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DoorDash Business Model: How Does it Make Money and Became a Success?

DoorDash Business Model: How Does it Make Money and Became a Success?

Originally, DoorDash was a logistics delivering startup found in the year 2013. It is made to fill the gap between the dealer and their potential buyers. So, the customers can get their desired product at their doorsteps. But currently, it only serves as the on-demand online food delivery app. The DoorDash business model is made to avail the customers by providing food delivery services as per their demand and the dealers to provide the same.

So, what is Doordash all about? 

DoorDash provides a virtual platform to the users where they can find the best restaurant and order the food from the same. On the other hand, DoorDash gives access to the restaurant to its extensive customer base so that they can fulfill their demand. The DoorDash also works to employ many people as their delivery guy.

This whole Doordash business is made to benefit its all three segments i.e. customers, dealers, and delivery boys. This business catches the hike since its foundation and gets tie-up with many famous restaurants also raised a decent amount of funds from many investors. Here in our article, we will discuss “how much DoorDash charge?”, “how DoorDash makes money?” and so forth. So, without wasting any time lets take a look at these following points which help the DoorDash business to grow at an extended level:-

Top 5 Features of DoorDash Business

Here we are telling about the top 5 features of DoorDash which help its business to reach the top:-

1. DoorDash Provides a pre-delivery option to its customers so that they can easily schedule their order even one week before. This helps them to save much and on each order especially in the peak time of festivals.

2. Doordash provides you with the dual rating option one for the food and quality other for the delivery boy.

3. DoorDash app works on artificial intelligence which acts to suggest a list to its users based on the people’s choice.

4. DoorDash provides its customer with a live tracking option so that they can track down the position of the delivery on their device.

5. DoorDash provides a top menu option to its users. This helps them to easily discover the top foods that have been ordered by numerous customers from a particular restaurant.

So, what makes DoorDash emerge as a successful food delivery app? 

It takes something extraordinary to stand out among the others. The Doordash did the same by providing food delivery services to its customers. Although, they have faced many hurdles in the beginning. The funds act as the major challenge for Doordash as a startup. But despite all the difficulties they had generated healthy funds for their business.

Taking the inspiration from DoorDash and following its models’ many companies in India like- Foodpanda, Zomato, Justeats, Swiggy, etc. have started their food delivery services. These companies from India not only offer their clients food services but also suggest the list of best restaurants for any event near them. The current net worth of Doordash is estimated as 4$ billion.

What makes DoorDash become a success? 

“It’s the Unique features of Doordash!” Which makes its business emerge as a successful food delivery business.

A. DoorDash operates in 20 places including Canada and the USA.

B. DoorDash charges $5 to $8 as a delivery fee per order from the customers.

C. Doordash hired their drivers whom they call “Dashers”.

D. The DoorDash earns a revenue of $600 in a year.

E. DoorDash charges a commission of 20% from the restaurants.

The DoorDash Customer Bonding

Behind every successful run of a business, its strong customer bonding. As customers are the only source that can provide profit or a loss to any business. The DoorDash works with the same mindset. To build a stronger relationship with the customer DoorDash has taken amazing steps which work to build a stronger bond with its customers.

They have targeted all social media like- Facebook, Twitter, and Instagram, etc. to reach a larger audience. By using all these social media platforms they get the opportunity to connect directly with the targeted audiences as these are the most active places for any business. That’s how they constantly remain in touch with potential customers as well as current customers. They also provide 24*7 service to their customer if they need any assistance and help from their side.

Some Facts About DoorDash Company

Founders: Tony Xu, Evan Charles Moore, Stanly Tang,  Andy Fang

CEO: Tony Xu

Year of foundation: June 2013

DoorDash net worth: $717M

Headquarters: San Francisco, United States, California

Number of employees: 850

Type of business: privately held company

Three Tier Segment of DoorDash 

The DoorDash business model is divided into three-tier segments. It has a Y-shaped business model which works to benefit all three of its segments. For the smooth running of a business, it is important to get well connected with all three segments of the business. In this point, we are explaining all three segments of DoorDash and what does DoorDash offers to its customers:-

How they work for Users:

1. They serve them 24*7 facility i.e. 7 days a week.

2. Provides extensive numbers of restaurants to choose from over the city.

3. Easy and money-saving solution for hunger.

4. Features the tracking delivery option to its customers.

How they work for restaurants:

1. Provides marketing and brand promotion for restaurants.

2. Provides DoorDash delivery boy to the restaurants.

3. Provides an extensive customer base.

4. Offers the cheapest and the easiest way to reach target customers all over the city.

How they work for dashers:

1. Increases the chances of dashers to get tips from customers as per their service quality.

2. They can earn up to $600 a year.

3. Best source for earning income.

The Customer Segments of DoorDash

The DoorDash business is made by keeping in mind the customers. Thus, they made their services according to them. “The people who want to order food online”. It fills the gap between the dealer and the customers also employs those who want to work for them part-time as well as full time.

