DoorDash: In Search of Profitability
The chief executive officer and co-founder of DoorDash was facing various challenges. Based in San Francisco, California, DoorDash was the market leader in the US food delivery services industry. In December 2020, despite ongoing losses, the start-up launched the largest initial public offering of the year in the United States. Market observers believed that intense competition in the US food delivery services industry and DoorDash's questionable business model fundamentals would make profitability difficult to achieve. Restaurants were raising objections to food delivery platforms, seeing profits shrink due to commissions paid to the platforms. Consumers were paying at least 40 per cent more on orders made through an online delivery platform compared to self-pickup. However, during the COVID-19 pandemic, consumer demand for food delivery services increased and DoorDash reported a profit for the second quarter of 2020. DoorDash was expanding rapidly, after several rounds of funding. Could the co-founder prove critics wrong about the business fundamentals of his food delivery platform? How could he create a sustainable profit for DoorDash? Arpita Agnihotri is affiliated with Pennsylvania State University - Harrisburg. Saurabh Bhattacharya is affiliated with Newcastle University.