As the pandemic recedes, third-party delivery companies like DoorDash, Grubhub, and Uber Eats, which all remain unprofitable, are facing something of an existential crisis.
The pandemic has undeniably been a boon for third-party food delivery companies. DoorDash, as we described late last year, posted profits for the first time in its history, owing largely to pandemic-fueled deliveries to the suburbs. Similarly, Uber told investors late last year that it too expects to finally hit profitability, likely by the end of 2021, owing largely to—you guessed it—UberEats.
Well at least it’s almost over, amiright? 2020, what a mess. It always had a new way to hurt us, only ever briefly pausing the pain to give us some good news (looking at you, MBJ), and felt gratuitously endless. You really do not need market research to tell you that 2020 was horrific, but through it all, we’ve been there with you, chronicling market research and the world that shapes it every week in this humble blog.
DoorDash went public this week, smashing its expected market value on the heels of its first profitable quarter. The company currently owns nearly half of the US third-party delivery market, up from their one-third share only a year earlier. According to DoorDash, they claimed just 17% of US market share in 2018, but have steadily increased this to their current ~50%, which is twice that of its largest competitor, UberEats.
Casual dining has been in some trouble for a while now--let’s recall that even before March of this year, the segment was getting t-boned, undercut in cost and value proposition by fast casual, and rendered generic and dated by upstart independent eateries. They were stuck in the middle, in every sense of the phrase--between generations, economic classes, and the urban/rural divide, fast casual was built for everybody but seemed to be appealing to relatively few.