Marketplace Logo Donate

Daily business news and economic stories from Marketplace

Who will win the delivery app war?

Heard on:
A DoorDash sticker

Food and grocery delivery are just the start for apps like DoorDash and GrubHub. Michael M. Santiago/Getty Images

get the podcast

There are many delivery apps: DoorDash, Grubhub, Uber Eats, Seamless, Postmates, ChowNow, EatStreet,, Caviar. And Tom White, an internet company analyst at D.A. Davidson & Co., doesn’t think all of them will survive.

“You’re likely to see two big players that kinda dominate and use their scale to block out smaller upstarts,” he said.

Takeout has exploded during the pandemic. But demand for food delivery is probably going to shrink as more people start eating in restaurants again. So delivery companies are trying to find their way as consumer habits change. Case in point: DoorDash is going to deliver at-home COVID tests in select cities, a big shift away from restaurant food deliveries, its core service.

Last month, DoorDash accounted for 55% of meal delivery sales, according to data from Second Measure. Scaling up could help solidify its leadership. Because at the moment, “consumer loyalty is not very strong, so I don’t care if it comes through DoorDash or Uber Eats,” said Sunil Gupta, a professor of business administration at Harvard Business School.

How do you make consumers care? Maybe you become the go-to for everything: tacos, Tylenol and COVID tests. That could help lock customers into unlimited delivery subscriptions. The deal offered by Postmates, for instance, costs $99 a year.

“Think of them as becoming another version of mini-Amazon,” Gupta said. “Now these players can become the last-mile delivery options.”

And there’s another big reason these companies are looking beyond food.

“I haven’t become aware of anyone actually making money delivering food,” said David Portalatin, a food and beverage analyst at the NPD Group.

Restaurant and even grocery deliveries run on supertight profit margins. But a COVID-19 test that will cost you $100 or so? That might leave DoorDash with a little more wiggle room.

What's Next

Latest Episodes From Our Shows

Jul 1, 2022
Jul 1, 2022
Jul 1, 2022
Jul 1, 2022
Jul 1, 2022
Jun 30, 2022
Jun 28, 2022
Exit mobile version