How Standford students’ on-demand food delivery app DoorDash got $600 million funding and becomes 3rd most popular food delivery app in the USA

People always have a wolf in their belly. Whenever they get hungry, they prefer to order food from the nearest restaurant. But before the system went online, ordering the food and getting the on-time delivery was not a cake walk. Even for restaurant owners, business opportunities were limited.

However, the advent of food delivery apps has changed the way people satisfy their craving for food. Food delivery apps bring diverse cuisines on the fingertips of the users. User can now order their favourite meals by just doing a few clicks on his mobile.

Thanks to on-demand food delivery apps and cutting-edge new technologies restaurants hit the jackpot. Since their online visibility has increased to the next level, restaurant owners manage to earn well. In fact, they start earning more through delivery services than the dining services. So with the fewer resources, they are earning good money.

In this blog, we will study one of the fastest growing on-demand food delivery apps and its ambition to change the food industry. We will also understand how you can build the IT infrastructure of the on-demand food delivery business and what resources you need to develop an app like DoorDash.

What is the big deal with DoorDash? How it manages to grow by 280% year-on-year?

 
In 2013, four Standford students have started DoorDash. DoorDash uses logistics services to offer food delivery from the restaurants to the doorstep of the customers. Initially, DoorDash was providing its service in only one town in the USA which is Palo Alto. But currently, DoorDash food delivery service is available across 600 cities of USA and Canada.

From the top investors like Charles River Ventures, SV Angel, Khosla Ventures and Softbank, DoorDash has raised more than $700 million in its several funding rounds. Recently, DoorDash has closed its series G funding round with more $600 million. After this funding round, it is valued $12.6 Billion.

According to the data of the Similarweb, DoorDash is 3rd most popular food delivery app in the USA.

While in Canada, DoorDash ranks 6th in the category of top food delivery apps.

Doordash’s expansion: ( Updated on 5th Aug 2019)

 
Recently, DoorDash made an agreement with Square to buy the on-demand food delivery business, Caviar. They have agreed to pay $410 million for it.

Caviar is the simplest way for its customers and businesses to order their food from their favorite restaurants. The customers are allowed to live-track the order on a map. They can easily browse a picture menu, place the order and get it delivered at their place within 1 hour. Caviar offers the restaurants a delivery solution free of any infrastructure, logistical, or operational costs.

Square acquired Caviar five years ago. They had a deal worth about $90 million. Caviar had been under fire for a long time. They were unable to pay their delivery workers properly. DoorDash is certainly doing it right by stating it will no longer subsidize wages with tips, though, that has not gone into effect as of now.

The announcement is yet another important step in moving forward on the mission for DoorDash to empower local economies. The CEO, Tony Xu stated that they have long-admired Caviar, which has a coveted brand, an outstanding portfolio of premium restaurants and commanding technology. The acquisition improves the breadth of Doordash’s merchant selection by allowing them to offer their customers with even more choice when they order through DoorDash.

While Caviar is merging with DoorDash, the leaders and employees of Caviar at Square are also supposed to join with DoorDash once the acquisition is complete. Caviar has built a reputation of trust and loyalty with its customers. Together Caviar and Doordash with their complimentary restaurant selection and tremendous logistics platform are forming a team that shares the passion and commitment to better serve the restaurants, couriers, and customers.

For Square, this deal presents the company with an opportunity to concentrate more on its products for businesses and people.They are increasing their focus and investment in the two big, developing ecosystems — one for businesses and one for individuals. Square believes that partnering with DoorDash will bring valuable and strategic opportunities for them.

DoorDash is already integrated with Square for Restaurants that streamline the acceptance of online and in-person orders for merchants. Whereas in the second quarter Cash Boost partnered with DoorDash to get them instant rewards when the customers used their Cash Card at DoorDash.

The big opponents in the on-demand food delivery industry are DoorDash/Caviar, Postmates, UberEats, and Grubhub/Seamless. In the month of May, DoorDash raised a $400 million round pricing it at $12.6 billion. Postmates, a prime competitor of DoorDash’s, is currently worth $1.85 billion and is secretly filed to go public earlier this year.

Even before the takeover, DoorDash has been attaining ground on the biggest food delivery officials. According to an analytics company Second Measure, a lot of people used DoorDash than any other food delivery company in the last month. DoorDash earned 34% of all U.S. meal delivery sales. GrubHub, which owns Eat24 and Seamless, saw 33% of sales. UberEats had 17% and Postmates had 11% are not too far from the sales chart.

» Customer segment of the DoorDash

DoorDash connects the restaurants to users who want to order the foods. Delivery drivers are also a very important part of business operations. By doing customer segmentation, DoorDash gets the idea of its major stakeholders and can target only those to get a good business result.

