DoorDash (DASH) should be a single digit company

Pekelo

Pekelo

I saw the CEO yesterday on CNBC and I wonder, just how is this company different from UBER, WeWork or Group-On? The cheap service may be good for the customers but not making profits for the company.

I mean if I see it right, this is the business model: I order restaurant food for 50 bucks, and they deliver it for an extra 10 (or whatever). That 10 dollars should cover the salary of the driver, amortization of the car and the HQ of the company with hundreds (1000s) of employees. I just don't see it, I am sorry.

Oh yeah, the company lost 263 MM this quarter and the stock is down 70% from the ATH. I think in the next 2 years this will go below 20 (if not 10) easily. Currently 75ish...

Net income is nicely growing during the last 4 quarters: -101, -155, -167, -263 MM
 
Last edited:
As the revenue is growing in the sector, they will turn a profit soon enough. I don't see any decline coming in the food delivery gig economy. Can't compare with a scam like WeWork.

Pekelo said:
I mean if I see it right, this is the business model: I order restaurant food for 50 bucks, and they deliver it for an extra 10 (or whatever). That 10 dollars should cover the salary of the driver, amortization of the car and the HQ of the company with hundreds (1000s) of employees. I just don't see it, I am sorry.
More...

Exposure. By using these apps you discover eating places that you'd normally never look at. Both the custom and the restaurant pay for the delivery.

Aren't many of the deliveries by bike? Rest of the world, delivery drivers rarely use cars because it's uneconomical, it's either bicycles or small motorbikes. Perfect job for youngsters, I would have done it at one point.

Been a fan of Foodpanda (Delivery Hero) for a while but once I contacted their support I saw how chaotic the company really is, they quite literally ignore customers who have issues going beyond the basic "I got the wrong item".
 
As d08 points out, the model seem like it will work for German giant Delivery Hero. They bought the Swedish Onlinepizza/Foodora. The thing about these companies that they are natural monopolies with decent moats once they grow large enough. Anecdotally I ordered from Foodora today (as most days) - as a customer I never look for any competitors, because I don't have time to, or a need to, nor do I expect to find any competitors of comparable size. Meanwhile, local restaurants have no choice but to sign up because of the massively increased exposure.

Yeah, not exactly the best margins. Not an industry I would either like to invest in today nor would have liked to work in if I was 20 years younger. It's not a scam industry though.
 
d08 said:
it's either bicycles or small motorbikes. Perfect job for youngsters, I would have done it at one point.
More...

I didn't consider it, moped makes the most sense. I don't think a person can make more than 2 deliveries per hour and I am not sure what the profit margin is. I guess the tip helps the delivery person.

As others mentioned, there is also competition. ( GrubHub, Uber Eats, and Postmates, ) I don't think with grow they would get more economical, these type of companies seldom do. Uber is growing and still keep losing money.

This sounds like MoviePass: (huge losses, too good for the customer)

"DoorDash has launched DashPass, a subscription service that offers unlimited deliveries with no delivery fees (on orders over $15) for $9.99 per month. There are more than 1.5 million subscribers nowadays."

We will came back to this thread in every 6 months.
 
Last edited:
I read an article a year or so ago saying that in an anonymous survey ~80% of food delivery workers have admitted to “tasting” the food on the way to drop it off.

Needless to say, I pick up my own takeout orders lol.
 
Pekelo said:
I didn't consider it, moped makes the most sense. I don't think a person can make more than 2 deliveries per hour and I am not sure what the profit margin is. I guess the tip helps the delivery person.

As others mentioned, there is also competition. ( GrubHub, Uber Eats, and Postmates, ) I don't think with grow they would get more economical, these type of companies seldom do. Uber is growing and still keep losing money.

This sounds like MoviePass: (huge losses, too good for the customer)

"DoorDash has launched DashPass, a subscription service that offers unlimited deliveries with no delivery fees (on orders over $15) for $9.99 per month. There are more than 1.5 million subscribers nowadays."

We will came back to this thread in every 6 months.
More...

I was watching a guy doing deliveries in UK and the apps are now more optimised. There's sometimes multiple pickups done at once and since the distances are rather small, delivery time can be just 10-15 minutes. Tip expectation is an American thing, luckily it hasn't caught up too much elsewhere, the UK guy rarely was being tipped. Growth absolutely makes it more economical. You don't need more software engineers and devops as you scale, not in a linear fashion anyway. The only thing linear is support staff and most of these companies are lacking in this department.

Delivery Hero for example is near breakeven on margins, they're far bigger than DoorDash.
 
These apps have ruined New York City delivery by making it much more expensive with the excessive fees. I hope delivery goes back to the old way of calling the restaurant and placing your order.

The one benefit is you can order food from further away, but still, the fees are so much more than it use to cost.
 
USDJPY said:
These apps have ruined New York City delivery by making it much more expensive with the excessive fees. I hope delivery goes back to the old way of calling the restaurant and placing your order.

The one benefit is you can order food from further away, but still, the fees are so much more than it use to cost.
More...

Most still offer their in-house delivery it seems. But it's much more efficient to specialise. I assume in NYC there's a shortage of delivery people, that's the reason?

Pekelo said:
Down from 15 to below 5 bucks. As it is getting closer to profitability...
More...

Share price and profitability aren't that closely connected.
 
Huge difference between a well-liked or useful service and a good investment, assuming that "investment" means cashflow return rather than merely share price appreciation.

As a standalone enterprise, food delivery seems like a shitty low-margin business where you're constantly fighting against upstarts, and indeed the restaurants themselves. Of course like anything this co could be a buy at the right price.
 
You must log in or register to reply here.
Back
Top