DoorDash S-1: The food delivery giant files paperwork to go public
The 7 year old The company released its IPO filing on Friday, announcing that it had revenue of $ 1.9 billion for the first nine months of this year, which ended in September. During that time, losses totaled $ 149 million. In the same period of 2019, it lost $ 533 million.
However, in the second quarter of this year, DoorDash made a profit of $ 23 million amid the pandemic.
“The pandemic has shown how important we are to the communities in which we operate,” DoorDash said in the filing. “With the pandemic, our platform has become a lifeline for retailers whose only revenue options are take out and delivery, for consumers in need of shelter, especially vulnerable populations whose health depends on isolation, and for many of the millions of newly unemployed in need of earning opportunities. “
DoorDash was founded in 2013 by a group of Stanford students to help local businesses with their delivery needs. To date, DoorDash has raised $ 2.5 billion and was most recently valued at $ 16 billion.
Overcrowded delivery room
While the grocery delivery room is crowded, DoorDash, which acquired premium restaurant delivery service Caviar in August 2019, is the leader in the US in terms of sales. According to analytics firm Second Measure, it topped Grubhub for the first time in May 2019 and remains at that point. Still, DoorDash notes that U.S. consumers on their platform made up less than 6% of the total U.S. population as of September. “We believe that we are in the early stages of broad market adoption.” Competitors in this space include Uber, which operates Uber Eats and newly acquired Postmates, and Grubhub, which was acquired by Dutch-based Just Eat Takeaway.com and recently announced a partnership with Lyft. Companies compete to lower prices to attract customers, which in turn can affect financial performance.
While the company is best known for delivering groceries from restaurants, DoorDash says its mission is higher. The aim is to develop products that will change the way local retailers sell things other than grocery stores, including an on-demand logistics platform that “delivers ice cream before it melts, or pizza before it cools, or food enables one hour “and dealer services to help companies acquire and deliver customers.
In recent months, the company has diversified its offerings through partnerships with grocery stores and convenience stores. But new categories also come with competitors. For example, on-demand grocery shipping company Instacart recently announced that it has partnered with Walmart to acquire Amazon.
As with his peers in the on-demand economy, DoorDash faces battles over its business model and the classification of its one million delivery people – referred to as “dashers” – as contractors.
DoorDash recently teamed up with Uber, Lyft, Instacart and Postmates to gain a victory in California by passing Proposition 22, a company-paid election initiative that allows them to bypass a new well-known California labor law as AB-5 and on Treat their drivers as contractors in the state rather than employees. While Prop 22 does not provide explicit protection for workers such as employee compensation or unemployment insurance, which are given to workers and therefore more financially beneficial to the employer, it does include some new performance concessions that employers must provide for independent contractors.
DoorDash lists the potential reclassification of its Dashers as employees under federal or state law as a risk factor that could adversely affect its business.
“We have been and continue to be involved in numerous litigation related to the Dasher classification,” the company said on the file.
DoorDash admits that its Dashers compensation model is another risk factor that “previously led to negative publicity, lawsuits and regulatory investigations and may continue to do so”.
The company has received a backlash for a controversial employee tipping policy, with some tips adding to their base pay. The policy, which has since been amended, is the subject of a November 2019 lawsuit filed by DC Attorney General Karl Racine seeking “millions of dollars in tips used to subsidize DoorDash payments to Dashers”, At the time, a DoorDash spokesman called the complaint “without merit”.