Dive Brief:
- DoorDash delivered 574 million total orders in the fourth quarter of 2023, an increase of 23% over the previous year, the company reported Thursday.
- The company saw revenues increase 27% year over year in the fourth quarter, to $2.3 billion, on a net loss of $156 million, down from a $642 million loss in the same period in 2022.
- “Solid execution” in selection, quality, affordability and service in the company’s core U.S. restaurant marketplace “helped us attract new consumers, drive further increases in average order frequency, and drive order growth that was largely consistent with 2022,” DoorDash said in its Feb. 15 shareholder letter.
Dive Insight:
The U.S. food delivery market grew to $29.1 billion in 2023, according to the International Market Analysis Research and Consulting Group. DoorDash commands 66% of the U.S. food delivery market, according to Bloomberg Second Measure. Other major market participants include Uber Eats, Grubhub and Instacart, which announced 250 employee layoffs Wednesday as part of a management restructuring. Imarc forecasts the U.S. food delivery market to reach $68.6 billion by 2032, more than doubling last year’s market size.
DoorDash said in its shareholder letter that “improvements to its product” helped drive double-digit growth in monthly active users and growth in average order frequency, which helped the company grow total 2023 restaurant orders in the U.S. at a similar rate as the prior year.
In addition to offering food delivery, DoorDash offers delivery service for more than 150,000 local non-restaurant merchants in categories such as groceries, flowers and pet supplies. In December, the company had over 20% of customers ordering in the non-restaurant category for the first time, DoorDash co-founder, CEO and Chair Tony Xu said on the Thursday earnings call.
But Xu acknowledged that grocery’s penetration of e-commerce is “amongst the lowest, if not the lowest, across all categories of e-commerce,” citing inventory and affordability issues. However, Chief Financial Officer Ravi Inukonda said on the call, “I have no doubt in my mind that all parts of our new vertical business are going to be profitable over time.”
The growth in delivery services, spurred by the pandemic, has created issues for delivery workers and cities. In New York City and elsewhere, workers have complained of low wages, working conditions and worker safety issues. But DoorDash said in its shareholder letter that a record number of delivery workers chose to work for the company in the U.S. in 2023, “precisely because it is different from structured labor.” A survey of the company’s delivery workers in the 2023 fourth quarter found that 82% said they had other sources of income or responsibilities or were retired, and about nine out of 10 spent less than 10 hours a week making deliveries.
