- Two firms control 80% of the American food delivery market.
- Of these two, DoorDash is the market leader accounting for 53% of all food deliveries.
DoorDash is the largest food delivery service in America. According to a data presentation by BanklessTimes.com, it had a 53% share of the market as of 2021. BanklessTimes’ presentation also shows that DoorDash and its rival Uber Eats control 80% of the U.S. food delivery market.
The firm has carved out a dominant position by displacing its biggest competitor, UberEats which has maintained a 26% market share since 2018. Additionally, it has encroached on the turf of other players like Grubhub, Postmates, and Seamless.
Factors behind DoorDash’s rise
Many speculate why DoorDash has managed to achieve this feat while others have faltered. One of the reasons is that it has had a comprehensive approach to capturing the market. For instance, the Coronavirus pandemic saw consumer demand for food delivery shoot through the roof.
DoorDash positioned itself to capitalize on this trend and used it to increase its market share. Consequently, the firm was able to increase its annual revenues threefold. From a yearly revenue of $850M in 2019, DoorDash achieved an annual income of $2.88B in 2020.
DoorDash’s extensive reach
Many analysts also credit DoorDash’s steady growth to an aggressive marketing strategy and superior technology. That has seen them tap into the vast network of restaurants available in the U.S. The company serves more than 300,000 eateries. It has also won plaudits for its delivery-only strategy.
Further, DoorDash’s strength comes from the massive delivery fleet that it has built over the years. It has invested heavily in its infrastructure and logistics network, creating a seamless experience for its customers and restaurants. It has a modern fleet of Dashers, and its customer service is unmatched in efficiency and courtesy.
DoorDash’s path to success
Founded in 2013, DoorDash initially focused on delivering food from eateries that didn’t have a delivery option. It began operations in Palo Alto before expanding to other cities. In 2014, it raised $17.3 million in an investment round led by Sequoia Capital.
It would later raise $400 million in 2020 as part of a Series H funding round, which valued it at $16 billion. Before that, DoorDash acquired Scotty Lab in August 2019. The latter is a self-driving technology startup specializing in remote driving software for autonomous vehicles and robotics.
Despite its successes, DoorDash is not resting on its laurels. It is rolling out new features to entrench its market position. These include real-time tracking of its couriers’ progress in delivering your order.
That said, the company has drawn criticism for how it has handled some issues. For instance, it has courted a storm for handling customer tips in the past. Additionally, it has faced complaints of low wages and poor customer service.
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