DoorDash is riding high currently sitting at the top of the list of most frequented food delivery services following its IPO in December. Much of the company's success can be credited to a surge in demand due to the pandemic, but with restaurants beginning to reopen as coronavirus vaccines become more widely available, engagement on the platform is expected to decrease.
For Prabir Adarkar, DoorDash CFO, the expected decline in usage will not impact business in the long term because people have come to rely on the ease of ordering from the platform.
"In our experience, consumer behavior tends to be sticky, and so when consumers have discovered DoorDash and have been able to order from their favorite restaurants and enjoy the luxury of on-demand convenience, new habits get formed," he told Cheddar. "And those new habits continue to persist over the long run."
Adarkar pointed to Florida, Georgia, and Texas markets as examples of demand remaining consistent while industries, restaurants in particular, have been able to operate without the same restrictions they faced earlier in the pandemic.
Delivery Fee Increases
Consumers certainly benefited from food delivery services, but it came at a price. As rising service charges ate up as much as a third of delivery costs for consumers, some major cities across the U.S. implemented fee caps. Adarkar said fee increases are not set in stone and the company looks forward to slashing them for both merchants and consumers while boosting income levels for Dashers.
"In all the conversations we've had with city officials, these price controls are built as temporary measures related to the emergency orders that are related to in-store dining restrictions, and so it's our expectation that over time, as these restrictions on in-store dining fall away and as consumers get back to dining inside restaurants, these price controls that are related to that status will fall away and we will revert back to pre-price-control pricing," he noted.
In California, where Proposition 22 was passed, allowing gig workers to be defined as independent contractors, Akbar said Dashers are already making more money. He claimed in places like San Francisco and San Diego, drivers make upwards of $30 per hour.
"It's only been two months since Prop. 22's gone into effect, but we've already seen a 50 percent increase in Dasher sentiment post-Prop. 22 as well as a significant impact on Dasher earnings," he alleged.
DoorDash Competition
When it comes to competition, Adarkar said the company's focus is on its customer base and how it can improve the overall experience to remain the top delivery service.
"Historically, we've always been laser-focused on our customers. That's what's enabled us to enjoy the success that we've enjoyed thus far, and so, by that I mean, it's creating better products and services for merchants to help them grow their businesses," he said.
"We started in the restaurant category. We've now extended into convenience and grocery, and in the short time we've been in convenience and grocery, we're already the market share leader according to third party data."
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