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The most important piece of this article. >DoorDash isn’t profitable and has struggled to keep some of its delivery staff, known as “dashers,” from remaining w

The most important piece of this article. >DoorDash isn’t profitable and has struggled to keep some of its delivery staff, known as “dashers,” from remaining with the company for longer than a few months, raising costs to attract and train employees, according to people familiar with the matter. >A DoorDash spokesman said the company is “cash flow positive” in its “earliest markets,” including applicable marketing and overhead expenses. He declined to name those markets. Overall the company operates in 22 urban areas in the U.S. and Canada, according to its website.

semil 11y ago
Earliest markets are Palo Alto and Stanford.
- danieltillett 11y ago
  It is good then that these markets are typical of the rest of the USA.
- deleted 11y ago
  [deleted]
mathattack 11y ago
Perhaps the core underlying issue is that the service just isn't that good. Wait times of over an hour for cold food is awful. Is suburban delivery so hard to manage that restaurants and consumers are willing to let this go?
- potatolicious 11y ago
  This is I think the core issue that almost all of the gig economy startups face, even the gigantic ones like Uber. The trick with on-demand is that we're not the first into this space - low-tech versions have existed for years, but largely priced out of reach of the mainstream. This pricing was necessary because of the fundamental nature of on-demand. After all, getting someone to drive to a restaurant, order for you, and bring you the food has some pretty immutable built-in costs. Software can help reduce these costs, but IMO we've vastly overestimated the degree. It turns out in most cases the technology can't reduce costs enough to shift the economics from "upper class only" to "middle class". There have been two responses to this reality - one is to force the issue by subsidizing the unit economics with VC money, and pray that you can actually figure out the economics of bringing on-demand to the middle class before the money train derails - this is the Uber strategy (specifically, UberX, which is heavily subsidized in many markets). The other is to make the service suck - I'm not sure why any company thinks this is a viable strategy but we've seen many pursue it. Homejoy is the spectacular nuclear-explosion example but there are many others. It turns out human labor is expensive, hard to scale, and has a lot of built-in costs that can't be eliminated by smart software.

semil 11y ago

Earliest markets are Palo Alto and Stanford.

danieltillett 11y ago
It is good then that these markets are typical of the rest of the USA.
deleted 11y ago
[deleted]

mathattack 11y ago

Perhaps the core underlying issue is that the service just isn't that good. Wait times of over an hour for cold food is awful. Is suburban delivery so hard to manage that restaurants and consumers are willing to let this go?

potatolicious 11y ago
This is I think the core issue that almost all of the gig economy startups face, even the gigantic ones like Uber. The trick with on-demand is that we're not the first into this space - low-tech versions have existed for years, but largely priced out of reach of the mainstream. This pricing was necessary because of the fundamental nature of on-demand. After all, getting someone to drive to a restaurant, order for you, and bring you the food has some pretty immutable built-in costs. Software can help reduce these costs, but IMO we've vastly overestimated the degree. It turns out in most cases the technology can't reduce costs enough to shift the economics from "upper class only" to "middle class". There have been two responses to this reality - one is to force the issue by subsidizing the unit economics with VC money, and pray that you can actually figure out the economics of bringing on-demand to the middle class before the money train derails - this is the Uber strategy (specifically, UberX, which is heavily subsidized in many markets). The other is to make the service suck - I'm not sure why any company thinks this is a viable strategy but we've seen many pursue it. Homejoy is the spectacular nuclear-explosion example but there are many others. It turns out human labor is expensive, hard to scale, and has a lot of built-in costs that can't be eliminated by smart software.