Doordash Competitors Analysis [2021]: 4 Strongest Competitors

In this Doordash Competitor Analysis, we’ll be taking a look at one of America’s fastest-growing companies and whether they truly stack up against those brands also competing for a slice of the tech-based food delivery market.

Why?

Because while carrying out an in-depth competitor case study may give us useful insights into the biggest challenges and opportunities faced by Doordash, if we’re even going to get to that task, to begin with, then a much broader competitive analysis simply has to take place first.

That way, we really get to know which companies pose the biggest threat to Doordash’s status as undisputed industry leaders and what decisions the brand could make to see off those threats.

Below, we’ll look at how the San Francisco outfit stacks up against the likes of GrubHub, UberEats, PostMates, and HelloFresh, but first, let’s familiarize ourselves with the company.

 

Doordash Company Profile

Founded: January, 2013
Headquarters: San Francisco, California
Industry: Online food ordering
Market cap:  $61.525B (as of August 2021)

Unlike other food-based businesses such as Whole Foods or Chipotle, who have been around for decades, Doordash is a relative newcomer, having only been around for the past eight years.

Despite this, the company has managed to make an incredibly big splash in a relatively small amount of time, not that it’s been an easy ride.

When they launched in 2013, the company made it simpler for merchants to provide customers with delivery options. They created an app that allowed hungry customers to order from businesses who signed up to the app while at the same time allowing delivery drivers to sign up and serve as the middleman, bringing those food orders directly from business to customer.

In a blog post on Medium published months after their launch, Founders Tony Xu, Stanley Tang, Andy Fang, and Evan Moore insisted that they saw themselves more of a logistics company than a food company, stating that their ultimate vision was to create a “local, on-demand” version of FedEx.

It was an approach that worked for some time, but by 2019, the company had hit a snag. They were operating at a loss of $616 million, with most typical orders losing the company money.

The Impact of COVID-19 on Doordash

A year later, lockdown restrictions imposed as part of America’s response to the global COVID-19 suddenly brought the brand to greater prominence.

With in-person dining out-of-bounds in most places, Doordash found itself in high demand.

Their sudden growth was explosive, so much so that by December of 2020, the company went public and raised $3.4 billion, said to be one of the biggest tech IPOs ever.

Doordash has gone from strength to strength, boasting a 57% market share and making 1 million deliveries from 450,000 businesses to over 20,000,000 customers, ultimately making them the US’ largest food delivery company.

Doordash SWOT Analysis

A SWOT analysis can help us to firmly establish a company’s competitive position. So, as part of our competitor analysis, we’ll look at the strengths, weaknesses, opportunities, and threats for Doordash and, later, for each of their competitors.

STRENGTHS

 

  • Low-cost delivery fees for customers
  • Provides jobs opportunities for underemployed workers
  • Flexible schedule and financial stability for employees makes it an attractive company to work for
  • User-friendly mobile app.
WEAKNESSES

 

  • Competition from other similar apps leads to a lack of brand loyalty
  • Mistakes from drivers or merchants can reflect badly on the company
  • A limited number of drivers at peak times leads to delays
  • A flexible approach means driver retention is a problem.
OPPORTUNITIES

 

  • Available in 1,000+ cities in North America with room for expansion
  • Partnered with major brand names such as Wendy’s, Taco Bell, IHOP, and more
  • The business model allows for expansion into other categories beyond food
THREATS 

 

  • Reliance on technology
  • Inability to attract enough popular restaurant brands
  • Meeting the needs of drivers, businesses, and customers simultaneously
  • Legal issues, for example, parking regulations for drivers.

Doordash Top 4 Competitors – An Analysis

Doordash may be at the top of their industry right now, but they face some stiff competition, especially from these top five competitors:

1. UberEats

Founded: August, 2014
Headquarters: San Francisco, California
Industry: Online food ordering
Market cap:  $74.356B (as a subsidiary of Uber Technologies, as of August 2021)

The fact that UberEats launched within a year of Doordash in the same city isn’t the only reason why they’re the company’s number one competitor. They also own the second largest market share of 23%, though their actual profitability may be higher given that users can make purchases using the company’s own Uber Cash currency.

It’s the huge infrastructure provided by parent company Uber Technologies, coupled with the aggressive pursuit of beneficial partnerships and a knack for innovation, that poses the biggest threat to Doordash.

The ride-sharing app upon which the company originally built its success ensures they have a robust technological and operational infrastructure to meet customer demand. At the same time, the success of the Uber app has also opened up doors for UberEats rapid international expansion.

The company has a much larger global presence than both Doordash and Grubhub, which allows them to continue to thrive despite playing second fiddle in the US market.

