DoorDash changes and a Philadelphia Delivery App Update

Before I get into the article, I wanted to talk a little bit about the state for these delivery apps in the Philadelphia area. This is not a definitive case study, just my opinion based on the conversations I’ve had with restauranteurs, peers and friends. General consumers are starting to figure out that ordering through the apps like Grub Hub, Uber Eats and Door Dash is a huge waste of money. Most of the restaurants are marking up their prices in order to cover the 10% - 30% fee that the apps charge them for using their service. Restaurants are seeing a return to call in volume and a decline in their app ordering. Restaurants are also sick and tired of trying to work off of 5 different iPads during dinner service, so they’re slowly dropping the apps that aren’t performing with order volume and/or with their operation.

I’ve heard countless stories about Grub Hub specifically in recent weeks where drivers go right past the person’s house, leave the food on the door step and it sits there for hours and the most normalized “my food just never showed up.” I once was a victim to this with Uber Eats where I tracked down my food using the map function on the app only to find that the driver had stopped at a house in North Philadelphia to “hang out” for awhile before delivering my food. I had enough time to hop in my car, drive to the house and knock on the door. He opened the door and I was like, “bro, where’s my food?” With extremely blood shot eyes he handed me my bag, still stapled shut from the restaurant, and I went on my way. Unreal…

The apps seem to be getting smarter though. In recent months I’ve heard from multiple restauranteurs that DoorDash is offering life time zero delivery fee contracts. This means that the restaurants don’t have to pay a dollar to DoorDash to use their service. We’ll see how this plays out for DoorDash. Companies need to make money and by not charging the restaurants that might mean more money charged to customers in the form of service fees? Time will tell.

- Rob Wright, Owner Table Talk

The following article was originally posted by Julie Littman for Restaurant Dive, a great resource for restaurant specific news.

Dive Brief:

• DoorDash revamped its product offerings for small- and medium-sized restaurants with expanded access to diner insights and educational resources, the company announced Monday.

• The platform’s Merchant Product Suite now provides a “choose your own adventure” pathway allowing restaurants to select offerings based on their goals, such as growing online, DoorDash Chief Revenue Officer Tom Pickett said in a statement.

• DoorDash developed these product revisions based on feedback from merchants who pushed for a suite tailored to a partner’s perspective, a DoorDash spokesperson said.

Dive Insight:

Restaurants often told DoorDash they couldn’t gauge what products would best serve their business or how products could work together.

With this information, the company created its latest features. Merchants can now explore products nested beneath three goal categories: “grow online”; “attract new customers/increase order volume and size”; and “optimize current business.” These tabs suggest DoorDash tools that work best for each of these strategies. Under “grow online,” for example, DoorDash suggests its Marketplace and Storefront offerings. 

“Our focus right now is making sure that those products can be easier to use and that we can build products to help teach the playbooks that we’ve used to build a successful digital marketplace in our own right, such that these businesses can do it on their own,” DoorDash CEO Tony Xu said during the company’s Q2 2022 call with investors.

The aggregator also added customer insights to its Merchant Portal and Business Manager app to provide business owners more information on orders, such as breakdowns of customer types, heat maps to show where people are ordering from and recommendations on custom marketing. 

DoorDash also launched a Learning Center that offers step-by-step instructions and short videos that can be viewed online at any time to help merchants grow their businesses. 

These additional products and services for restaurant partners come a few days after DoorDash expanded its Storefront capabilities to allow customers to earn and redeem loyalty rewards online and to pay with gift cards. Those enhancements were derived from a partnership with Lettuce Entertain You. 

DoorDash added over 80,000 net new businesses to its marketplace during the 12 months ending June 30, according to the company’s Q2 investor letter.