HistoryTony Xu founded DoorDash in 2013., when it was initially known as Palo Alto Delivery. Xu and a team of his classmates at Stanford had been working with a local store manager on a separate startup project which had ultimately failed.
DoorDash stood out from its initial competition through hiring its own Dashers rather than relying on individual restaurants' delivering infrastructure. This allowed users of DoorDash to order from restaurants that did not have their own delivery system set up thus offering more food options to users. DoorDash has received many rounds of venture-capital funding reaching more than $1 Billion, allowing them to expand beyond food delivery and enter into different ventures such as autonomous vehicle development. DoorDash plans to utilize drones and autonomous vehicles, as well as other technologies, alongside Dashers to optimize the delivery process in the future.
Tony Xu was born in 1985 in Nanjing, China. His parents were first generation Americans, and they brought him to the country shortly after. Growing up, he would work with his mother at her restaurant washing dishes and doing other chores. He graduated with a bachelor's degree in Industrial Engineering and Operations Research from the University of California, Berkeley and an MBA from Stanford Graduate School of Business. 
The primary method of usage for DoorDash is through the company's mobile app. Users are able to order goods via pick-up or delivery options. The DoorDash order process is 4 steps long, and vendor availability is based on what is available within a certain proximity to the user's address, as well as the location and number of available Dashers to retrieve an order.
Users begin the ordering process by first selecting the category of the item they would like to order. Categories include convenience, fast food, burgers, desserts, Asian, Mexican, and others. After a category has been selected, vendors available within the area and can supply the user with their item are shown. Users can sort these vendors by different variables like distance and price. Once a vendor is chosen, users can pick the items from the vendor that they would like to order from.
After a user has completed the selection of their items, they are then instructed to pay for their order. The total cost of an order includes the price of the user's items, a DoorDash service fee (11% of an order), tax, a $2.00 order fee if a total comes to less than $10.00, and a delivery charge. The user can additionally give an optional tip of any quantity to the driver, which is strongly recommended by DoorDash.
Once an order is received by a customer, users are requested to rate their Dasher and tip them for their service on a 5-star scale. If a Dasher receives an overall ranking below 4.2 stars, they are not allowed to deliver for DoorDash. Previously, DoorDash would keep a portion of Dasher tips, but after widespread backlash, they have changed the policy to allow dashers to keep 100% of their tips. 
Uber Eats is an online food ordering and delivery platform created by Uber as an extension of their ride-sharing platform in 2014. UberEats has the same functionality as DoorDash in that users can select restaurants from categories, look at menus, read reviews, place orders, tip drivers, and track their delivery through the app.  What separates Uber Eats from DoorDash is that users can pay with their Uber credits and receive a reduced delivery fee if they share their driver with another user. This increases the wait time for users but offers them a built-in discount and saves Uber Eats drivers time and gas.
Uber Eats is has also been accused of taking advantage of their drivers by offering less than minimum wage and in one instance a glitch on the app removed the user's ability to tip, lessening their already low earnings per delivery.
GrubHub is the oldest of the popular U.S.-based online food ordering and delivery apps. It was established in 2004 in Chicago, Illinois as a carryout menu website, but began offering delivery in 2014 around the same time that Uber Eats and DoorDash began their own food delivery services. GrubHub shares all of the features common to other food delivery apps.  However, one difference between DoorDash and GrubHub is the minimum age to become a driver and how wages are calculated.
GrubHub drivers are required to be 19 or older (21+ in Las Vegas and Chicago) unlike DoorDash’s Dasher minimum wage of 18. GrubHub also takes a more holistic approach to earnings for their drivers. Drivers are paid based on the distance they travel for an order, plus the amount of time they spend on the road in order to account for traffic and wait times. Included in a driver’s payment are their tip and certain special offers from GrubHub like bonuses, challenges, and sweepstakes.
GrubHub is not immune to the controversy that has plagued food delivery apps of its kind. Concern over low wages, tipping disputes, and adding restaurants without their permission have all plagued the food delivery service. Additionally, in 2019 restaurants reported that GrubHub was charging them bogus fees based on calls made through the GrubHub app that lasted longer than 45 seconds. One New York-based restaurant owner accumulated over $10,000 in fees from GrubHub and resulted in a class-action lawsuit being filed against the company from the owner of a Chicago-based restaurant called Tiffin.
