DoorDash

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DoorDash, Inc.
TypePublic company
NYSEDASH (Class A)
IndustryOnline food ordering
FoundedJanuary 2013; 8 years ago (2013-01)
Palo Alto, California, U.S.
FoundersTony Xu
Stanley Tang
Andy Fang
Evan Moore
Headquarters
Area served
  • Australia
  • Canada
  • United States
Key people
ServicesFood delivery
RevenueIncrease US$2.886 billion (2020)
Increase US$-0.461 billion (2020)
Total assetsIncrease US$6.353 billion (2020)
Total equityIncrease US$4.700 billion (2020)
Number of employees
3,886 (2020)
Websitedoordash.com
Footnotes / references
[1]

DoorDash, Inc. operates an online food ordering and food delivery platform. It is based in San Francisco, California, United States. With a 56% market share, it is the largest food delivery company in the United States.[2] It also has a 60% market share in the convenience delivery category.[3] As of December 31, 2020, the platform served 450,000 merchants, 20,000,000 consumers, and 1 million deliverers.[1]

History[edit]

In the fall of 2012, Stanford University students Tony Xu, Stanley Tang, Andy Fang and Evan Moore (now a partner at Khosla Ventures)[4] were getting feedback on a mobile app for small business owners when a macaroon store owner asked for help using technology for deliveries.[5]

In January 2013, they launched PaloAltoDelivery.com in Palo Alto, California.[5] Early customers were mostly students at Stanford University.[5] In the summer of 2013, it received $120,000 in seed money from Y Combinator in exchange for a 7% stake. It incorporated as DoorDash in June 2013.[6][7]

In October 2017, CFO Mike Dinsdale left DoorDash less than a year after he started working for the company.[8]

In December 2018, DoorDash overtook Uber Eats to hold the second position in total US food delivery sales, behind GrubHub.[9] By March 2019, it had exceeded GrubHub in total sales, at 27.6% of the on-demand delivery market.[10] By early 2019, DoorDash was the largest food delivery provider in the U.S., as measured by consumer spending.[11] It maintained that market position in 2019.[12]

In October 2019, DoorDash opened its first ghost kitchen, DoorDash Kitchen, in Redwood City, California, with four restaurants operating at the location.[13]

By June 2020, DoorDash had raised more than $2.5 billion over several financing rounds from investors including Y Combinator, Charles River Ventures, SV Angel, Khosla Ventures, Sequoia Capital, SoftBank Group,[14] GIC,[15] and Kleiner Perkins.[16]

In April 2020, during the COVID-19 pandemic, DoorDash announced it had "stockpiled tens of thousands of gloves and bottles of hand sanitizer" and was offering them to delivery drivers for free. The company also said it had changed the default drop-off option to contactless delivery.[17] That month, DoorDash became the fastest growing food delivery service.[18]

In October 2020, the company launched its "Reopen for Delivery" program to have brick-and-mortar restaurants that have closed due to the COVID-19 pandemic partner with local ghost kitchen operators to offer food delivery- and pick-up-only service.[19]

In November 2020, DoorDash announced the opening of its first physical restaurant location, partnering up with Bay Area restaurant Burma Bites to offer delivery and pick-up orders.[20][21]

On December 9, 2020, the company became a public company via an initial public offering, raising $3.37 billion.[22][23][24][25][26][27][28][29][30][excessive citations]

Acquisitions[edit]

  • Caviar – In October 2019, DoorDash acquired Caviar, a service specializing in food delivery from upscale urban-area restaurants that typically do not offer delivery, from Square, Inc. for $410 million.[31][32][33]
  • Scotty Labs – In August 2019, the company acquired Scotty Labs, a tele-operations startup company that focuses on self-driving and remote-controlled vehicle technology.[34][35]
  • Chowbotics – On February 8, 2021, DoorDash announced its acquisition of Chowbotics, a robotics company known for its salad-making robot.[36][37][38] The companies did not disclose the terms of the deal, but Chowbotics was valued at $46 million in 2018.[39]

Demographics[edit]

In July 2021, DoorDash conducted a national survey and found that 58 percent of their workers are women, that this is not their primary occupation, and DoorDash is not their main source of income. 80 percent of them say the main reason for they work for the company is the flexibility to set their own schedule.[40]

Controversies and criticism[edit]

Withholding of tips[edit]

