The number of DashPass customers is unknown but growing

The majority of DoorDash’s business comes from restaurants, but it has been expanding to other categories such as groceries and convenience stores. It also is rolling out new services such as building websites for restaurants or providing custom delivery services for orders placed on a restaurant’s own website. These offerings will become “more critical” post-Covid, DoorDash CEO Tony Xu said on the earnings call.

The company has not disclosed the number of DashPass customers, who pay a subscription fee to receive free delivery per order. But subscribers, who tend to be more loyal customers, made up a larger share of total orders in the fourth quarter than in the past couple of quarters, the company said.

DoorDash became the biggest US food-delivery service in part by focusing early on capturing suburban markets, where delivery orders tend to be larger than in big cities. But, like other food delivery companies, DoorDash remains unprofitable.

Food delivery fees, Prop 22

While food delivery has been a lifeline for restaurants, many have been struggling with the high fees—even big chains like McDonald’s have indicated prices are too high. In response, cities from San Francisco to Jersey City have capped the fees to help small businesses.

But in California, a potentially major earnings pressure for DoorDash disappeared with the passing of Proposition 22 in November. The ballot measure exempts gig companies like DoorDash, Uber, Lyft, and Instacart from having to offer costly employee benefits like paid leave and minimum wage to gig workers in California. But the companies did agree to start offering a limited benefits package to drivers. In regards to whether Prop 22 fees are being passed onto customers, DoorDash CFO Prabir Adarkar told investors that DoorDash is “absorbing most of the costs.”

There’s still a lot of room for growth for food delivery globally. In October, Uber’s CEO noted that just 10% of Japan’s restaurants are on the Uber Eats platform. Xu said a long-term goal of DoorDash, which operates in Canada and Australia, is to become a “global company.”

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