As the industry has continued to benefit from rapid adoption of food delivery throughout the coronavirus pandemic, Doordash’s revenue in the fourth quarter reportedly more than tripled from a year ago. This cements the platform’s market share gains ahead of rivals GrubHub and Uber Eats.  

 

According to data cited by Second Measure, sales for meal delivery services grew 138% year-over-year, collectively, in Dec. 2020. By that time, 35% of U.S. consumers had already ordered from one of the services, up from 28% a year ago. Per Second Measure’s data, DoorDash and its subsidiaries earned 52% of U.S. consumers’ meal delivery sales in Dec., and Uber Eats came in second place with 22%. Then came Grubhub and its subsidiaries at 18%. Being the fourth major U.S. meal delivery company, Postmates earned 7% of the U.S. meal delivery market in the same month.

 

But when it comes to Los Angeles, as of Jan. 2021, Grubhub and Postmates — which is now owned by Uber— are tied as the most popular services in the area.

 

Doordash said it logged $970 million in revenue over the last three months of 2020, up from nearly $300 million over the same period in 2019. When compared with its rivals in the food delivery sector, the company is shaping up to be the high-profile victor throughout the pandemic. Back in Jan. 2020, Doordash’s U.S. market share stood at 53%, up from 35% a year earlier.

 

However, the rapid growth also came with a larger-than-expected loss of $312 million. And in the coming months, the company said it expects its financial results to be hit by various regulations around the country. One of which is a measure in California supported by the food delivery company that gives workers some additional benefits.

 

So what will happen to delivery services when the pandemic gets somewhat under control? DoorDash, which started off delivering takeout from restaurants but has since branched out into grocery and convenience-store delivery, could see a drop in business when most restaurants reopen for in-person dining.

 

The company said its outlook factors in widespread availability of the COVID-19 vaccine that would lead to a return to in-person dining. “In our experience, consumer behavior tends to be sticky,” said DoorDash Chief Financial Officer Prabir Adarkar during the earnings call cited by Market Watch. “New habits get formed. We believe it will persist over the long run.”

 

For 2021, DoorDash said it expects GOV of $30 billion to $33 billion. Adarkar said that while the company is passing off some Prop. 22 costs, it is absorbing the majority of them.

 

Another issue that the company is facing are commission caps that have been implemented in dozens of cities DoorDash operates in. As restaurants have struggled because of the pandemic, officials have lowered the commissions DoorDash and other apps can charge them for delivery. Adarkar said it is his understanding those are emergency measures, and he expects those caps to go away once in-person dining resumes.

 

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