Tony Xu, co-founder and CEO of DoorDash, discusses driver demographics and how Dasher supply differs from ride-hailing services.
Insight
Xu: Suburban delivery economics beat cities due to family basket sizes
“Where in the places outside of city centers, the suburbs, you tended to have a greater percentage of families, which have more mouths to feed. As a result, you tended to have higher baskets. Higher baskets meant larger revenues. You also tended to have easier …”
Assertion Supported
Xu: DoorDash spent millions on pandemic ads promoting competitor platforms
“One was running a national TV campaign where we spent millions of dollars advertising on behalf of the industry, basically saying whether you order on us or any of our peers, just order.”
Assertion Supported
Xu: Cutting pandemic merchant commissions in half cost DoorDash over $100M
“And the other decision, which we were the only platform to do, we cut our commissions by half, which cost us over a hundred million dollars.”
Assertion Not checkable as stated
Xu: Only 1 of 40 UberX drivers took a raise to switch
“One of the earliest tests we ran was we recruited two groups of drivers. Roughly speaking, 20 drivers who drove for UberX at the time and 20 who deliver for DoorDash. The control, if you will, variable was that they both earned 20 dollars. An hour, each group.…”
Assertion Partly supported
Xu: Incumbents only served 20,000 US restaurants with existing delivery fleets
“There were 20,000 maybe restaurants offering delivery at the time, and that's who Incumbents would work with, you know, the Grubhubs or the Seamlesses. They would partner with these restaurants that had their own delivery fleet, and they would, you know, just …”
Assertion Not checkable as stated
Xu: DoorDash received hundreds of investor rejections between 2016 and 2018
“And there were a couple, there were a few years actually in a row, three years in a row, 2016, 1718, where I continued to struggle to raise capital. And I think this was the part that was quite difficult for us, where you have a company whose product seems to …”