DoorDash began life as a paloaltodelivery.com and at launch the four founders ran the entire operation, which included building the app, receiving orders and delivering them. It instilled a culture in the startup which is still ingrained today, as DoorDash employees spend one day a month as a ‘dasher’ delivering food.
In the first year of operations, DoorDash expanded to 70 restaurants in the Bay Area and received $2.4 million in funding. It grew at a rate of 20 percent every week, according to Y Combinator.
Its main goal was to build an artificial intelligence system capable of perfecting delivery, by taking every variant of the delivery process and using the data to better estimate delivery time and reduce errors. Named Deep Red in homage to IBM’s chess system that beat Garry Kasparov, the system is still in place today, recommending restaurants to users and assigning the most capable rider to a delivery.
While it has not perfected delivery, DoorDash has established itself as the leader in the US market, surpassing incumbent Grubhub and global leader Uber Eats. In 2020, DoorDash was responsible for 45 percent of all food delivery orders, holding a double digit advantage over everyone else.
DoorDash aggressively expanded into new markets, controversially adding restaurants onto the platform without contacting them first. When it launched in New York City in 2015, several restaurants complained about DoorDash for hiking up prices and riders collecting deliveries without their consent.
It is not the only time DoorDash has courted controversy and survived. It is one of the ringleaders of the gig economy in the US, employing over 200,000 ‘dashers’ who are entitled to none of the benefits of regular employment. This is the case for all food delivery apps, but DoorDash has made itself a larger target by reportedly stealing tips from riders.
It has also been criticised for its marketplace commission charges, which can sometimes go above 30 percent. DoorDash doesn’t offer a set rate for restaurants, instead it varies depending on several factors. Again, 30 percent is a common rate for food delivery apps, but due to DoorDash’s size, it has become a larger target.
While it may not be loved, the controversies don’t seem to harm DoorDash’s growth or funding. It has raised $2.5 billion so far, from Sequoia Capital and the SoftBank Vision Fund, the latter of which is also the biggest shareholder in Uber. SoftBank has reportedly tried to merge the two companies.
Instead of merging with Uber, in 2019 it acquired Caviar from Square for $410 million. Caviar is still available to use, but DoorDash has routed all of the systems and engineers over to its own platform.
DoorDash also launched a shared kitchen in 2019, which operate similar to dark kitchens that Deliveroo and Uber Eats use in Europe. These kitchens are located in areas with lower expenses and are delivery only, reducing the operating cost. DoorDash currently runs one in Redwood City, California, but intends to add more in the future.
Even though it has never posted a profit, DoorDash is preparing to go public either this year or in 2021.
The US market has consolidated in the past two years – Uber Eats has acquired Postmates for $2.4 billion and Just Eat Takeaway acquired Grubhub for $7.1 billion. However, with three major competitors still fighting, it’s unlikely DoorDash will be able to raise delivery and service prices anytime soon to better accommodate its riders.
That inability to change the business model is also likely to keep DoorDash from making any meaningful profit. Grubhub, the only US food delivery service on the stock market, recently complained that food delivery is not enough to build a sustainable and profitable business.
We have collected data and statistics on DoorDash revenue, usage and availability. Read on below to find out more.
|Launch date||July 2013|
|HQ||San Francisco, California|
|People||Tony Xu (CEO), Andy Fang (CTO), Parbir Adarkar (CFO), Christopher Payne (COO)|
Note: DoorDash has been silent on revenue, annual run rate and total transaction volume. Data comes from documents leaked by The Information and estimates.
Source: The Information
Note: DoorDash has said it “aims to be profitable”, but has never managed publicly announced a profitable year.
Source: The Information
DoorDash Total Raised
Note: Estimate from total number of food delivery app users divided by percentage market-share of food delivery market.
DoorDash US Market Share
DoorDash US competitors: Food Delivery Market Share
DoorDash Competitors: Revenue and Countries Available
Note: Just-Eat Takeaway revenue includes Grubhub. Uber Eats revenue includes Postmates.
DoorDash other key stats
- DoorDash generated $900 to $1 billion revenue in 2019 (The Information)
- In that same period, it lost $450 million (The Information)
- Similar to Uber Eats, DoorDash has never recorded a profit
- In the past two years, DoorDash has grown from a mid-level competitor to leader in the US. In 2020, it controlled 45 percent of the US food delivery market share (CNBC)
- DoorDash has been valued at $16 billion (CNBC), higher than Grubhub’s acquisition price (TechCrunch), but lower than Uber Eats (WSJ)
- DoorDash acquired rival Caviar from Square for $410 million in 2019 (Eater)
- 100 million DoorDash deliveries were made between 2013 and 2018 (Bloomberg)
- Over 200,000 drivers deliver food for DoorDash
- 7,500 people are employed by DoorDash
- DoorDash average order size was $37.28, only 20 percent spent more than $50 (Rakuten)
- DoorDash average delivery time was 37 minutes in 2019 (DoorDash)
- A San Francisco restaurant turned away $500,000 in orders due to demand (LA Times)