Xu: Suburban delivery economics beat cities due to family basket sizes
Tony Xu · DoorDash CEO: Customer Obsession, Surviving Startup Death & Creating A New Market · Y Combinator · Mar 26, 2025 · at 19:23
DoorDash co-founder and CEO Tony Xu explains to Garry Tan why suburban delivery economics proved superior to dense urban markets during DoorDash's expansion.
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“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 ways to find parking. You tended to have a greater percentage of single family homes, which made it easier to, you know, deliver. Whereas you can imagine, you contrast that by going into a high rise building in downtown Manhattan or something like this, and that would be a much more complicated delivery. When we studied it, you know, line by line by line, actually the union economics were much stronger outside of the city centers.”
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