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DoorDash provides an online food and consumer goods delivery platform, with a view to providing consumers with easier access to their favourite restaurants, and assisting food service businesses in reaching a greater number of customers.

DoorDash was founded in 2013 by Stanford University students Tony Xu (“Xu”), Evan Moore, Andy Fang (“Fang”), and Stanley Tang. DoorDash was created with the intention of building an effective on-demand delivery infrastructure for local cities, utilising lessons from businesses that have effectively created the sharing economy. The Company was built around the concept of helping small retailers reach a broader base of consumers.

Before launching the Company officially, the DoorDash team created a prototype website that included a choice of eight local restaurants, whose menus they uploaded in PDF format. Orders were placed via a Google Voice phone number shared by the founders, who would make the deliveries personally. They called their business Palo Alto Delivery. The founders continued to make deliveries for around six months, as well as taking on part-time delivery jobs for companies such as Domino’s Pizza and FedEx to learn more about the concept.

The DoorDash team later joined the Y-Combinator incubator program, where they changed the Company’s name to DoorDash. While they continued to develop their service, including the creation of a mobile app, the Company began attracting investor attention, completing its first round of investors funding in 2014. To date, DoorDash has raised more than $186 million in five rounds of funding, including investments from Khosla Ventures, Sequoia Capital, and Ooga Labs.

DoorDash has expanded significantly, offering services across 15 metropolitan areas in the US, including major cities such as New York, Chicago, Los Angeles, and Boston. The Company has also started delivering other non-food items form partners like 7eleven.  Recent reports suggest that the Company is valued at around $700 million.

Business model of DoorDash

Customer Segments

DoorDash provides a food delivery service to the general consumer market. It targets the same demographics as many other similar online food ordering service providers, typically marketing its platform to customers that do not have the time, capacity or inclination to cook for themselves.

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This largely comprises, relatively tech savvy young professionals and young families with working parents who have less time to prepare and shop for food, but have a reasonable amount of disposable income that can be spent on eating restaurant-quality food. Recent reports suggest that the largest demographic for online food ordering services are technologically engaged consumers aged between 30 and 49.

DoorDash manages to differentiate its food ordering service from traditional takeaway companies by providing delivery for restaurants and food outlets that do not have their own delivery services. This generally opens the platform to a higher quality of participating restaurants, which attracts a more affluent clientele. DoorDash also delivers large orders for catered events, groups, and parties.

DoorDash currently serves only customers in the US. Its service regions are categorised as follows: Northern California, Southern California, Seattle, Minneapolis, and Other Cities, including Dallas, New York, Houston, Chicago, and Atlanta, among others.

Value Propositions

DoorDash provides value to its customers in the following ways:

  • Its broad network of participating restaurants, with the Company cooperating with numerous restaurants across the US, providing consumers with access to a broad range of international cuisines, including Japanese, Chinese, Mexican, and American;
  • Its domestic service reach, with the Company’s network of participating restaurants spanning 15 metropolitan areas in the US, including major cities such as New York, Washington DC, Atlanta, San Francisco, and Los Angeles;
  • Its accessibility and flexibility, with the Company operating a simple online ordering portal that is accessible through desktop and mobile browsers, as well as through mobile apps for iOS and Android systems, allowing customers to place orders from anywhere; and
  • Its efficient delivery and logistics systems, with the Company utilising proprietary logistics technology to deliver orders to customers in 45 minutes or less.

Channels

DoorDash operates a website at www.doordash.com, through which it provides information on its activities, services areas, and delivery processes. The Company website also serves as its online ordering portal, which allows customers to search participating restaurants and food outlets in their area, browse menus, place orders, and complete transactions. The Company also provides mobile applications for iOS and Android platforms, that allow customers to place orders while on the move. The Company also operates a separate catering portal for deliveries for large teams and groups at www.doordash.com/for-business.

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DoorDash makes deliveries through its team of ‘dashers’, a group of independent delivery contractors who are able to sign up for shifts in a desired location. These ‘dashers’ are able to make deliveries by car, motorcycle, bike, and, in some locations, on foot, and are remunerated by the hour and are permitted to keep all tips. Anyone is able to sign up as a ‘dash through the Company’s website.

Customer Relationships

DoorDash operates a self-service online portal, through which customers are able to browse restaurants and menus, place orders, and organise and pay for deliveries without interacting with any members of the DoorDash personnel, or with employees of the restaurant. Customers can also access the same functionality through its mobile apps, browsing menus and placing orders independently.

DoorDash provides a range of online support resources to its customers, including FAQs, guides to service areas, delivery assistance, and other advice. Customers are also able to access personalised delivery assistance through the Company’s online portal, or can contact the Company over the phone.

DoorDash maintain a social media presence – including accounts with Instagram, Facebook, and Twitter – through which it is able to interact directly with customers, and keep customers updated with company developments. The Company additionally contacts its customers by email with deals, discounts, and offers for their area.

Key Activities

DoorDash is an online food delivery service provider. The Company operates an online food ordering portal, through which customers across 15 metropolitan areas of the US are able to browse menus of restaurants in their area, place orders, and arrange deliveries on a self-service basis. The Company’s network of participating restaurants includes a broad range of international cuisines, and includes restaurants that have not previously operated a delivery service.

DoorDash utilises proprietary logistics technology to ensure that its orders are completed quickly and efficiently, with the aim of making deliveries in 45 minutes or less from the time of ordering. The Company’s deliveries are made by a team of independent delivery contractors named ‘dashers’, who deliver orders by car, motorcycle, and on foot.

Key Partners

DoorDash works closely with a network of partners to provide an efficient and reliable service to its customers. These partners include:

  • Restaurant and Merchant Partners, principally comprising a broad network of participating restaurants and food outlets – including fast food franchises, independent restaurants, and foodservice chains – as well as various non-food retailers, including consumer goods retailers;
  • Affiliate and Marketing Partners, comprising a range of website and businesses that assist in marketing the Company’s services, and driving traffic to the Company’s online delivery portal;
  • Supplier and Service Partners, comprising suppliers of tools, technologies, and services that are utilised across the Company’s enterprise, as well as companies to which certain functions can be outsourced.
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DoorDash partners with a range of well-known food outlets, including Dunkin’ Donuts, Taco Bell, Hardee’s and Carl’s Jr. The Company also recently launched its first non-restaurant delivery deal with 7eleven to deliver a range of products to customers. The Company has also partnered with tech retailer B8ta to deliver other consumer goods and products.

Key Resources

DoorDash’s key resources are its online platform, its IT and communications infrastructure, its sales and delivery infrastructure – including its team of independent delivery personnel, its partnerships – in particular its network of participating restaurants and retailers, and its personnel.

Cost Structure

DoorDash incurs costs in relation to the development and maintenance of its online platform, the maintenance of its IT and communications infrastructure, the operation of its sales and delivery infrastructure, the management of its partnerships, the and the retention of its personnel – including remuneration for its ‘dasher’ delivery team.

Revenue Streams

DoorDash generates revenue through the operation of an online food ordering service, operating as an intermediary between food outlets and the general consumer market. The Company derives revenue from two principal streams:

  • Commission fees, including revenue derived from the collection of percentage-based commissions on all sales made through the Company’s online delivery platform; and
  • Marketing programs, comprising marketing and branding service for restaurants to promote their listings.

DoorDash remains a privately-owned entity, and as such it is not obliged to publish its financial results on its website. Research did not identify any reference to the Company’s revenue figures, however, reports suggest that the Company is experiencing growth.

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