However, the company is not without its limitations either. Several questionable business practices and issues relating to fair pay and monopolistic practices have damaged UberEats reputation. This presents an opportunity for Doordash in terms of learning from their competitors’ mistakes.

UberEats SWOT Analysis

STRENGTHS

 

  • Fast, 10-minute delivery
  • Strong brand recognition
  • Largest global presence of any business in this sector
  • Backed by a major publicly traded company.
WEAKNESSES

 

  • Criticism of wage policies for drivers may make employee retention difficult.
  • Damaged reputation
  • Expected to run at a loss until 2024
  • Mistakes from restaurants can further impact reputation.
OPPORTUNITIES

 

  • UberEats Pass allows for continued investment in customer retention
  • Plans to reduce service fees can improve restaurant retention
  • The use of Uber technological infrastructure allows for continued innovation
  • Investment in “virtual kitchens” allows for expansion beyond the core business.
THREATS 

 

  • Currently engaged in multiple lawsuits, which could lead to profit losses and further reputational damage.
  • Lost exclusive partnerships with major restaurants such as McDonalds – others could follow suit.
  • High fees for restaurants may see them opt-out and use other services instead.
  • Data breaches can be a cause for concern for investors, restaurants, and customers.

2. Grubhub

Founded: 2004
Headquarters: Chicago, Illinois
Industry: Online food ordering
Market cap:  $19.46B (as of August 2021)

As the second of only three publicly-traded companies in this market space, Grubhub is undoubtedly Doordash’s next biggest competitor.

The company originally began life as a means to provide easy, online access to restaurant menus in the Chicago area, but thanks to their multiple acquisitions of companies like Seamless, DiningIn, Delivered Dish, and Eat24, they inevitably expanded to follow what is essentially the same business model as the one used by Doordash:

Provide a delivery service for restaurants that don’t have their own, make it easy for customers to order food online, and provide job opportunities to delivery drivers.

The company made impressive ground, but as of summer 2021, were only able to gain a 16% market share, compared to UberEats’ 23% and Doordash’s 57%.

Still, while they may be trailing behind at the bottom of the “The Big Three,” they have devised a strategy that looks likely to give them a competitive advantage in some aspects.

Grubhub+

 

Their biggest plan of attack saw the launch of Grubhub+, a monthly subscription service that entitles customers to unlimited free delivery, 10% cashback on orders, and other perks.

The main reason for this was to address the same challenge faced by all online food delivery services; lack of customer loyalty.

It’s often the case that customers simply use whichever app will give them access to their favorite restaurants at good prices, meaning they may swap between two or three different apps.

Introducing a subscription service is a proven strategy for increasing customer retention. It may prove to be the key to their success in terms of regaining market share, especially since their Grubhub+ offer includes features that neither Doordash nor UberEats offer, included the aforementioned 10% cashback, access to exclusive menus and events, and more.

Use of Digital Media

Grubhub has also looked to set itself apart by focussing on specific niche audiences. While they still cater to everyone in America, their partnerships within the eSports community have seen them narrow their focus.

This approach has seen them use digital media creatively such as through Twitch-takeovers, a YouTube concert series, and partnerships with TikTok influencers designed to engage a younger crowd. Check out our article on “How Does Grubhub Make Money” here!

GrubHub SWOT Analysis

STRENGTHS

 

  • Strong performance in new markets
  • Robust brand portfolio – ability to leverage technologies and strategies from key acquisitions
  • High levels of customer satisfaction
  • Strong investment in training improves employee retention and ensures a skilled, motivated workforce.
WEAKNESSES

 

  • Struggles to compete against new entrants in the market
  • No clearly defined USP to separate it from competitors
  • Gaps in product offering – competitors are better at offering a broader range
  • Limited success when expanding beyond the core business.
OPPORTUNITIES

 

  • The recent takeover by Just Eat allows for rapid international growth
  • Grubhub+ presents an opportunity to improve customer retention
  • Investment in digital opens new sales channels and attracts new customers
  • Stable cash flow means the company is in a good position to expand and develop new income revenues.
THREATS 

 

  • Reliance on technology
  • Shortage of delivery drivers during peak times
  • Limited scope for innovation
  • Increased competition from both national and local/regional apps
  • Stricter legal regulations.

3. Postmates

Founded: May 1st, 2011
Headquarters: San Francisco, California
Industry: Logistics
Market cap:  $74.356B (as a subsidiary of Uber Technologies, as of August 2021)

Postmates is the most well-established of Doordash’s top competitors, having been around for a decade.

This could have given the company a competitive advantage, allowing plenty of time to develop a concrete strategy and build up a loyal customer following. However, that doesn’t seem to have been the case.

