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By Amanda Castro
Associate News Editor
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New York City Mayor Zohran Mamdani warns that DoorDash’s proposed $17 billion acquisition of Instacart could raise consumer prices, calling the deal an example of corporate consolidation.
The criticism puts potential costs to customers at the center of a deal DoorDash and Instacart are pitching as a way to offer consumers more choice and savings while strengthening their ability to compete with companies including Walmart and Amazon.
Customers of both delivery platforms, grocery retailers and Instacart’s approximately 600,000 independent-contractor shoppers could ultimately be affected if the transaction wins shareholder and regulatory approval.
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DoorDash is offering approximately $17 billion to acquire Instacart, the grocery and convenience delivery company founded in 2012. Under the companies’ plan, the Instacart brand and app would remain, while its shoppers could continue fulfilling orders as they do now.
“Corporate consolidation means higher prices, harsher exploitation, and greater economic inequality for New Yorkers,” Mamdani said in a post on X.
The mayor also connected his criticism of the acquisition to DoorDash’s recent $131 million-plus settlement with New York City over delivery-worker pay, writing: “Just last month, DoorDash couldn’t seem to find the money to pay their deliveristas — until our administration forced them to give back $131M+ in stolen wages and penalties.”
Newsweek has contacted Mamdani’s office and DoorDash for further comment.
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Could the DoorDash-Instacart Deal Raise Prices?
Whether consumers would ultimately pay more is one of the central questions Mamdani’s criticism raises.
Jay Aldebert, chief growth officer at International Services, Inc., told Newsweek that consumers should look beyond the initial benefits of the combination and consider what could happen to fees as competition declines.
“Customers might get a great introductory membership offer, but what happens to delivery fees, service charges and grocery prices six months or a year later? That’s the real test,” Aldebert said.
He said eliminating a major competitor could reduce pressure on delivery companies to compete on price, service, and value.
Some customers could also get an immediate financial benefit. DoorDash has said consumers currently paying $9.99 per month for separate DashPass and Instacart+ memberships would eventually pay a single membership fee instead of two. The companies have also said the combination could collectively save customers an estimated $100 million annually in membership fees.
Aldebert said a combined membership could genuinely save customers who already subscribe to both platforms, but cautioned against assuming company savings would automatically reach consumers.
“A single membership could be a win for customers currently paying for both services,” he said. “But let’s not confuse corporate cost savings with consumer savings.”
Aldebert added: “The question isn’t whether DoorDash can save money. It’s whether DoorDash will share those savings.”
Instacart customers would gain access to an additional 50,000 stores available through DoorDash’s platform, according to the companies. The question for consumers is whether those benefits and membership savings will hold up over the long term, particularly if the acquisition reduces competition among major delivery platforms.
Opposition has already emerged from the American Economic Liberties Project, an anti-monopoly advocacy organization. The group urges regulators to block the transaction, arguing that the combined operation would control nearly 60 percent of the third-party grocery delivery market.
“This merger represents the next frontier of data-driven abuse, exploiting massive asymmetries of power to squeeze worker compensation on the way in and drain consumer wallets on the way out,” Lee Hepner, senior legal counsel at the organization, said in a statement provided in reporting on the deal.
Aldebert said regulators could look beyond what shoppers pay and examine the combined company's relationships with workers and retailers.
“Regulators should be looking at consumer pricing, competition for delivery workers and the leverage this combined company could have over restaurants and grocery retailers,” he said.
Why DoorDash and Instacart Say the Deal Could Benefit Consumers
DoorDash and Instacart present a different argument from Mamdani’s, saying the combination would give consumers more options while giving grocery retailers technology and delivery infrastructure that could help them compete.
DoorDash co-founder and CEO Tony Xu said the proposed combination would combine Instacart’s grocery-fulfillment experience with DoorDash’s delivery network.
“That’s what this combination is really about, where DoorDash and Instacart can give every retailer a fighting chance at competing in the modern-day era,” Xu said during a call with investors.
DoorDash has expanded significantly beyond its original restaurant-delivery business. It entered grocery delivery in 2020 and now offers the full inventory of all 2,700 U.S. Kroger stores through its marketplace. The company has also added Costco delivery.
Instacart, meanwhile, has faced increasing competition. Consumer Edge data cited by the Associated Press showed its share of spending on U.S. delivery platforms declining from 26 percent five years ago to 18 percent, while DoorDash grew from 44 percent to 59 percent. Uber Eats remained just below 20 percent.
Mamdani Links Deal to DoorDash's New York Settlement
Mamdani’s criticism also stems from the city's recent dispute with DoorDash over its delivery workers.
In his Thursday post, the mayor said his administration had forced DoorDash to return more than $131 million in wages and penalties to workers. He contrasted that settlement directly with the amount DoorDash is now prepared to spend on Instacart.
“Just last month, DoorDash couldn’t seem to find the money to pay their deliveristas,” Mamdani wrote, before contrasting the settlement with the acquisition proposal.
Mamdani then broadened his criticism beyond workers to consumers, arguing that the deal reflects the dangers of consolidation.
DoorDash-Instacart Deal Faces Competition Questions
The companies argue that becoming larger could allow them to compete more effectively against much bigger businesses that have expanded their own delivery operations, including Walmart and Amazon.
Walmart, Amazon and Uber have all expanded their delivery offerings. DoorDash has similarly pushed beyond restaurant meals into groceries and other retail categories.
DoorDash has argued that combining its delivery network with Instacart’s grocery technology could help local grocers compete against those larger companies. Xu said major companies have invested aggressively in technology, rapid delivery and new fulfillment models, creating an increasingly challenging environment for smaller retailers.
But critics are focusing on competition within third-party delivery itself. The American Economic Liberties Project’s opposition shows the acquisition is already drawing anti-monopoly scrutiny outside government, though that advocacy group's assessment should not be treated as a regulatory finding.
The proposed transaction will likely require approval from Instacart shareholders and government regulators. The deal is expected to be completed by the end of 2027 or early 2028 if those approvals are obtained.
For consumers, that leaves the core economic question unresolved: whether the efficiencies promised by combining DoorDash and Instacart, including potentially paying for one membership instead of two, would outweigh the risks critics see in placing more of the delivery market under one company.
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Contact Newsweek editors on this story: Samantha Beech and Gray R. Thomas
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