Grubhub still leads the third-party food delivery market in terms of sales, and of late, Postmates and Uber Eats have gotten a lot of attention for their respective pre- and post-IPO news. But DoorDash may well be the most important company to watch in the escalating showdown for third-party delivery dominance, according to new data from tech company Second Measure.
Second Measure analyzes anonymized credit card transactions and uses that data to shed light on customer behaviors. In the world of third-party delivery, those behaviors underscore the rapid growth DoorDash has undergone recently, growth that has the company almost on equal footing with Grubhub in terms of monthly sales. Grubhub leads the market, with 32 percent of total monthly sales. But the company’s growth is now slower than its competitors, as evidenced in the following graph:
Source: Second Measure
DoorDash, meanwhile, holds 30 percent of the market in terms of monthly sales, and unlike Grubhub, it’s still growing rapidly. In February 2019, DoorDash closed a $400,000 million round and had a valuation of $7.1 billion. Besides investors, Second Measure notes in its report that DoorDash saw “a staggering 216-percent year-over-year jump [in sales], compared to 58 percent at Uber Eats and 4 percent at Grubhub.”
Part of those rising sales numbers are no doubt due to DoorDash’s aggressive push across the country. The service is the only third-party delivery service right now to be in all 50 U.S. states, in case you couldn’t tell from the endless numbers of promotions and partnerships the company does with everyone from Canter’s Deli in LA to Taco Bell to the Wyndham Hotels chain. The service is also now in 50 Canadian cities.
Impressive as the numbers are, no one’s place in the third-party delivery market seems certain because the space changes so rapidly — something that will continue for the rest of 2019 and beyond. DoorDash will have to work hard at retaining its customers if it wants to keep up. And as Second Measure and others have noted, loyalty to any one service isn’t something third-party delivery customers prioritize. For example, in the first quarter of 2017, 88 percent of Grubhub’s customers didn’t use another service; two years later, that number has dropped to 62 percent.
Unless, that is, you’re in the south. It seems of all the third-party delivery services out there, Waitr, who’s business is more focused on second-tier U.S. cities, has the highest number of loyal customers on the list. Waitr (who recently acquired Bite Squad) doesn’t (yet) have the reach or growth rate of DoorDash, but focusing on customer loyalty in cities that aren’t New York, LA, or other major metropolises could eventually be hugely advantageous. DoorDash should take note.
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