The New York City Council overrode Mayor Eric Adams’ veto of the grocery delivery minimum wage bill with 76% support, clearing the two-thirds requirement and passing by a larger margin than July’s vote, Wells Fargo tells investors in a research note. The firm estimates a $65M incremental cost headwind for Instacart (CART), and while the company is assumed to bear the full burden of the additional costs, Wells expects Instacart to pursue operational changes and pricing to mitigate the headwind. Wells Fargo, which has an Equal Weight rating and $57 price target on the shares, sees a more difficult path to passing through additional labor costs given both DoorDash (DASH) and Uber (UBER) already pay minimum wage on grocery orders in NYC.
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