The DoorDash(ing) Pursuit Of A Silicon Valley Abomination
A business model that inherently lacked profitability avenues, showed unprecedented discoveries on the contrary.
A typical food-delivery business is propelled by three kinds of people- the hungry, busy and the lazy. However, DoorDash is FAR from typical — with investments from SoftBank and a few others, the $13 billion tech company was still struggling to bank profits.
Regulators and investors have often poked holes and been sceptical of the business model, and for very valid reasons — an average delivery fee of $5–$8, is split two ways- the driver and the company; leaving little opportunity to make any abnormal profits. Moreover, accusations over its tipping policyand fabricating partnerships by adding restaurants on their site without permission, preceded its reputation.
All in all, characterised by a risky investment laced with mendacity, wooing Wall Street was a challenge.
Until… the pandemic hit.
The IPO documents which were made public on November 13th, exhibited jaw-dropping growth where average order prices sky rocketed to an average of $37.28.
Delivery Hero in Germany and Just Eat in the UK have shown equally promising growth curves — dropping hints of a transitioning consumer lifestyle across the world.
According to a study by DoorDash, 56% of customers said the amount they ordered takeout has increased amidst the pandemic and one in five parents told us they are choosing takeout as an opportunity to go for a drive or get some alone time.
The stay-at-home consequence of the pandemic is bearing heavily on the service sectors such as restaurants and while the high-end locations were snooty about accepting orders through these delivery apps, this structural shift has rendered them desperate for sign-ups.
In the face of global economic distress, the food-delivery businesses are experiencing rehabilitation through unforeseen economic growth and booming profits. In light of this, however, it’s common to ask — will these profits sustain as the pandemic ebbs away?
In my opinion, what first started as the next best alternative has now been imbibed into the lifestyle of people — with a digital revolution that brings food to your doorstep from the comfort of your couch, few are willing to forgo.
The convenient affordability factor for 44% of the customers at DoorDash, coupled with the gradual adoption of the digitised convenient economy, the pandemic has simply sped the process, across the world.
In India, the food delivery app Swiggy has already exhibited promising signs of such integration as it has evolved from being an online food ordering and delivery platform and expanded to fulfilling grocery delivery services.
With every development, however, comes a set of challenges, which questions the extent to which people are willing to accept and allow for change. As these service-based tech companies are slowly paving the way to incorporate their services to feed into the digitised convenience economy, their ambitions have birthed a social consequence by establishing an unintentional class divide between the couch potatoes and precariously paying customers.
As tech giants rise towards speedy expansions to accommodate transitioning consumer lifestyle, an attempt to rekindle the faith Wall Street had in tech may be well underway — the bulls and bears will prevail to make the most.