In July 2019, the company's tipping policy was criticized by The New York Times, and later The Verge and Vox and Gothamist.[41][42][43][44] Drivers receive a guaranteed minimum per order, which is paid by DoorDash by default. When a customer added a tip, instead of going directly to the driver, it first went to the company to cover the guaranteed minimum. Drivers then only directly received the part of the tip that exceeded the minimum. A DoorDash customer filed a class action lawsuit against the company for its "materially false and misleading" tipping policy.[44][45] The case was referred to arbitration in August 2020.[46] Under pressure, the company revised its policy.[47][48] The company settled a lawsuit with District of Columbia Attorney General Karl Racine for $2.5 million, with funds going to deliverers, the government, and to charity.[49][50][51]

Antitrust litigation[edit]

In April 2020, in the case of Davitashvili v. GrubHub Inc. DoorDash, Grubhub, Postmates, and Uber Eats were accused of monopolistic power by only listing restaurants on their apps if the restaurant owners signed contracts which include clauses that require prices be the same for dine-in customers as for customers receiving delivery.[52][53][54][55] The plaintiffs stated that this arrangement increases the cost for dine-in customers, as they are required to subsidize the cost of delivery; and that the apps charge “exorbitant” fees, which range from 13% to 40% of revenue, while the average restaurant's profit ranges from 3% to 9% of revenue.[52][53][54][55] The lawsuit seeks treble damages, including for overcharges, since April 14, 2016 for dine-in and delivery customers in the United States at restaurants using the defendants’ delivery apps.[56][52][53][54][55] Although several preliminary documents in the case have now been filed, a trial date has not yet been set.[57]

Data security[edit]

On May 4, 2019, DoorDash confirmed 4.9 million customers, delivery workers and merchants had sensitive information stolen via a data breach. Those who joined the platform after April 5, 2018 were unaffected by the breach.[58]

References[edit]

