report, “restaurant aggregators have been extending beyond food delivery and challenging Instacart’s hold on grocery.”

For example, December saw DoorDash add hundreds of grocery locations to its marketplace, telling investors that its built-in consumer base and labor infrastructure offered it an edge.

And Uber Eats added hundreds of additional grocery locations to its platform and embarked on a delivery partnership with Turkish quick-commerce firm Getir.

Uber said its latest partnership allows it to extend its “restaurant selection to millions of customers across the U.S., including families in suburban markets that use Instacart.”

These partnerships are all happening as consumers are cutting back on their food spending where restaurants are concerned, as the focus shifts to covering the essentials.

As PYMNTS wrote earlier this week, the current earnings season has offered “some telltale signs of pullbacks in what we might term ‘nice-to-have’ items, where dollars saved can be earmarked for other goods and services.”