The newest food delivery app is called Snackpass. Unlike DoorDash, Uber Eats, and GrubHub, Snackpass caters specifically to college campuses and college-aged users by adding discounts for signing up with .edu email addresses and regularly sending notifications to users' phones that are related to current events on college campuses. 
Snackpass itself was founded by 3 students at Yale University as a side project outside of classes.  Due to it being created by college students, the natural audience to market to was fellow college students. The app launched a promotional campaign that includes 10 "full-time" employees (all college students), as well as 80 promotional student ambassadors in college towns across the United States.
On top of adding special deals and other incentives for students, Snackpass is also designed to be a social media. After ordering food from a restaurant, a user will get a "gift", which is usually related to the place they ordered from. These "gifts" are tokens denoted by emojis, a pizza slice when ordering from a pizza place, a sandwich from a sandwich place, etc. After placing an order, users have the option of sending this emoji gift/token to one of their Snackpass friends or discard it. These gifts can be accumulated and then redeemed for a free or seriously discounted item at restaurants in the Snackpass network. 
During the Coronavirus pandemic, all restaurants suffered due to the lack of regular diners in and out of their doors. This lack of business was felt extremely strongly by restaurants in college towns due to the majority of their business being sent away from their college town. Snackpass, however, launched a campaign to partner with local restaurants during the pandemic in order to keep them afloat despite their main customer base quickly leaving town. Snackpass' partnerships would include advertising specific restaurants through push notifications to users' phones promoting an item, or even having a "flash sale" where prices would be discounted for just a few hours, in an attempt to get people through the doors on an otherwise slow day. 
Postmates is owned by Uber and is another form of food delivery service. Postmates was originally launched in 2011 by Bastian Lehmann, Sean Plaice, and Sam Street. Like other third-party delivery services, Postmates relies on mobile phone application interfaces to deliver goods. Postmates offers delivery from local restaurants and consumer goods. In December of 2014, the company completed its millionth delivery and employed over 6,000 drivers. In May 2019, Postmates announced that it would be modifying its pay structure and removed a $4-per-job minimum which resulted in workers jumping to other platforms for employment. Postmates has faced allegations of monopolistic behavior in a lawsuit conducted by New York restaurant owners. They were accused of exploiting market powers by listing only the restaurants that agreed to contracts that severely undercut restaurant profits. The trial date has not yet been set.
Ethics of Third-Party Delivery
During the COVID-19 pandemic in 2020, third-party delivery apps became more popular. At this time, the restaurant industry was already in crisis as nationwide quarantines and shutdowns affected numerous industries. Third-party delivery apps acted as the lifeline for restaurants, however, their help came at a cost. During this time, small businesses voiced their concern about high commission fees from third-party platforms. Commission fees are not the only fees restaurants had to pay, with many platforms including delivery and subscription fees. A notable class-action lawsuit against GrubHub, DoorDash competitor, was brought by Minush Narula. Minush Narula owns a restaurant in Philadelphia and filed the lawsuit on the basis that GrubHub had been charging restaurants for customer questions or complaints. GrubHub argues that restaurants will see an increase in revenue while partnering with them, however, some owners claim that is not the case.
DoorDash was the victim of a cyber attack in late 2019, exposing the data of 4.9 million of its users. Included within this data breach were user's and partner's hashed passwords, addresses, phone numbers, and limited forms of payment information. The breach occurred in May 2019 but was not detected for about 5 months. Stolen account information is frequently used to make orders from users' accounts and delivered to a 3rd party.
DoorDash Dashers are contract employees who aren't protected by the US minimum wage or receive benefits like health care. Many dashers rely primarily on tips to support themselves. However, DoorDash's earlier business practices involved taking a portion of Dasher's tips as revenue , leading many Dashers to ask to be tipped in cash rather than through the app. In early 2019, numerous publications reported on the fact that DoorDash was taking a percentage of Dasher tips. This was controversial, resulting in a class-action lawsuit from consumers arguing that DoorDash's tipping policy was "materially false" , and DoorDash has since announced a change in their policy. Since then, they have said that drivers are allowed to keep 100% of their wages. This scandal put DoorDash on the radar as many drivers chose to not drive with them. . Companies such as Grub Hub are much more restaurant/ employee-centric and many people were more attracted to them 
Door Dash drivers get paid every single week on Fridays through a direct deposit. While many places such as Uber Eats do not give their employees the ability to choose their own hours, Door Dash allows drivers to choose their own times similar to Grub Hub. You are allowed to choose your times ahead of time and schedule hours for your specific needs. This is a nice option for those that want to use this job as a side hustle or a second source of income. DoorDash lets you schedule time anywhere from a week in advance to an hour beforehand. This ensures that there are enough deliveries to go around for all drivers . For unscheduled delivery hours, you can use the Dash Now option. The in-app map will light up in red for places that have a high enough need for additional drivers.
