DoorDash is maybe the most popular meal-delivery service in the U.S. and has hundreds of thousands of users. The DoorDash business model aims to benefit both users and restaurants, since it allows individuals to order food and beverage from different places on one single platform while providing the businesses with an extended customer base.
DoorDash has grown quickly and has overcome large players such as GrubHub, Uber Eats, and Postmates, with an estimated 35% market share. That is a great business, considering that on-demand food delivery services are increasing 20% per year and are expected to reach $365 billion in revenue by 2030.
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DoorDash’s history starts back in 2013, when four students from Stanford — Tony Xu, Stanley Tang, Evan Moore, and Andy Fang — founded the so-called PaloAltoDelivery.com.
At the time, food delivery platforms would simply serve as restaurant listings, so the students decided to test this new business model (in a small area) where the platform would be responsible for the deliveries too.
As soon as they had confirmed the business model, the founders rebranded into DoorDash and joined the accelerator Y Combinator. The company expanded rapidly and, two years later, it served 18 cities in the U.S., with a valuation of over $600 million.
Throughout its history, DoorDash has faced several lawsuits, especially regarding drivers as contract workers. But that did not avoid the company from reaching the top spot in its market.
At the end of 2020, DoorDash decided to IPO. Currently, the company is present in over 4,000 cities in the United States, Canada, Australia, Japan, and Germany, and one million drivers are registered as Dashers.
DoorDash is still owned by its founders; while Tony Xu holds the position of the company’s CEO, Andy Fang is the CTO. Christopher Payne, who worked in the eBay’s board from 2009 until 2014 and has been Tinder’s CEO back in 2015, was DoorDash’s COO from 2016 until 2021, when he was pointed the president of the company in May of the same year.
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DoorDash relies on three kinds of fees, that can vary based on location and demand. They are:
DoorDash takes up some percentage of the order subtotal every time a transaction is complete on its platform. The restaurants must choose a plan:
DoorDash has launched DashPass, a subscription service that offers unlimited deliveries with no delivery fees (on orders over $15) for $9.99 per month. There are more than 1.5 million subscribers nowadays.
DoorDash Storefront is software for restaurants that want to own their personalized ordering and delivery system. Merchants pay a monthly subscription to use the platform.
DoorDash has expanded its delivery service to over 2,500 convenience stores, with some large retail players, such as CVS, Walgreens, 7-Eleven, Wawa, etc.
DoorDash has acquired four companies so far:
Partnered with the San Francisco restaurant Burma Superstar, DoorDash opened Burma Bites, its first restaurant. It is a takeout and delivery operation that uses the company’s online infrastructure. Menu prices range from $2.95 to $20.
It is their B2B side, but it works just as restaurant-to-customers. The merchant only needs to sign up for accepting orders from corporate clients.
DoorDash charges for displaying ads on its inventory. Restaurants that want to be placed at the top pay more.
Let’s take a look at the DoorDash Business Model Canvas below:
DoorDash’s customer segments consist of:
DoorDash’s value propositions consist of:
DoorDash’s channels consist of:
DoorDash’s customer relationships consist of:
DoorDash’s revenue streams consist of:
DoorDash’s key resources consist of:
DoorDash’s key activities consist of:
DoorDash’s key partners consist of:
DoorDash’s cost structure consists of:
Below, there is a detailed swot analysis of DoorDash:
With focus and investments in logistics and operating systems, DoorDash has become the top representative of food and convenience store delivery services. And, according to the company’s speakers, DoorDash has the intention to expand aggressively into delivery markets. That can be seen as the brand is utilizing, investing, and even making acquisitions considering top technology, like self-driven cars, that may soon be employed in its business model.
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Thank you for this fabulous info on this company. I dash for them and I wanted to understand their business model.