Delivery apps became increasingly popular during the Covi pandemic and subsequent lockdowns.
The recent filing for an initial public offering by DoorDash Inc. DASH, as well as financial announcements from Uber Technologies Inc. UBER, +4.28 percent, Grubhub Inc. GRUB, and Postmates, have made it evident that the pandemic has given the food delivery business a significant boost.
From April through September, the four firms generated about $5.5 billion in combined sales, more than doubling their combined $2.5 billion in revenue during the same time the previous year.
However, it is uncertain how long the rise in deliveries will endure and what it indicates for the long-term financial success — or lack thereof — of food-delivery applications. While the firms’ revenues are increasing, their expenditures remain too high to generate a consistent profit. Other stakeholders, like restaurants, drivers, and towns, are attempting to either limit the fees the corporations may charge or earn a fair part of the companies’ income.
“Restaurants are heading into a terrifying winter with no lifelines other than delivery platforms,” MKM Partners analysts reported last week.
According to Edison Trends, this is expected to assist DoorDash, the industry leader in the United States with a 50% market share, as well as the next largest players: a combined Uber Eats and Postmates, followed by Grubhub. In its prospectus, DoorDash stated that its 543 million total orders for the first nine months of the year quadrupled from 181 million orders in the same time the previous year.
Beyond takeaway, Uber and DoorDash are pushing down on delivery on many fronts, increasingly competing with Amazon Inc. AMZN, -0.28 percent, Walmart Inc. WMT, +0.95 percent (which has debuted Walmart Plus, a subscription-delivery service), and other delivery-only retailers. In preparation for the holidays, DoorDash has introduced a service that allows consumers to deliver gifts to others. Instacart, another gig firm that delivers groceries, is also a competitor.