DoorDash: great unit economics, but many unanswered questions
Daniel McCarthy, 01 December 2020
A lot of people have a lot of different opinions about DoorDash in light of their pre-IPO S-1 filing. Many reporters and pundits are concerned about profitability in the restaurant meal delivery category as a whole, wondering whether any of these firms could ever sustainably turn a profit. Many others are more optimistic, pointing to some of the (many) customer-related disclosures that DASH scattered throughout its S-1. And of course, all of this uncertainty is only further compounded by COVID, which was and has continued to be a big shot in the arm for everyone in the category, but introduces yet more uncertainty about how the world will look post-pandemic.
Given my own academic research with Elliot Oblander and Kivan Polimis into the industry, which I will hopefully be able to link to over the next couple of months (if you’re interested, shoot me an email and I’ll make sure send it to you as soon as it breaks!), and given the volume of disclosures that DoorDash provided in the S-1, I took a closer look at the company to uncover what its underlying unit economic condition currently looks like, how COVID has impacted it, and what their “normalized” economics may be after stripping out pandemic-driven behavioral changes.
