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I think the bigger question for this type of company is margins in the face of competition. The service they offer is totally undifferentiated from that which a

by sfblah 6y ago

I think the bigger question for this type of company is margins in the face of competition. The service they offer is totally undifferentiated from that which a competitor could fairly easily provide. Yes, it takes marketing dollars to sensitize consumers to the existence of delivery services. But, once someone knows about them, there may well be a race to the bottom on price. An 8% profit sounds great, but is it sustainable?

malisper 6y ago
That's a different argument that what most people in the thread are making and in my opinion, a reasonable one.
- arcticbull 6y ago
  I suspect that the massively negative first year margins due to, what I assume is CAC, creates a moat. Very few companies are as "backed by Masayoshi Son," i.e. willing to set fire to the huge quantities of money necessary to establish a foothold. This is a network effect business in a lot of ways, and metros tend to be dominated by a particular food delivery provider.
  - gumby 6y ago
    The problem with CAC in this market is that I doubt enough people say, "I'm hungry, I'll open door dash". Instead I want to eat from a local restaurant whom I call for delivery and then door dash pays someone to bring my food. In that case DD hasn't "acquired" me as a customer.
    - arcticbull 6y ago
      I'm definitely in the former camp so I'm curious what the breakdown is.
    - icedchai 6y ago
      Yep... I use whatever one offers me the best deal. These days, I rather order it from the restaurant directly if they have curb side pick up. It's better for them and me. Delivery drivers often get lost or are incredibly late.
nipponese 6y ago
This is not an unreasonable argument but you're negating the company and the industry ability to innovate and find new rev models. I use to frequently see this argument made about Apple and Amazon before Apple's transition to "services" and AWS. When you buy a tech stock you're not betting on a robot that can't adapt, you're betting on a corporate culture that's digging up new ground.
- teachrdan 6y ago
  The question, then, is whether DoorDash is more like Amazon or WeWork. By everything I see, they are a company that pays people to deliver stuff. That is a very crowded marketplace. Without groundbreaking innovation the likes of which companies an order of magnitude bigger have failed to deliver (like Uber and self-driving cars), I personally don't see how they create a revenue stream as lucrative as AWS.

by sfblah 6y ago

malisper 6y ago

That's a different argument that what most people in the thread are making and in my opinion, a reasonable one.

arcticbull 6y ago
I suspect that the massively negative first year margins due to, what I assume is CAC, creates a moat. Very few companies are as "backed by Masayoshi Son," i.e. willing to set fire to the huge quantities of money necessary to establish a foothold. This is a network effect business in a lot of ways, and metros tend to be dominated by a particular food delivery provider.
- gumby 6y ago
  The problem with CAC in this market is that I doubt enough people say, "I'm hungry, I'll open door dash". Instead I want to eat from a local restaurant whom I call for delivery and then door dash pays someone to bring my food. In that case DD hasn't "acquired" me as a customer.
  - arcticbull 6y ago
    I'm definitely in the former camp so I'm curious what the breakdown is.
  - icedchai 6y ago
    Yep... I use whatever one offers me the best deal. These days, I rather order it from the restaurant directly if they have curb side pick up. It's better for them and me. Delivery drivers often get lost or are incredibly late.

nipponese 6y ago

This is not an unreasonable argument but you're negating the company and the industry ability to innovate and find new rev models. I use to frequently see this argument made about Apple and Amazon before Apple's transition to "services" and AWS. When you buy a tech stock you're not betting on a robot that can't adapt, you're betting on a corporate culture that's digging up new ground.

teachrdan 6y ago
The question, then, is whether DoorDash is more like Amazon or WeWork. By everything I see, they are a company that pays people to deliver stuff. That is a very crowded marketplace. Without groundbreaking innovation the likes of which companies an order of magnitude bigger have failed to deliver (like Uber and self-driving cars), I personally don't see how they create a revenue stream as lucrative as AWS.