With so many other on-demand delivery services, what is DoorDash’s competitive advantage? In such a competitive industry, it is crucial to stand out and excel.
We’ll examine exactly how DoorDash has developed and optimized their competitive advantage.
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DoorDash’s Competitive Advantage
There are two main factors that have given DoorDash a competitive advantage. The first comes from their initial market research in identifying a niche of servicing smaller cities and suburbs versus the large urban locales of their competitors. The second competitive advantage is an unwavering commitment to continuous improvement.
DoorDash’s Niche
When DoorDash first began in 2013 as Palo Alto Delivery, it was started specifically to solve the problem of alleviating the headaches and business challenges that restaurants faced in providing delivery services.
Even more specifically, Palo Alto Delivery (which would soon become DoorDash) was initially created to solve these problems in the suburban area of Palo Alto.
DoorDash’s original mission was to be the “local, on-demand Fed-Ex” of food delivery. One of their founding missions has been, “to grow and empower local economies.” They used this niche to gain a foothold and quickly grew to phenomenal proportions.
They have since added more niches, but using the same combination of seeking input from their partners (restaurants, customers, drivers, and now stores) about challenges and pain points, and then creating solutions for these problems that were not being adequately solved by their competition.
DoorDash Offers Flexibility and Choice
DoorDash not only offers flexibility and freedom to its independent contractor drivers, but also flexibility and choice to its customers and restaurant partners.
They offer a variety of options for delivery, so that both customers and restaurants can choose the solutions that work best for them.
These now include delivery, pick-up, ghost kitchens, and even a marketplace where customers can order family-sized portions of their favorite restaurant meals to at least partially prepare at home. There are also options that are more specific for business meals or catering.
DoorDash is also offering same-day delivery for certain stores, and quickly expanding these and other options, as well.
All of these options provide a much desired confluence of flexibility and choice for almost all of the stakeholders in the restaurant (and now retail, as well) purchasing process.
DoorDash’s Commitment to Continuous Improvement
From the very beginning, when DoorDash was just getting started as Palo Alto Delivery, their aim was to solve problems and always improve.
First, they asked for honest feedback from their initial app and learned that it didn’t solve their target customers’ problems. In so doing, they discovered the real problems to solve, and promptly went about doing so.
In fact, DoorDash states that one of their core internal values is to improve 1% every day. This quickly compounds into a lot of improvement!
DoorDash has always sought out information about how they can improve. In addition to proactively asking all of their partners how they can do better, the founders themselves started out as the original drivers, learning firsthand about the challenge and experience of that job.
They still require all employees to spend some time working as a delivery driver to continue to find areas for improvement in the delivery driver experience and job. DoorDash also pores over data and reviews looking for all of the ways in which the experience of their restaurant partners, customers, and delivery drivers can be improved, as well.
Of course, none of this success would be possible without DoorDash’s app, programing, and advanced technology, which they are constantly assessing and improving, too.
Quickly Adapting to Changing Environments
Perhaps at least partly because of this constant drive for improvement, DoorDash was quick to adapt to the seismic changes in the economy and society due to the COVID-19 pandemic.
Suddenly, many restaurants were on the brink of collapse due to stay-at-home orders, quarantines, the rapid spreading of illness, and many more people wanting to stay home and avoid crowds even if they were not explicitly required to.
At the same time, people still needed food. And many other people were suddenly out of work after having been laid-off.
DoorDash marketed directly to people’s concerns. They not only implemented contactless delivery, solving all of the problems outlined above, but also created other timely initiatives.
In response to the many new and unprecedented challenges, DoorDash created a set of projects under the umbrella of their “Main Street Strong Initiative.” This included Entrepreneurship and Access Programs and a Restaurant Advisory Council,
DoorDash’s Company Image
Unlike at least one of their main competitors, DoorDash has maintained a largely positive public image. There has been a lack of scandals within the company, and through their actions and marketing they are generally perceived as a benevolent company.
Of course, it is impossible to keep everyone 100% happy all of the time, but DoorDash has always been earnestly conscientious about not only doing well, but continuously improving, and this has served to maintain and strengthen the company’s positive image with their customers, restaurant partners, drivers, and the broader community.
Additionally, DoorDash’s philanthropic and other community outreach programs, such as their Main Street Strong Initiative described above, expand and deepen their positive image and impact, as well.
DoorDash – Their Competitive Advantage
The Top 2 factors for DoorDash’s competitive advantage are their niche and their untiring commitment to always steadily improve. DoorDash’s initial market research identified the gap in their competition’s service, and so DoorDash opted to service suburbs and smaller cities instead of the large urban locales already saturated by competition.