Online reviews for the brand are overwhelmingly negative, while their position as a subsidiary of Uber means they’re prone to the same kind of criticisms levied at their parent company.

For Doordash, this could provide a welcome opportunity to further cement their status as industry leaders, examining what it is about Postmates that customers seem to deplore and providing a better alternative.

All that being said, Postmates does have an advantage over Doordash in that it’s much better equipped at offering delivery services above and beyond food.

Indeed, while that may be what the company is best known for these days, its original purpose was to provide delivery options for all types of businesses, not just restaurants.

As such, their limited market share in the food-on-demand market is offset by their continued success in the quick-commerce sector.

Postmates SWOT Analysis

STRENGTHS

 

  • As a subsidiary of Uber, the company has the financial backing and technological infrastructure to ensure longevity and growth
  • Success in areas outside of food delivery
  • 24/7/365 delivery options
  • Strict policies to prevent delivery of prohibited items.
WEAKNESSES

 

  • High delivery charges in suburban areas
  • Limited reach – Only available in half the number of US cities as Doordash
  • Poor online reputation
  • Limited choice in the food delivery market
OPPORTUNITIES

 

  • The parent company provides an opportunity for international expansion
  • Success as a delivery service for non-food businesses gives them a great opportunity to offer other on-demand services
  • Partnerships with both large merchants and small businesses can be capitalized upon to appeal to both sellers and customers
THREATS 

 

  • Currently the target of a monopolization lawsuit which could result in further reputational damage and financial losses.
  • Further legal disputes regarding California labor laws
  • A low employee retention rate may affect the ability to compete.

4. Waitr

Founded: 2008
Headquarters: Lake Charles, Louisiana
Industry: Online food ordering
Market cap:  $133.71M (as of August 2021)

Despite being around since 2008, Waitr hasn’t enjoyed the same kind of national prominence as Doordash, Uber Eats, and Grubhub.

However,l this isn’t necessarily a bad thing.

The company has clearly identified a way to maintain a strong competitive advantage by focusing on smaller markets, particularly those in the southern United States. These are the kind of markets often overlooked by their bigger rivals, meaning Waitr has been able to enjoy success in a relatively uncrowded space.

That said, it was only a matter of time before the bigger players took note of Waitr’s success and moved in on their territory, and we do see the likes of Postmates and Doordash competing directly with them.

Still, their hyperlocal approach serves them well and allows them to offer a level of service for both merchants and buyers that is lacking from other companies.

Waitr SWOT Analysis

STRENGTHS

 

  • Hyperlocal approach appeals to suppliers and buyers
  • Focus on previously untapped markets allowed for early success
  • Leads in market share in some smaller cities and states.
WEAKNESSES

 

  • Lacks the financial backing and investment of its competitors
  • Focus on smaller markets
  • Limited brand awareness
OPPORTUNITIES

 

  • Opportunities to expand to other markets
  • Well-established partnerships with local restaurants may help them see off the competition.
  • Having switched to working with independent contractors rather than employees, Waitr has an opportunity to improve its financial position.
THREATS 

 

  • Competitors moving in on their market.
  • Focus on lower-margin delivery will continue to negatively impact financials.

Frequently Asked Questions About Doordash and its Competitions

Question: Who are Doordash’s smaller competitors?

Answer: The competitive analysis above lists Doordash’s four main competitors, though the company also faces competition from Deliveroo, Grab, Slice, and Just Eat.

Question: How does Doordash compete?

Answer: Doordash has gained a competitive advantage thanks to a data-driven strategy to continually improve its service and deliver increased satisfaction for customers, drivers, and merchants.

Question: Which is the best food delivery service to work for?

Answer: Doordash is regarded as the most popular food delivery service to work for as their base pay plus tips and promotions averages out at around $16 per hour.

What We’ve Learned From Our Doordash Competitors Analysis

Having looked at the strengths, weaknesses, and market position of Doordash’s four main competitors, it’s easy to see why the company has gone from trailing behind to leading its industry in a very short space of time.

Much as we saw in our Home Depot competitor analysis, a focus on delivering exceptional customer value (in Doordash’s case, via low delivery fees, ease of use, and convenience) can prove incredibly valuable in achieving success. The company has also managed to avoid much of the criticisms and controversies levied against rival brands like UberEats.

However, they’re not without their challenges if they wish to retain their market leadership in the long haul.

UberEats and Postmates, in particular, have the huge behemoth that is Uber Technologies behind them, providing both an infrastructure and global brand recognition, which makes them much better poised to grow in international markets. At the same time, Waitr’s focus on serving local businesses and customers likewise sets them apart.

Going forward, continued expansion in terms of areas served, and delivery options should help Doordash stay on top.

References

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