New York City Mayor Zohran Mamdani said Thursday that DoorDash Inc.‘s (NASDAQ:DASH) $17 billion deal to buy Instacart will raise prices for the city, but the company’s CEO Tony Xu said it will make delivery faster and more affordable.
Mamdani Objects to DoorDash-Instacart Deal
On Thursday, DoorDash agreed to acquire Maplebear Inc. (NASDAQ:CART), which does business as Instacart, for $65 per share, a 26% premium to its Oct. 22 close.
“Corporate consolidation means higher prices, harsher exploitation, and greater economic inequality for New Yorkers,” Mamdani said in a post on X.
He added that the company “couldn’t seem to find the money” to pay delivery workers until his administration forced it to give back more than $131 million in wages and penalties.
DoorDash and Instacart did not immediately respond to Benzinga’s request for comment on the Mayor’s post.
DoorDash Says Deal Will Lower Costs
Xu said on the company’s third-quarter earnings call on Thursday that Instacart’s orders unique to its network would add density to the last-mile network, bringing “efficiencies to offer faster delivery as well as lower cost throughout the system.”
He said that would “enable more affordable prices,” generating more sales for grocers and retailers and more earnings opportunity for shoppers.
Wage Settlement
Last month, DoorDash agreed to a $131.5 million settlement with the city over late and missing worker payments, admitting it “screwed up” while maintaining that its on-call pay method was legal.
“We’ve stood up to these giants before. That doesn’t stop now,” Mamdani said.
Earlier this year, Mamdani backed the Delivery Protection Act, a City Council bill meant to hold Amazon.com, Inc. accountable for what he called an exploitative business model that uses subcontractors to avoid responsibility for delivery workers.
Price Action: DoorDash’s shares closed 5.61% higher on Thursday at $179 and climbed 1.30% to $181.33 in extended trading.
Benzinga Edge rankings indicate DoorDash’s stock has a Momentum score in the 13th percentile and a Growth score in the 21st percentile.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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