Let’s understand the customer segmentation of the DoorDash clone app in detail.

 
» User:

• People who don’t have kitchen facilities.
• People who hate cooking.
• Business people who wish to do a quick lunch while not affecting their work routine.
• People who love to eat but have no time to go out.

» Restaurants:

• Restaurants which don’t have own delivery services
• Restaurants with the limited seating space
• Restaurants which want online visibility
• Restaurants which are following cloud kitchen model

» Delivery drivers:

• People who want to do a delivery job with flexible timing
• International students who are looking for a part-time job

Strategies of DoorDash to be the only choice of users, restaurants and delivery drivers

Team of DoorDash has precisely crafted its value proposition model. They put equal emphasis on all major three stakeholders. They make sure that users, restaurant owners, and delivery drivers satisfy their financial goals with the DoorDash app. Let’s see what best services DoorDash is providing to its stakeholders.

» For Users

• With good pricing and outstanding efficiency, DoorDash provides an excellent experience to the users.
• They let customers track the orders in real time.
• Users can anytime raise a question to the customer service team of DoorDash
• ‘Click and choose’ option to order quickly.

For restaurant owners

• They are not responsible for delivery of the food
• DoorDash provides them the more customer base.
• Using DoorDash’s delivery service is easy and cheap.
• Lets small restaurant owners work on a large platform.

For Drivers

• Delivery drivers can make $6 to $12 per delivery.
• They can work on their time.

What DoorDash is planning for the future?

 
DoorDash always seems thrilled to utilize different technologies to streamline its business. DoorDash has already added a feature which lets anyone donate the food from the app. They are planning to work with different charity organizations of the USA to feed poor and hungry people.

DoorDash wants the next level of transparency in the business. To justify it, they are regularly updating the rating system of the restaurants. In the future, DoorDash will not only define a new transparent rating system but will only work with the restaurants which have a good rating.

DoorDash is also planning to do deliveries with automatic cars. For that, they already have tied up with General Motors.

If we sum up the last few paragraphs, we can understand the importance of the proper IT infrastructure in order to be successful in the on-demand food delivery business. A few on-demand food development companies are available in the market which are capable enough to develop a whole IT infrastructure with the different apps for users, drivers, and restaurants.

So, In the next section of this blog, let’s understand how to build a profitable IT infrastructure of the food delivery app.

How to build an IT infrastructure of the food delivery service business? Or,

Features to consider to develop an app like DoorDash or DoorDash clone app?

 
If you are planning to start on-demand food delivery service like DoorDash, it is worth to mention that you need three different apps for three different users – customers, restaurant owners, and delivery drivers. Each of them opens your app to satisfy the different purposes. Thus, they all need to be treated with different apps and with different features. However, apps of these three different users should be working parallelly to achieve maximum efficiency and accuracy.

» App for customers

A mobile app for the customer is the prior requirement. With the app, they can search the food, order the food, track the order, and pay for the order. Customer’s app is always equipped with the APIs of the payment processor and payment gateway to pay and process the payment, database fetching mechanism to show the menu details from the database and map to track the order in real time.

» App for the restaurant owners

When a customer orders the food, the restaurant gets the notification on its app. This notification includes all details of the order including the order history of the customer. A restaurant can either accept the order or decline the order. If the order is accepted, the customer receives the confirmation message. The restaurant also gets notified when the delivery driver reaches to the restaurant to pick up the order. With the mobile app of the restaurant, they can know all the details of the delivery driver including his rating. Moreover, restaurant owners can know the insight of the total orders and how much they are earning per day or per week.

» App for the delivery drivers

As soon as the restaurant confirms the order, the nearest delivery driver receives the request to pick up the order. Like the restaurant, the delivery driver can also either accept the request or decline the request.

When the delivery driver picks up the order from the restaurant, the customer receives a notification and can able to track him real time. As soon as the delivery driver delivers the order, he gets paid based on the distance he has traveled to make the delivery. In the app, he can find out the record of all deliveries and how much he has earned in one week. He can also link the bank account in the app, so food delivery service provider company can pay him in the bank directly.

We, at Coruscate, always practice on the best technologies and accommodate the best features in the on-demand food delivery app. Be have ready made on demand food delivery app solution like Zomato and Swiggy Our team of developers and designers are highly talented to build the whole IT infrastructure for the food delivery app as per your need. Our agile methodology always helps us to deliver the app before the deadline. As if this is not enough, our customizable pricing structure will avail you to save a few bucks. So, if you are looking for the on-demand food delivery app development, feel free to contact us for a free consultation.

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