The delivery story is far more complex than a few strong players battling to bring you dinner. It's about customer loyalty and retention and, for the companies involved, becoming an indispensable part of daily life.
— Kristen Hawley
Amid competition among third-party delivery, companies are expanding their offerings in ways that indicate where the industry is heading.
A challenging labor market and rumblings of delivery driver shortages in an overtaxed gig economy has led companies commonly lumped into the “delivery” category to broaden their scopes. DoorDash is the latest, announcing two new options: in-store pickup and a monthly unlimited subscription plan, available to customers today.
DoorDash chief operating officer Christopher Payne told Skift Table that the new option is a response to demand from both diners, who want the added convenience of no-fee, in-person pickup, and restaurant partners who can benefit from accepting orders and processing payment through DoorDash’s system.
“This is another example of where our mission is to really build services that help empower local economies. We started with delivery and now we’re building on that and driving even more business to local restaurants in the form of takeout,” he said.
DoorDash competitor Grubhub also offers pickup via its ordering channels. On the company’s most recent earnings call, Grubhub CEO Matt Maloney said that pickup currently is in the mid to high single digits of our overall transactions, but represent a “huge opportunity.”
Grubhub recently acquired restaurant technology company LevelUp, which focuses on diner loyalty, but will likely use LevelUp’s efforts to add to its own pickup business. “All of LevelUp’s orders are pickup,” said Maloney. “If you think about how the features of LevelUp can potentially grow Grubhub’s platform, the fact that they’re 100,000 or so pickup transactions a day is really interesting. We’re going to work really hard to figure out how to take advantage of the pickup and push that throughout our platform.”
DoorDash also unveiled a new subscription program called DashPass. For $9.99 per month (billed monthly with no minimum time commitment required), customers can enjoy unlimited delivery of orders over $15 from participating restaurants. Restaurants must opt in to the program, which launches with partners like The Cheesecake Factory, White Castle, and Jack in the Box.
“This is very much the beginning of a loyalty program at DoorDash,” said Payne. Like pickup, Payne says both diners and restaurants stand to benefit from the new feature.
“We are seeing that this is a great way to get DoorDash to become a daily habit for our top customers,” said Payne. “Restaurants and those partners that are a part of DashPass are going to get the benefit of the growth and the habituation that comes with that subscription.”
The company currently operates in over 1,000 U.S. cities and Canada. Earlier this year, the company announced a $535 million round of Series D funding leading to a $1.4 billion valuation.