Jon Feldman Ex-Uber | Angel InvestorEx-Uber | Angel Investor
Counter-narrative: Uber started 1-2 years later than Doordash in food delivery, but still built a larger and more profitable total global business.
2023 Q4 Revenue:
Doordash: $2.3B
Uber Delivery: $3.1B
2023 Q4 Adjusted EBITDA:
Doordash: $363M
Uber Delivery: $476M
(Additionally: Uber sold its India, SEA and Russia businesses for stakes in domestic competitors, and still holds 14% of Grab today)
How? The chart you shared reflects the US 🇺🇸 market during a short time window so it doesn’t tell the complete story about deliberate strategic decisions and resulting trade-offs between Uber Eats and Doordash. Uber launched Eats in Dec, 2015, in Canada 🇨🇦, and within 2 years had launched in nearly 60 countries 🌎 🌏 🌍 – virtually everywhere we had a rides footprint. Doordash, meanwhile, focused mainly on the US, and organically launched only in Canada and Australia, where it struggled in both.
So, Uber’s deliberate strategy to horizontally grow globally led to some very specific trade-offs with respect to resource allocation, product design, etc. For example, while Doordash could design its app for the US consumer only, Uber had to build it as platform that could work equally well from Tokyo 🇯🇵 to Mumbai 🇮🇳 to São Paulo 🇧🇷 to Paris 🇫🇷 — this transcended dozens of languages, currency and tax systems, courier onboarding and background checks, different cultural and competitive norms (eg, tipping, restaurant-employed couriers, bikes and mopeds, etc), hundreds of unique regulators, etc. All this while $10B+ of venture capital was poured into a dozen at-scale global competitors💰💰, Doordash being only one of them, receiving nearly $1B from SoftBank in 2018 (while also skimming a half-billion from its own couriers with its tipping sleight of hand).
Uber leveraged its global reach and brand to sign the most monumental single deal in global food delivery: McDonald’s 🍔 🍟. This rapidly became 30-50% of volume in many Uber Eats markets and set off an arms race in chains moving into delivery.
In this landscape, the Uber team definitely made mistakes in the US that gave DoorDash the domestic advantage: Not listing restaurants without a partnership (we were overly afraid of bad PR in the wake of 2017 #DeleteUber), not focusing quickly enough on the suburbs, where Doordash had its roots, overly relying on MCD as a chain partner while DD signed a broader diversity of large fast casual and QSR chains, centralizing our GMs Ops & Sales teams too quickly, and not flexing our restaurant vs consumer pricing economics as nimbly as DD did, incl. being late into subscriptions. All that said, this must be seen in the context of a global business that quickly did win a sustained #1 and highly profitable position in large markets as diverse as ANZ 🇦🇺, France 🇫🇷, Japan 🇯🇵, Mexico 🇲🇽, and Canada 🇨🇦 , as well as within the US across 3/5 of the top metro submarkets (NYC, LA & Miami), in a business that thrives on local network effects.
The business school version of how Doordash gained market share so rapidly is through clever strategy: targeting the suburbs where others weren’t operating, acquiring untapped supply. That is not wrong, but it is also not all (or even most) of the real story.
The actual story is that the team executed relentlessly. They made deliveries just a little faster and more reliable every week. They scrutinized the quality of every one of their restaurants and dashers. They optimized cost out of the system and gave it back to customers in the form of Dashpass (which launched in 2018 at the start of this chart).
Over time, there was just better selection and faster, cheaper, more reliable delivery on Doordash, and consumers stuck.
Virtually every startup is like this. There is a neat version of the strategy that fits into a 5-minute case study. But get under the hood and you’ll realize that a lot of success is just showing up with grit and attention to detail every day.
