Abstract

The case discusses the strategies that propelled US based online food delivery platform DoorDash to success and the challenges that lay ahead for it as it scaled its operations in the highly competitive on-demand US food delivery market. The company, with its platform business model and gig economy perspective, had disrupted the traditional food delivery industry. It connected restaurants, customers, and gig workers (Dashers) through a tech-driven delivery ecosystem. DoorDash earned revenue via delivery fees, restaurant commissions, advertising, and subscriptions like DashPass. Its success stemmed from targeting underserved suburban markets, leveraging advanced logistics and AI tools for efficient delivery, forming key partnerships, and maintaining strong customer retention through convenience and personalization. With a market share of 67% as of 2024, DoorDash had emerged as the largest food delivery platform in the US, outpacing competitors such as UberEats and Grubhub. Going forward, some key challenges lay ahead for Tony Xu, CEO of DoorDash, as the company transitioned from hyper growth to sustainable profitability. One of its biggest challenges would be to balance rapid expansion, especially into non-restaurant verticals and international markets, with the need to improve margins and achieve consistent profitability. Moreover, competition from deep pocketed rivals such as UberEats, Amazon, and Walmart and concerns over regulatory scrutiny and evolving consumer expectations were threatening DoorDash’s market position.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Analyze the business model of an on-demand food delivery platform.
• Examine the operational dynamics of a platform-based business model and how it differs from that of a traditional restaurant.
• Evaluate DoorDash’s growth strategies in the highly competitive US food delivery market.
• Identify the challenges faced by an on-demand food delivery platform and explore strategies to overcome them and ensure future growth.

Keywords

Online Food Delivery; doordash; on-demand food delivery platform; business model; dashers; operating model; growth strategy; gig economy