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DoorDash and Instacart go head-to-head on ultrafast grocery delivery

DoorDash first out of the gate in New York City; Instacart set to follow in February

Both Instacart and DoorDash plan to roll out their own versions of ultrafast delivery (Photo: Instacart)

Convenience is getting even more convenient. The rise of third-party food and grocery delivery platforms was already a huge game changer for many, but those services are only getting faster as companies like GoPuff, Jokr and Gorillas push delivery times closer and closer to instantaneous. We’re entering the era of ultrafast delivery, in which consumers can get food and groceries delivered within 15 minutes.

But now, Instacart and DoorDash are throwing their hats in the ultrafast delivery ring. Last week, two insiders within Instacart leaked to The Information a plan to roll out 15-minute deliveries as soon as this coming February. Not to be outdone, DoorDash on Monday officially announced its rollout of ultrafast grocery deliveries in New York City, offering an assortment of 2,000 items that will be delivered in 10 to 15 minutes.

Instacart and DoorDash entering the space is a big deal. The ultrafast delivery model that’s been adopted by GoPuff and others has long been thought to be impossible — or at the least very difficult — for the larger food delivery apps to replicate.

The addition of an ultrafast option will necessitate a shift in the fundamental model of Instacart and DoorDash’s grocery businesses, which currently operate as marketplaces with partnering merchants and independent contractors who shop and deliver. Contrast that to the ultrafast model, which typically involves buying up wholesale merchandise and distributing it via a network of local warehouses and distribution centers.

At the moment, neither company has a robust network of storage locations. Instacart said in June, though, that it plans on building fulfillment centers in supermarkets across the country, but that project won’t be complete until June 2022. DoorDash, meanwhile, launched fulfillment centers in eight different cities last year, but there hasn’t been much activity on that front since.

The Instacart insiders, who had firsthand knowledge of the plan according to The Information, also told the outlet that Instacart is courting “a company that manages couriers to quickly deliver goods from the same grocery stores whose merchandise Instacart already offers to its existing customers.”

An Instacart spokesperson denied that there were any plans in the works. But if the leaked plan comes to fruition, it would be a major shift for Instacart, which currently offers deliveries within a two-hour window.

For the moment, though, DoorDash has beaten Instacart to the punch with the launch of ultrafast delivery in New York City out of a new DashMart location in Chelsea, with plans to add more locations and partners throughout the city in the coming months.

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“Many New Yorkers already turn to DoorDash for their next meal or essentials purchases, which puts us in an exciting place to deliver on the promise of ultrafast delivery,” said DoorDash President Christopher Payne. “Consumers increasingly expect an effortless, enjoyable experience, so while we are starting with DashMarts, our goal is to expand this offering to select grocery and convenience partners.”

But a key difference between Instacart and DoorDash and ultrafast delivery startups like Jokr is that they use independent contractors, not employees, and that’s drawn the ire of commentators who are pointing out that grocery delivery workers have felt overworked and underpaid for years. 

Those tensions culminated in DoorDash strikes across the country in July and a nationwide Instacart strike in October, and now Dashers and shoppers, the companies’ respective terms for their couriers, are faced with the prospect of an even tinier delivery window.

DoorDash, however, said that the new ultrafast delivery option will make life easier on its couriers. Specifically for ultrafast delivery, the company will employ full-time courier employees — not independent contractors — with regular schedules who are actively managed by DashCorps, a logistics and staffing brand under DoorDash’s umbrella.

“Millions of people across the country turn to platforms like DoorDash to earn supplemental income when, where and how they choose, providing them with unique flexibility and choice that is so valuable,” added Payne. “We’re proud to be a leader in providing economic opportunities that fit the lives of so many people. And now we’re excited about the new employment opportunity that DashCorps offers for a different type of work.”

Other commentators expressed concern about the potential impact on small businesses and startups in the grocery and convenience space. Instacart, with its nearly $40 billion valuation and network of over 60,000 stores, has the potential to swallow up the entire industry before competitors can even get off the ground. So too does DoorDash, which boasts a valuation around $28 billion with its own network of partnering grocery stores that it acquired in a deal with Albertsons Cos.

DoorDash had an answer to those concerns as well. The company is partnering with the Yemeni American Merchant Association (YAMA), a small business advocacy and social support group based in New York with over 6,000 bodegas owned by Yemeni Americans. DoorDash plans on integrating those companies into DoorDash Marketplace and providing them with technology to boost their delivery operations.

“New York City’s bodegas have been the lifeblood of so many communities across all five boroughs,” said Youssef Mubarez, YAMA public relations director. “As technology advances, we want to help our members innovate alongside, and we’re excited for the opportunity to partner with DoorDash in this way. Through our work together, we’ll be able to arrive at more solutions that help bodegas meet the current moment, and move into the future with promise.”

New York City — until now at least — provided a good model of what the ultrafast delivery market would look like without Instacart and DoorDash’s involvement. Several startups in the city, like Jokr, Gorillas and Buyk, offer 15-minute delivery, but already local businesses are concerned about their ability to compete with that level of convenience. And that’s without Instacart and DoorDash in the picture.

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Jack Daleo

Jack is a staff writer for FreightWaves and Modern Shipper covering topics like last mile delivery and e-commerce fulfillment. He studied at Northwestern University, majoring in journalism with a certificate in integrated marketing communications. Previously, Jack has written for Backpacker Magazine and enjoys travel, the outdoors, and all things basketball.