A recent report by Blomberg Second Measure shows that DoorDash had captured over 50 percent of the restaurant delivery market in May of 2021. Uber Eats had 21%, Postmates had 5% and Grubhub had 18%. Waitr earned 1% of national sales.
The trend started before the pandemic but only increased when the shelter-in-place orders were implemented in March of 2020. The start of the pandemic caused many people to look to delivery for the first time, and sales increased significantly for all of the delivery services but especially DoorDash. By the end of 2020, DoorDash was the clear market leader.
“In December, DoorDash made its public market debut with one of the biggest IPOs of 2020 while Uber acquired Postmates at the end of November in an attempt to consolidate market share and boost profitability,” the report said. “Uber is also seeking ways to diversify its existing business, such as by launching a U.S. grocery delivery service, expanding its prescription delivery partnership with Nimble, and acquiring alcohol delivery company Drizly.”
Combined, DoorDash and its subsidiaries control 57% of the delivery market, but the report acknowledged that the data could have problems. Some Uber rideshares are indistinguishable from Uber deliveries and do not get reported as deliveries. As well, the report was unable to collect data made through Uber Cash or purchases made by corporate customers. Data was collected from “aggregated debit and credit card purchases from a panel of millions of anonymized U.S. consumers.”
An interesting fact about the report was the strongholds each service had on certain metro areas. Uber Eats had a strong presence in Miami with 56% of the market, but only 16% in Los Angeles. DoorDash controlled 74% of the market in San Francisco but only garnered 35% in New York City. New York City was Gubhub’s highest metro area with 36%.
The report concluded that subscription services will become a major source of revenue for the delivery companies. All of the major delivery services have a subscription service, and Uber has a combined meal delivery and rideshare subscription services.
“Another very popular growth strategy for meal delivery companies has been forming partnerships with the nation’s top chain restaurants,” the report said and continued: “Last year, DoorDash officially teamed up with Little Caesars Pizza, a brand that has never previously offered delivery. DoorDash has other deals with Wendy’s, Chick-fil-A, and McDonald’s, the biggest fast-food chain in the country, which also offers delivery with Uber Eats.”
The largest challenge for the delivery services is the lack of loyalty. Customers move between delivery services and often look for the one with the lowest delivery fee. For example, 42% of Grubhub’s customers used DoorDash, and 28% of Uber customers used Grubhub.