This is Zack Fuss, an investor at Irenic Capital. Today, I’m joined by Matt Newberg of HNGRY to help us break down DoorDash, the popular food delivery service. DoorDash was founded in 2013 by 4 Stanford students who saw an opportunity to make it easier for people to get the food they love delivered to them. Today, DoorDash’s three-sided marketplace serves as one of the largest local delivery companies in the world. It serves millions of customers and partners with hundreds of thousands of restaurants across 27 countries, run-rating at over $50 bn of gross merchandise value. We will discuss how DoorDash is working to build the infrastructure for local commerce; expanding its offering beyond restaurants, introducing a vertically owned convenience channel, ghost kitchens, and advertising to build a durable competitive advantage and work towards a sustainably profitable business model. We hope you enjoy this breakdown of DoorDash.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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Show Notes
[00:02:52] - [First question] - The size and scale of DoorDash and the industry today
[00:04:35] - Early growth and business history
[00:08:33] - Unit economics of a DoorDash order
[00:11:37] - Creative ways DoorDash is maintaining margins and driving growth
[00:13:33] - Optimizing delivery operations to minimize overhead
[00:16:45] - White-labeling versus first-party logistics
[00:20:03] - How restaurants maintain their own margins and customers while using DoorDash
[00:23:04] - Overview of their recruitment and labor model for delivery drivers
[00:24:36] - Implications of new legislation treating delivery drivers as employees
[00:27:51] - Positive and negative impacts of DashMart, ghost kitchens, and automation
[00:30:53] - The importance of ghost kitchens and how they work
[00:36:23] - Automation and its role at DoorDash
[00:39:15] - Virtual brands in the restaurant industry
[00:43:18] - Advertising sales models on DoorDash and similar apps
[00:45:20] - What ads look like on these apps
[00:46:22] - How grocery store profits from slotting fees translate to delivery
[00:47:33] - Main takeaways from studying DoorDash as a business
