![]() But other restaurants have created virtual kitchens or “ghost kitchens,” succumbing fully to delivery. Around 25 restaurants have signed up with DC To-Gogo, one such effort in Washington. Some restaurants are banding together to provide their own delivery. The pandemic, he said, only heightened the awareness that restaurants need a platform to help sort out curbside service, takeout and delivery. Payne stressed that DoorDash is trying to present a range of options to restaurants, including providing them with an online ordering platform but letting them do their own delivery. DoorDash says those caps force it to charge consumers more. Several cities, including New York and Chicago, and the states of New Jersey and Washington have temporarily capped fees that delivery companies can charge restaurants. DoorDash says it reduced commissions for the smallest restaurants during the pandemic, but the fees will likely remain an issue. Some independent restaurants have been vocal critics of the company, saying its commissions - which can approach 30% - are too high. White says DoorDash also has the most variety in its listings, giving it less exposure to any one restaurant chain. But suburban families put in larger orders and drivers encountered more predictable traffic and parking so they could deliver more efficiently, Shmulik said.ĭavidson analyst Tom White, who has a “buy” rating on DoorDash’s stock, said the company’s strong market share gains and future possibilities, including grocery and retail delivery, outweigh the risk of slower growth once the pandemic subsides. Skeptics thought the economics of food delivery would fall apart in less dense areas, because there was lower demand. That’s a change from 2018, when GrubHub was the market leader with 39% share and DoorDash held 17%.ĭoorDash pulled ahead by concentrating on suburbs and smaller cities while its rivals stayed mainly in big cities, said Mark Shmulik, an analyst with Bernstein. Its chief rival, Uber Eats, controls 26%, while GrubHub holds 16%. In the second and third quarters of this year, that had jumped to 90%, and it may stay elevated even when the pandemic ends, according to Hudson Riehle, a senior vice president with the National Restaurant Assocation.ĭoorDash now controls 50% of the U.S. restaurant traffic - including visits to fast food outlets and food trucks - was picking up food to eat elsewhere. DoorDash is also candid about the impact of the coronavirus, saying it expects its growth rate to slow in the coming quarters as the pandemic ends.īefore the pandemic, 63% of U.S. In a government filing, DoorDash said it expects to continue to spend heavily as it tries to expand internationally and add non-food businesses to its platform. ![]() The company did turn a profit of $23 million in the second quarter this year, but followed that with a $43 million loss in the third quarter. Last year, it spent $410 million to acquire Caviar, an upscale rival.ĭoorDash had a net loss of $667 million in 2019 and lost $149 million in the first nine months of 2020. DoorDash has lost money in every year since its founding, citing the cost of developing its platform and expanding into new markets. ![]() The company’s growth hasn’t come without headaches. “DoorDash is a platform that’s enabling the small, local merchant to play in this space, bringing the product in minutes, not days.” “Ultimately, a lot of these trends will stay,” he said. The funding from the IPO will let DoorDash expand into areas like delivery from groceries and convenience stores, he said. Christopher Payne, DoorDash’s chief operating officer, said customers’ expectations of convenience and quick delivery only accelerated during the pandemic. ![]()
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