Instacart should be worried about DoorDash and Uber's new deal

There’s a battle brewing at Costco, and it’s not over parking spaces.

The warehouse retailer will offer delivery across the US through DoorDash.

The companies already worked together in Puerto Rico and some international markets, DoorDash said on Thursday.

One day earlier, Costco expanded its partnership with Uber Eats to 47 states, up from 17.

That’s bad news for Instacart, which has worked with Costco since 2017.

DoorDash and Uber Eats both started out delivering restaurant orders.

The more expansive partnerships with Costco are their latest move to expand into the grocery business — and, potentially, eat Instacart’s lunch.

Uber CEO Dara Khosrowshahi called grocery and other retail sales “another trillion-dollar opportunity” on an earnings call in February.

And DoorDash CEO Tony Xu has said that the service’s growing number of partnerships with grocers gives it an edge over Amazon, which has been expanding its own grocery delivery facilities.

Amazon is building its own network of warehouses and getting its own delivery workers to bring groceries to customers’ doors in as little as 30 minutes.

DoorDash, Instacart, and Uber Eats, meanwhile, largely compete by filling orders from traditional retailers’ shelves with their own armies of gig workers.

Costco represents a special addition to the delivery services’ offerings.

Costco’s in-store visits from shoppers were up 18% over the last seven years, Business Insider previously reported.

Visits to Walmart and Target were roughly flat over the same period.

The chain “ranked among the most-searched retailers not yet available on DoorDash,” the delivery service said on Thursday.

Uber President and COO Andrew Macdonald recalled shopping at Costco on Saturdays with his father growing up in a Wednesday post on X. “I’ve already started carrying on the tradition with my own daughters,” he wrote.

Last year, for example, the delivery service started offering a credit on some orders to Costco executive members, who pay a higher annual membership fee at the retailer and receive more benefits.

The benefit is “continuing to deepen the relationship with Costco, but also with folks that are looking for that additional value,” Instacart CFO Emily Reuter said on the service’s earnings call in August.

Do you have a story idea about Uber, DoorDash, or Instacart?

Contact this reporter at abitter@businessinsider.com or via encrypted messaging app Signal at 808-854-4501.

Use a personal email address, a nonwork WiFi network, and a nonwork device; here’s our guide to sharing information securely.