So, how does DoorDash make money? 

It’s the customer segment that they serve. Following are the customer segments for which doorDash serves for:-

The Users:

1. The people who Don’t know anything about cooking.

2. The students who don’t know how to cook and don’t have a facility.

3. The working professionals who don’t get time to cook and for lunch.

4. The people who don’t have time to cook.

The Restaurants:

1. The restaurants who are looking for marketing and advertising

2. The new or old Restaurants require a large customer base.

3. The restaurants that don’t have delivery services.

4. The restaurants that don’t have good sitting arrangements.

The Drivers:

1. The people who want to work full-time/ part-time.

2. People can earn from tips and salary.

3. People who are jobless and seeking fluctuating timings in jobs.

How does DoorDash work?

On the above, we have mentioned how DoorDash makes bonding with the customers and how it works. Now at this point, we are mentioning how DoorDash works. So, the Doordash works in four steps which the restaurant owners or the merchant and driver must follow:

-> Select What To Order

This option is provided to the customers. In this option, they will find a wide range of options from which they can select their preferred food. This search can be customized according to the need of the customers. This helps them to easily select their preferred food. They also provide the restaurant selection option so that they can easily select their preferred restaurant and order food from the same.

-> Make a Payment 

In this option, the user can make the payment using the same app of their own. This makes the process i.e. the order gets transferred to the driver and the restaurant as well which helps them to know what food to prepare and what were to deliver. This whole process has been done after the payment. Also, the app shows the total payment including the DoorDAsh service charge too. So that the user can easily see what and how much transaction has to be made.

-> Tracking the Order

This helps the customer to watch and track the order so that they will know where their order has reached. On the other hand, the dasher picks up the package from the restaurant and delivers it to the customer. This also provides the calling facility to the customer so that they can make calls if they want to contact the driver regarding some point.

-> Make the Delivery

This is the endpoint of the process when the driver reaches the customer by tracking the drop location and delivering the food. DoorDash provides the tip option to the customer so that they can tip the Dasher if they want to. Making a payment is total up to the customer.

How does DoorDash make money?

It is the element that helps the DoorDash to make it work. For the successful run of any business, it is the strategy that helps them to reach the top and make them more successful. The DoorDash costing includes the maintenance cost, delivery cost, salary of the drivers, and so forth they also work on the development of their app which makes it more customer concentrated. Here in this point, we are mentioning the following earning points which help them to generate more revenue:

The Channels of DoorDash

The DoorDash has its site facility which provides the same facility to its customer currently DoorDash is working on the same so that they can provide the top facility to its customer. As people are getting more concentrated on mobile apps DoorDash has created its app which the users can add to their mobile. This helps the customer to use their service anytime anywhere.

It helps the user to search the nearby hotels and restaurants along with the newly opened restaurants too. This makes them visit as well as to order from the same restaurants. The dashers help them to deliver the order and pick up the order too.

Commission form the restaurants

The DoorDash serves customers by delivering food. It has become a large platform where restaurants can more. The DoorDash charges a 20% commission from the restaurants on each order.

DoorDash Future

The future of DoorDash relay on the workings of it as it was more focused on the development of their app and establishing their food chain. They work on their app development and also make it easier to use. DoorDash also provides the rating feature which makes the customer do the rating as per the quality of the order and the service.

DoorDash is currently only focusing on food delivery and improvising their app. The cost of on-demand food delivery app development costs between $5000 to $20,000 which is quite a reasonable price but now DoorDash is trying to reduce the costing as much as possible by making new strategies. They get more focused on their customer and constantly working on making their app customer-centered.

The Delivery Charges

The delivery amount totally depends upon the distance it is decided during the payment mode.  Usually, the delivery charges of DoorDash are $5 to $8. This is another earning source for DoorDash.

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