  1. ^ a b "DoorDash Inc. 2020 Form 10-K Annual Report". U.S. Securities and Exchange Commission.
  2. ^ "Which company is winning the restaurant food delivery war?". Second Measure.
  3. ^ "2021 Edison Trends U.S. Convenience Store Delivery Sales Report". trends.edison.tech. Edison Trends. January 28, 2021. Retrieved March 8, 2021.
  4. ^ Ekiel, Erika (November 30, 2015). "DoorDash CEO: Solving Problems of Time-Starved People". Stanford University.
  5. ^ a b c "The DoorDash Story". Medium. October 4, 2013.
  6. ^ Levy, Steven (November 9, 2015). "DoorDash Wants to Own the Last Mile". Wired.
  7. ^ Clark, Kate (March 21, 2019). "To fund Y Combinator's top startups, VCs scoop them before Demo Day". TechCrunch.
  8. ^ Dickey, Megan Rose (October 25, 2017). "DoorDash CFO leaves less than one year after joining". TechCrunch.
  9. ^ Griswold, Alison (February 14, 2019). "DoorDash has overtaken Uber Eats in US online food delivery". Quartz. Retrieved July 16, 2019.
  10. ^ Abril, Danielle (March 11, 2019). "DoorDash Has Pulled Ahead of GrubHub, Uber Eats in the On-Demand Food Delivery Race". Fortune. Retrieved December 9, 2020.
  11. ^ Littman, Julie (March 13, 2019). "DoorDash overtakes Grubhub in delivery market share". Restaurant Dive. Industry Dive. Retrieved November 12, 2020.
  12. ^ Holland, Frank; Reed, J.R. (January 17, 2020). "DoorDash takes the lead in the food delivery wars as the landscape dramatically shifts in 2019". CNBC.
  13. ^ Guerrero, Susana (October 14, 2019). "DoorDash is ready to deliver with new Redwood City commissary kitchen debut". San Francisco Chronicle.
  14. ^ Dvorak, Phred (February 8, 2021). "SoftBank Turns $11 Billion Profit, Helped by DoorDash". The Wall Street Journal. ISSN 0099-9660. Retrieved February 9, 2021.
  15. ^ "Data Sheet—What DoorDash Plans to Do With Another Half a Billion Dollars of Capital". Fortune. Retrieved April 26, 2018.
  16. ^ Wilhelm, Alex (June 18, 2020). "DoorDash confirms $400M raise, IPO timing unclear". TechCrunch.
  17. ^ Askinasi, Rachel (April 18, 2020). "Here's how delivery services like Grubhub, Postmates, and Uber Eats are adapting to the coronavirus restrictions and safety precautions". Insider Inc.
  18. ^ Williams, Chris A. (April 27, 2020). "DoorDash is the fastest growing meal delivery business during coronavirus lock down". The Philadelphia Inquirer, LLC.
  19. ^ Luna, Nancy (October 26, 2020). "DoorDash launches program to revive closed restaurants using local ghost kitchens". NRN.com. Informa. Retrieved November 10, 2020.
  20. ^ Lyons, Kim (October 24, 2020). "DoorDash partners with California restaurant to build new brick-and-mortar location". The Verge. Vox Media. Retrieved November 10, 2020.
  21. ^ Chang, Brittany (November 5, 2020). "DoorDash just opened its first physical location as the pandemic fuels a ghost kitchen boom". Business Insider.
  22. ^ Hussain, Noor Zainab; Franklin, Joshua (December 9, 2020). "DoorDash valued at $71 billion in blockbuster market debut". Reuters.
  23. ^ "DoorDash, the $13B on-demand food delivery startup, says it has confidentially filed for an IPO". TechCrunch. Retrieved May 29, 2020.
  24. ^ Farrell, Maureen (November 29, 2020). "Airbnb, DoorDash Aim for Higher-Than-Expected Valuations Ahead of Debuts". The Wall Street Journal. ISSN 0099-9660. Retrieved November 30, 2020.
  25. ^ Kellaher, Colin (November 30, 2020). "DoorDash Sets IPO Terms Pushing Valuation as High as $32 Billion". The Wall Street Journal. ISSN 0099-9660. Retrieved November 30, 2020.
  26. ^ "Should You Buy DoorDash After its $38 Billion IPO Valuation?". Bloomberg News. December 8, 2020. Retrieved December 9, 2020.
  27. ^ Rana, Preetika; Farrell, Maureen (November 13, 2020). "DoorDash IPO Filing Shows Big Revenue Growth, Profitable Quarter". The Wall Street Journal.
  28. ^ "DoorDash sells shares at $102 in IPO, pricing above range". CNBC. December 8, 2020. Retrieved December 9, 2020.
  29. ^ Griffith, Erin (December 9, 2020). "DoorDash Soars in First Day of Trading". The New York Times. ISSN 0362-4331. Retrieved December 9, 2020.
  30. ^ "DoorDash skyrockets in market debut, closes up 85%". CNBC. Retrieved February 27, 2021.
  31. ^ "Square Completes Sale of Caviar to DoorDash" (Press release). Business Wire. November 1, 2019.
  32. ^ Zhang, Jenny G. (August 1, 2019). "The Great Flattening: What a Giant Delivery Merger Means for Your Dinner". Eater. Retrieved February 26, 2020.
  33. ^ Griffith, Erin (August 1, 2019). "DoorDash Buys Rival, Caviar, for $410 Million". The New York Times.
  34. ^ "DoorDash acquires autonomous driving startup Scotty Labs". TechCrunch. Retrieved August 22, 2019.
  35. ^ Porter, Jon (August 21, 2019). "DoorDash takes another step toward automated food delivery". The Verge.
  36. ^ Rana, Preetika (February 8, 2021). "DoorDash Adds Startup Chowbotics for Meal Preparation". The Wall Street Journal. ISSN 0099-9660.
  37. ^ "DoorDash acquires salad-making robotics startup, Chowbotics". TechCrunch. February 8, 2021.
  38. ^ Lyons, Kim (February 8, 2021). "DoorDash has acquired salad-making robot company Chowbotics". The Verge.
  39. ^ "DoorDash Adds Startup Chowbotics for Meal Preparation".
