If you are here you must be curious to understand how Doordash works? In this piece, I am going to share the complete story behind the birth of the most popular on-demand food delivery brand, Doordash.
So, Let’s Begin!
Before digging into the business model of this successful on-demand food delivery app let’s just get to understand what Doordash exactly is? For those who aren’t aware of it, DoorDash is one of the most popular On Demand Logistics Based Companies in San Francisco. Other apps such as Zomato, Postmates, etc., this business also runs on similar principles.
It was founded in 2013 and is designed to benefit both users, riders, and restaurants. Now that you have the basic idea behind Doordash, let’s jump to the serious parts now.
DoorDash’s journey began with keeping the students at Stanford well-fed and now as per the latest stats revealed it has managed to grow into the brand that is worth around $1.4 Billion. Exciting, isn’t it? This San Francisco based company has won over the hearts of millions of clients they have served and are still winning over the hearts of many.
All It Takes Is An Idea To Be Successful In App Business!
Founders – Tony Xu, Evan Charles Moore, Andy Fang, and Stanley Tang
CEO of DoorDash – Tony Xu
The Net Worth of DoorDash – $7.1 Billion
Total Funding Raised So Far – $1.4 billion
Type of Business – Private Company
Over the course of several years, DoorDash has managed to raise around $700 Million from several sources. This journey began when they raised the seed funding in March 2013 followed by $2.4 million Angel money raised in September 2013. It was in May 2014 when another joyous success of raising $17.3 Million Series A funding added into the history of DoorDash.
It was a year later when in March 2015 DoorDash raised $40 million series B funding followed by $127 million series C funding they raised the next year in March 2016. Their journey became more exciting next year when they raised $535 million in March 2018.
2018 was a day when they outraced Uber Eats and became the second on the US food delivery sale list.
In February 2019, DoorDash raised $400 million bringing the total funding number to $1.4 billion spiking the total valuation of $7.1billion.
Their journey has been quite an inspiring one for the people who are seeking their future in the mobile app department. Despite all the ups and downs of their company, they have become the leading on-demand food delivery apps in the US.
Whenever one takes a stand on starting something, they figure out what they could introduce that would make them stand out in the industry. This is what DoorDash has managed to introduce in its business model, Uniqueness. What are these features that have made this happen?
Let’s see –
There are many apps like DoorDash working in the USA. One of the strongest competitors of DoorDash is Postmates. Learn how these two are different and yet similar in the article – How does Postmates work?
Moving ahead, let’s get to the part where we will discuss the features of DoorDash to understand how does Doordash works?
There are 5 unique features that DoorDash has introduced in its app. These are the features that were pioneered by DoorDash and now are copied by several other apps all around the world. So, calm your curiosity by reading ahead.
It was DoorDash app that introduced this feature for the first time. This feature made the entire process of ordering food very easy for the customers. This is the feature that enables the top menu option in the app showing the top list of food items that are ordered by the customers via the restaurant.
Now, everyone is aware of the rating concept in a food delivery app but what DoorDash has introduced is a bit different. The app allows the user to rate twice. Once for the food and delivery quality and the other is to the Dasher delivering the food. This feature is also picked up by several other brands of this industry.
Yes! The DoorDash app can also suggest food items for you. How? Well! Using Artificial Intelligence. In this app, the user can see the list of suggested food items as per the ratings and ordering frequency of the items by all the customers. Smart, right?
With the DoorDash app, you can also schedule the delivery even a week in advance. Amazing right? You can plan a menu for the week and schedule the food deliveries using Doordash.
This app also allows the user to track the order. Not only this, but they also share the regular update one where your order has reached through texting on your device.
Enough of praising the DoorDash app! Now, let’s dive into the business model of DoorDash. The reason why you are here.
Like Doordash there are many logistics based food delivery apps in the market that work on a similar business model. However, there are several nooks and corners in each of the models that make every single one of it different. With on-demand food service idea picking up, there are many entrepreneurs that are looking over to initiate a brand of their own.
For all those people, this is the section that is going to prove really helpful. In this section, you will find out how businesses like DoorDash work and what exactly will it take for you to start a similar business.
The basic idea behind the apps like DoorDash is to make it feasible for the users to select the food items and wait until it is delivered at your doorsteps. So, clearly this is the first part of understanding how DoorDash works? This is the step where the user selects the restaurant they want to order from and select the items on the menu that they want to be delivered.
This is the process in which the features like search, suggestions, nearby restaurants are introduced in the app.
Once the order is selected the user then is directed to the payment gateway. This is the step in which the user has to pay the amount that will be displayed at their screen using the options available. In the case of Door Dash, these options include Fast Pay, Direct card payments, and Bank transfers.
Next comes the part after the order is accepted by the restaurant. This is an in-built software that is used by the Dashers “(drivers) that allows them to accept the orders whenever they have downtime. In this DoorDash business model, the users are provided with the feature to track the order they have placed along with the estimate on the delivery time.
Now, this is the part that is for drivers in the case of the DoorDash app for Dashers. This is where the users are provided with an option to tip the Dasher (not compulsory). Also, the entire tip offered by Dasher is credited to the Dashers.
DoorDash food delivery app operated on the Y structure. Basically, they have the model that focuses on the three major segments of the business while keeping all three on the same page.
How? Well! We are going to discuss this below.
The three segments that we are talking about here are – For Users, For Restaurants, and For Dashers.
Features Provided At User End – Browing through restaurants, Selecting the order, Suggestion, Top List, Payment, Tracking and Rating.
Now, coming to the driver’s end. These are the provisions that this Y business model provides to the Dashers working with them.
Features At Dasher’s End – Order Accepting features
Now, although if you are here reading about the business model of DoorDash you might have a certain idea of how the apps like Doordash make money. Here, we are going to share the secret behind the $7.1 billion worth company, Doordash. There is no doubt the on-demand businesses are dominating the economy right now and also their future seems to be quite bright. Before jumping into earnings, let us get to the part where we talk about what are the expenditures behind running an app like DoorDash.
Apart from the cost of app development, the expenditure list also includes the maintenance cost, sales cost, staff and Dashers’ salaries, and expenditure lined behind the formation of a company.
Still, this business is one of the best options. Why? Simply because of the profits.
There are multiple sources of income in this model, hence, it is secure. Let’s discuss what sources?
The commission is the major source of income for DoorDash. Being a great medium between the restaurant and the user, the DoorDash has become one of the popular apps for food delivery. When a customer orders the food from any of the restaurants, the restaurant has to pay a 20% commission to the app.
As per the model on which Door dash operates, every time a User orders the food, additional charges of delivery are added to the cost. In this model, the amount to be charged is decided at the time of payment. A factor that is considered while calculating the amount is the distance between the pick-up and delivery point. Usually, these charges vary between $5 – $8.
Another source of income for the app like DoorDash includes advertisements. Any restaurant that wishes to promote itself over the app is provided with the option to be featured in one of the top places. Of course, this is a paid option that is available for every restaurant.
In short, there are multiple earning sources in this business model. The decision of jumping into the on-demand food delivery business seems like a great option after looking at the complete process, doesn’t it?
So, if you are planning to create an app like Doordash and still have any queries that are not answered in this piece. Feel free to Contact the Experts.
That is all for now, we hope that the article proved helpful to you and you found the answer to the questions you had in mind.