Door Dash drivers are given a lot of support. There is an in-app chat function that allows you to communicate with driver-support, however is reportedly slow at times .
Here are the requirements for DoorDash drivers:
- Be at least 18 years old
- Have a valid driver’s license and auto insurance
- Have an Apple or Android smartphone
In addition to this, you need to complete a set of orientation requirements. This orientation goes over how to fill orders, complete the delivery process, how to use the application, filing taxes and employment information. Doordash also requires that each of their drivers pass a background test and provide evidence of valid insurance before they begin driving.
The fact that there are minimal requirements to become a DoorDash employee is beneficial to both the company as it increases the number of eligible dashers and keeps delivery times low. Most drivers will respect their job, but some have been accused of stealing their customers' food. It is very easy for the driver to steal a customer's food as DoorDash only requires that a picture of the food being delivered be taken. After the picture is taken, the driver can take the food and leave without repercussions, assuming that the customer does not have footage of this happening. Additionally, a driver can cancel an order at any time after they have accepted it. Therefore, the driver can accept delivery, pick up the food from the restaurant, and then proceed to cancel the delivery. When an order is canceled by DoorDash and not the customer, the customer gets a refund on the order. With the customer receiving a refund if the driver has abused his/her power and picked up the food from the restaurant first, the restaurant is the business that is suffering.
Restaurants Added Without Consent
DoorDash, and other services like it, have a history of adding restaurants to their in-app list of available vendors without first contacting the restaurants . This leads to confusion when Dashers arrive at restaurants to pick up a user's DoorDash order, and no system for processing and delivering DoorDash orders have been put in place by these restaurants. This leads to canceled orders, refunded customers, and the potential for a negative reputation to be built up for the restaurant by failing to provide DoorDash users with their orders. This is at no fault of the restaurants but instead stems from DoorDash failing to contact and build partnerships with restaurants before listing them on their service. Additionally, DoorDash takes up to 30% of the commission from each order, taking money from small restaurants.
Profitability and Public Offering
During the coronavirus pandemic DoorDash grew tremendously, reporting a $1.9 billion revenue for the first nine months of 2020. Such numbers drew national attention as it easily surpassed their revenue for 2019 around $587 million. Yet, DoorDash’s many successes, many concerns have been drawn about the platform’s profitability. Similar to many startup tech companies, the delivery platform in its beginning years have failed to post a profit with hopes to do so in the near future after building its core infrastructure. Many remain split on whether DoorDash can realistically produce a profit in the next several years. Even so many investors remained eager to invest in the company when the platform went public in December 9th, 2020. The DASH stock went public at a price of $102 a share and quickly grew roughly 80% to $182 a share after the first hours of opening.
Skeptics cite DoorDash’s losses, food delivery competition, and the ending trends of the coronavirus pandemic as concerns for the platforms profitability. DoorDash in 2019 lost more than $600 million in an effort to capture more of the United States market. Additionally, the company has benefited tremendously by the pandemic which resulted in many consumers being more open to using food delivery services. Len Sherman, a professor at the Columbia Business School, cites that the platforms $23 million profit during the pandemic is reason for concern. He expects that although consumers will be open to using delivery platforms, many will opt to return back to normality in eating at physical locations. Furthermore, Market Research Firm Second Measure emphasized the competitiveness of the food delivery market due to the many similar competitors that offer almost identical pricing and services. Distinguishing its platform will remain a primary challenge for DoorDash.
In an effort to reach profitability, DoorDash CFO Christopher Payne highlighted that the platform will look to expand in many different forms of service. With a focus on being a merchant first company, Payne claims that the company will look into expand into convenience, grocery, and retail alongside expanding its reach beyond the United States, Cananda, and Australia.