DoorDash redoubles effort to expand beyond restaurant delivery

DoorDash, launched in a Stanford University dorm room by four students in 2013, has a habit of approaching delivery with a growth mindset.

In 2015, to help it gain on competitors including Grubhub and Uber Eats, the company partnered with large restaurant chains, including Wendy’s, Jack in the Box, Taco Bell, and The Cheesecake Factory. By 2019, DoorDash overtook Grubhub to become the biggest food delivery app.

Now the company and its Caviar subsidiary account for 66% of the food-delivery market, according to a recent report from Bloomberg Second Measure. DoorDash CEO Tony Xu recently told the Financial Times that to keep growing, the company has a two-pronged strategy: continue expanding geographically and beyond restaurant delivery.

“The two largest areas of investment are expansion and penetration outside of the US, as well as the same outside of restaurants,” he said.

Non-food for thought: Xu trotted out a sports metaphor to explain the logic of expanding beyond restaurant delivery.

“If you already have a large consumer base, and a large driver base that is interacting with you many times a week, you just have more shots on goal to be able to launch into these adjacent categories,” he said.

At the Groceryshop conference in September, DoorDash announced new partnerships with Eataly and Lowe’s Markets. It also has a delivery partnership with BJ’s Wholesale Club and, beyond groceries, with Dick’s Sporting Goods and Sephora.

Delivering results: Like other companies that boomed during the pandemic, DoorDash cut back when consumers became less housebound and required fewer deliveries. In 2022, the company laid off 1,250 corporate employees.

But unlike other companies that grew during the worst of Covid but are struggling to find their footing these days, including Peloton and Zoom, DoorDash has been in growth mode.

The company reported revenues of $2.2 billion for Q3 2023, a YoY increase of 27%.