  40. ^ "A Majority of Dashers Are Women. Here's Why They Choose DoorDash". DoorDash. Retrieved August 26, 2021.
  41. ^ Newman, Andy (July 23, 2019). "My Frantic Life as a Cab-Dodging, Tip-Chasing Food App Deliveryman". The New York Times. ISSN 0362-4331.
  42. ^ Vincent, James (July 22, 2019). "Delivery apps like DoorDash are using your tips to pay workers' wages". The Verge.
  43. ^ Ghaffary, Shirin (August 20, 2019). "DoorDash is still pocketing workers' tips, almost a month after it promised to stop". Vox.
  44. ^ a b Lampen, Claire (July 30, 2019). "Brooklyn Man Sues DoorDash Over Grifty, Misleading Tip Policy". Gothamist. Archived from the original on August 5, 2019.
  45. ^ Wayt, Theo (July 29, 2019). "Brooklyn man sues DoorDash for 'misleading' tipping policy". New York Post.
  46. ^ "Arkin v. DoorDash, Inc".
  47. ^ ABRIL, DANIELLE (November 12, 2019). "DoorDash's New Tipping Policy Has Increased Driver Pay". Fortune.
  48. ^ Newman, Andy (July 24, 2019). "DoorDash Changes Tipping Model After Uproar From Customers". The New York Times. ISSN 0362-4331.
  49. ^ Kerr, Dara (November 25, 2020). "DoorDash settles lawsuit for $2.5M over 'deceptive' tipping practices". CNET.
  50. ^ Canales, Katie (November 25, 2020). "DoorDash is paying $2.5 million to settle a lawsuit that accused the food delivery company of stealing drivers' tips". Business Insider.
  51. ^ "AG Racine Reaches $2.5 Million Agreement with DoorDash for Misrepresenting that Consumer Tips Would Go to Food Delivery Drivers" (Press release). Karl Racine. November 24, 2020.
  52. ^ a b c Allyn, Bobby (May 14, 2020). "Restaurants Are Desperate — But You May Not Be Helping When You Use Delivery Apps". NPR. Archived from the original on May 17, 2020. Retrieved May 20, 2020. Frank points to a clause in the contracts restaurants and the food delivery apps agree to that prohibits owners from charging delivery customers more than people who dine in, even though delivery costs more. "By not forcing those purchasing on apps to bear the whole amount of the fees, instead forcing all menu prices to rise together, in-restaurant diners are effectively subsidizing Grubhub's high rates," said Frank, who argues such an arrangement is anti-competitive and illegal.
  53. ^ a b c Baron, Ethan (April 14, 2020). "DoorDash, Uber Eats, Grubhub and Postmates make restaurant meals cost more: lawsuit - Four firms' rise has 'come at great cost to American society,' suit claims". Mercury News. Archived from the original on April 20, 2020. Retrieved May 19, 2020. Each of the firms uses “monopoly power” to prevent competition, limit consumer choice and force restaurants to agree to illegal contracts that have “the purpose and effect of fixing prices,” the suit claimed. ... The four companies give restaurants a “devil’s choice” that requires them to keep dine-in prices the same as delivery prices if they want to be on the app-based delivery platforms, the suit claimed. And restaurants must pay commissions to the delivery firms ranging from 13.5% to 40%, the suit alleged. ... Establishments are forced to “calibrate their prices to the more costly meals served through the delivery apps,” the suit alleged.
  54. ^ a b c Stempel, Jonathon (April 13, 2020). "Grubhub, DoorDash, Postmates, Uber Eats are sued over restaurant prices amid pandemic". Reuters. Archived from the original on April 17, 2020. Retrieved May 19, 2020. GrubHub, DoorDash, Postmates and Uber Eats were sued on Monday for allegedly exploiting their dominance in restaurant meal deliveries to impose fees that consumers ultimately bear through higher menu prices, including during the coronavirus pandemic. In a proposed class action filed in Manhattan federal court, three consumers said the defendants violated U.S. antitrust law by requiring that restaurants charge delivery customers and dine-in customers the same price, while imposing “exorbitant” fees of 10% to 40% of revenue to process delivery orders. The consumers, all from New York, said this sticks restaurants with a “devil’s choice” of charging everyone higher prices as a condition of using the defendants’ services.
  55. ^ a b c Dolmetsch, Chris (April 13, 2020). "GrubHub, Doordash Accused in Suit of Pushing Prices Higher". Bloomberg News. Archived from the original on April 19, 2020. Retrieved May 19, 2020. The New York customers, who seek class-action status, say the delivery services charge “exorbitant fees” that range from 13% to 40% of revenue, while the average restaurant’s profit ranges from 3% to 9% of revenue, making delivery meals more expensive for eateries. “Restaurants could offer consumers lower prices for direct sales, because direct consumers are more profitable,” the plaintiffs said. “This is particularly true of dine-in consumers, who purchase drinks and additional items, tip staff, and generate good will.”
  56. ^ Davitashvili v GrubHub Inc., Link from NPR article (2020).
  57. ^ "Court Listener". July 28, 2020. Retrieved July 28, 2020.
  58. ^ Whittaker, Zack (September 26, 2019). "DoorDash confirms data breach affected 4.9 million customers, workers and merchants". TechCrunch.

External links[edit]

Coordinates: 37°47′08″N 122°23′45″W / 37.7856°N 122.3958°W / 37.7856; -122.3958