(Bloomberg) — It may not be possible to offer a 15-minute delivery service and be profitable, DoorDash Inc. Chief Operating Officer Christopher Payne said at an industry conference on Tuesday. But that’s not keeping a lot of companies from trying.
DoorDash rivals like Instacart Inc. and Uber Technologies Inc. as well as a crop of startups led by Gorillas Technologies GmbH, Getir and Jokr, are vying to ferry items to customers in record time. For many, it’s still a money-losing venture.
“All of us are beginning to test the balance: does 15 minutes matter? Is 30 minutes good enough? Can you make the economics work at both service levels?” Payne said, speaking at the ShopTalk conference in Las Vegas. “I don’t know where the edge is yet. It’s probably not 15-minutes, it’s probably 30-minute delivery that you can make the math work. I think customers will still be delighted by that.”
DoorDash is the largest food-delivery company in the U.S., with 58% of the market, according to Bloomberg Second Measure. The San Francisco-based company has parlayed its success in delivering restaurant meals to other services like grocery, convenience items and retail.
While growth in the delivery sector has decelerated from the triple-digit pace spurred by Covid-19 lockdowns, appetite for on-demand commerce is still “far higher” than pre-pandemic levels, Payne said. “Consumer expectations are only going in one direction.”
In December, DoorDash launched a 15-minute delivery pilot service in New York. “We understood that with increased scale we can make the math work and we’ll be testing the edge of that. Can we make it work in 15 minutes? We don’t know yet.”
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