DoorDash’s latest TV spot shows a family relaxing in their San Francisco Victorian home when they are suddenly alerted that dinner has arrived. As a micro sized red car pulls up, dad jumps out of his chair, daughter pushes over her toy tea set and Rover makes a beeline for the door. Mom answers the doorbell where she is greeted by a smiling “Dasher” who hands her the food. Dad and daughter are hanging out the window grinning as if they had won the Publishers Clearing House prize. Yes, it’s DoorDash, and the spot ends with the slogan, “Get ready to get the door.”
The finely crafted 30-second ad may inspire customers to download the DoorDash app and order up their Sunday supper. However, the company’s recent announcements indicate restaurant-to-home-delivery is only a small part of its vision. In Dec. 2016, the company launched DoorDash Drive, a service in which a restaurant can place the delivery order and indicate its destination. Drive is part of what company executives say is a point of competitive differentiation—a focus on the backend/infrastructure.
“With DoorDash Drive, we’re building the first logistics layer for restaurants, to solve deliveries that may or may not originate on the DoorDash marketplace,” DoorDash cofounder and CEO Tony Xu said in a recent interview with Fast Company. “A lot of times, an off-premise order, whether it’s takeout or delivery, doesn’t necessarily happen through an app. It happens over the telephone or in person. A merchant may want to fulfill those deliveries, and so why can’t there be a way for them to do that?”
Amazon’s Prime Now restaurant delivery is poised to provide major competition to DoorDash as an infrastructure provider. Already one of the world’s largest backend providers with AWS, Prime Now offers restaurants a merchant app which can accept, cancel or refund orders. No doubt, that’s the tip of the iceberg for what Amazon can provide its clients.
As a straight-up restaurant delivery company, DoorDash is much smaller than GrubHub with far less financial resources. In fact, DoorDash’s most recent investment round in 2016 dropped its valuation to $700 million, with share prices dropping 16% between its second and third fundraising campaign. The focus on money is crucial for a company intent on earning its reputation by building a comprehensive infrastructure to handle restaurant delivery logistics. DoorDash’s theory is that if an eatery can use its Dashers to handle inbound and outbound orders, the establishment can expand its catering business.
DoorDash Drive product manager Abhay Sukumaran says his company’s aim is to build a “programmatically accessible logistics network” that becomes a platform for its customers to add its own personalization such as linking it to a CRM system. “The goal is that this infrastructure becomes something that you can build other things on top of,” he told Fast Company.
Taking on delivery for restaurants and caterers could be a good market niche for DoorDash, but it will not be without its challenges. For example, a delivery person handling a large order on behalf of a food client becomes more of a representative of the establishment. While a restaurant can set rules for its own drivers regarding appearance and customer interactions, working with virtual delivery agents cuts out such important controls.
But there are delivery agents DoorDash can control—the robotic kind. U.K.-based Starship Technologies is working with DoorDash in Redwood City, CA to test a small number of its remote-controlled robots as surrogates for humans for short-distance food delivery.
DoorDash is by no means leaving its food delivery roots behind. They already operate in 300 cities in the U.S. and the company is adding liquor delivery and small-item grocery delivery from Whole Foods to its roster. That seems like a lot of the company’s plate as it tries to ride its infrastructure vision to either an IPO or big-ticket takeover.