![]() Rick Camac, dean of restaurant and culinary management at the Institute of Culinary Education, said restaurants and food delivery companies are still trying to work out the economics of delivery. "Helping brick-and-mortar businesses compete, succeed and flourish in these rapidly changing times is the core problem we are trying to solve," Xu wrote in a filing ahead of the IPO. Xu, who washed dishes in a Chinese restaurant when he was growing up, insists DoorDash is trying to help small businesses compete in a world where consumers want the convenience of app-based delivery. But other restaurants have created virtual kitchens or "ghost kitchens," succumbing fully to the delivery economy. Around 25 restaurants have signed up with DC To-Gogo, one such effort in Washington, D.C. Some restaurants are banding together to provide their own delivery. DoorDash says those caps simply 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. But suburban families put in larger orders and drivers encountered more predictable traffic and parking so they could deliver more efficiently, Shmulik said. 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, holds 26%, while GrubHub has 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 Association.ĭoorDash now controls 50% of the U.S. restaurant traffic - including visits to fast food outlets and food trucks - consisted of 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 securities 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 said it turned a profit of $23 million in the second quarter this year, but followed that with a $43 million loss in the third quarter. DoorDash reported a net loss of $667 million in 2019 and lost $149 million in the first nine months of 2020.
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