Unlimited meal delivery seems too hard to pass up for many households. DashPass from DoorDash rocketed from 1 million subscribers to 5 million in just over one year. Competition is hot and heavy in the meal delivery market including other players Grubhub and Uber Eats.
Discounting and loyalty offers play a large role in customer retention as many consumers can easily choose among various delivery companies. So subscriptions create a stickier relationship. Right now, there’s enough meal delivery business to go around as many restaurants still have in-house dining restrictions. For the foreseeable future, stay-at-home consumers will continue to find meal delivery offers very tasty.
The following excerpt from a Wall St. Journal article reports more on the topic:
Consumers are eating up DoorDash’s DashPass while seemingly nibbling at offers from rivals Grubhub and Uber Eats by comparison. That could prove to be the secret sauce for DoorDash once a pandemic-driven wave of business shrinks. Other food-delivery subscriptions cost about the same and offer similar benefits. They are a good value for frequent users: A $9.99 subscription pays for itself if ordering food delivery just a few times every month. So, in a year in which demand for food delivery has soared, why aren’t all subscription programs prospering equally?
From August 2018 to August 2019, DoorDash said its program added over one million subscribers in its first year available. That number ballooned to over five million subscribers as of Sept. 30, 2020, according to DoorDash’s initial public offering filing. About 28% of DoorDash’s more than 18 million users are now considered monthly subscribers. By contrast, Uber Technologies said in its third-quarter report that it had just surpassed the one million subscriber mark for its Uber Pass and Eats Pass programs even as the company had 78 million monthly active platform users across Rides and Eats. Grubhub doesn’t release figures, but it also is believed to have fewer subscribers than DoorDash.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group