If you have used DoorDash before, you may have been impressed with the app’s easy-to-use layout and (relatively) low prices. This naturally makes one wonder about the service’s operations – just how is DoorDash able to continuously stay on top of the market? To answer this, let’s try and break down each moving part of DoorDash, starting with the most basic question of all.
What is DoorDash?
DoorDash works as the middleman between restaurants and customers, providing a food delivery service that works on-demand. Restaurants supply DoorDash with their menu and prices which the service then displays to hundreds of customers through their app. Users can place orders for meals online which are then delivered to their home by dedicated delivery personnel, or dashers. Payment can be made through either cash on delivery or online transfer with several micro-finance solutions, and the whole exchange takes place on the DoorDash app securely.
How does DoorDash work?
The DoorDash model operates with the help of three different subgroups: customers, restaurants, and dashers. Each performs their role independently, with DoorDash acting as nothing more than a bridge providing logistics between them. You can think of the way these groups interact as a cycle:
How can I use Doordash?
Let’s see how each individual subgroup can use and take advantage of DoorDash to its fullest.
As a customer
Anyone can use the DoorDash app to order their choice of meal without hassle. You can follow the steps below to place your first order on the app and become a regular customer of the service.
As a merchant
If you’re a restaurant or convenience store owner looking to increase visibility of your establishment, the DoorDash app may be able to help. Following are the required steps to secure a place on the app’s list of partnered eateries.
As a dasher
A dasher is someone who works to deliver orders placed through the DoorDash food delivery app. Anyone can sign up to be a dasher, with payment being based on the number of orders delivered successfully across the total distance. To start earning in your free time as a DoorDash dasher, you can follow the steps below:
How Does DoorDash make money?
One of the unique characteristics of DoorDash is that its delivery fees are low, oftentimes being none at all. The prices of food listed by restaurants on the app are also identical to what the cost may be in-store, and free signup means that customers are not paying a cent more to use the app for their food delivery. All of this may force a bystander to believe that DoorDash is operating without taking any profit at all. There are a few ways DoorDash is able to keep their business up and running year-round.
Commissions
Restaurants and convenience stores who receive orders generated through DoorDash are required to give away 15-30% of their earnings as commission to the service. This amount depends on the pricing plan currently being used by the merchant and is a flat rate on every order. For pickups, the commission rate charged is 6% on every order.
Delivery and Service Fees
DoorDash charges a nominal delivery fee as well as an occasional service fee on each order made through the app. Dashers that made the delivery are paid a base pay (usually around $6) which is extracted from this amount. Whatever is left afterwards goes to DoorDash, becoming a portion of their overall earnings.
Subscription Services
There are a few subscription services DoorDash offers its customers: DashPass provides customers with in-app benefits like zero delivery and service fee for all orders over $12. To avail this, customers must pay a flat monthly fee of $9.99. This is ideal for those who regularly order food as it can help them save a lot of money in the long-run. (DoorDash) Drive is another service offered by DoorDash particularly for businesses who require access to more delivery personnel. This can be utilized by restaurants who may not be able to keep up with a heavy influx of orders with their own delivery team but do not want to miss out on taking an order.
Advertising
Recently, DoorDash launched new advertising solutions for its merchants which allowed them to place ads and banners throughout the app to boost visibility. These Sponsored Listings can be shown to a custom audience with a fixed amount being charged every time a customer places an order through the listing.
Final Thoughts
At its core, DoorDash is a logistics company with a keen eye for providing value to its clients. Whether you are a potential customer, merchant, or interested in a quick buck, you can stand to benefit from DoorDash in one way or another. Perhaps this is what makes the business as successful as it is, with new solutions being developed as the need arises.
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