1.18.2020 4:30 AM

Gig Economy

DoorDash is winning the food delivery war

But it’s not fighting fair.

Bloomberg/Bloomberg/Getty Images

Once upon a time, the food delivery service landscape was full of plucky upstarts. That competition has fueled massive mergers and acquisitions, the rise of the gig company, shady business practices, and laws to deal with the latter two consequences.

On Friday, CNBC reported Second Measure data that shows DoorDash edging out GrubHub for leading market share. Too bad DoorDash is a terrible company.

DoorDash’s rise to power — The delivery app’s endless promotions and tip-skimming practices helped it gain a lot of traction as a relative latecomer to the industry, launching in 2013. Only Uber Eats launched after DoorDash and survived to tell the tale, but it had the power of, well, Uber behind it.

After standing its ground on its tipping model for months, the company was eventually shamed into changing it. The revamped model was confusing, just as predatory, and made even worse as recently as December.

Despite all this controversy, DoorDash jumped from 19 to 33 percent market share from 2018 to 2019, whittling away GrubHub’s previous dominance. GrubHub merged with Seamless and acquired Eat24 over the years, but the heavyweight was bested by what must surely be some kind of Ponzi scheme.

In 2018 and 2019, DoorDash, Grubhub, Uber Eats, and Postmates made up 93 and 94 percent of the entire food delivery market, respectively. Only Postmates managed to not only hold onto its market share but increase it a little against the tide of DoorDash.

  • DoorDash: Increase from 19 to 33 percent
  • GrubHub: Decrease from 43 to 32 percent
  • Uber Eats: Decrease from 22 to 19 percent
  • Postmates: Increase from 9 to 10 percent

DoorDash sales grew 143 percent year over year while it wasn’t paying its contractors adequate wages and threatening millions to combat an (admittedly clumsy) California freelance law that seeks to protect them. But, hey, who doesn’t love a coupon?