DoorDash Closes $400 Million Funding Round

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“In the last month, a pair of food delivery startups were battling complaints about their tipping policies. Customers and workers chastised the companies for unfairly using tips to subsidize worker pay. As the furor grew, one of the companies, Instacart Inc., changed its compensation policies to match some of workers’ demands.

Meanwhile, the other company, DoorDash Inc., stood firm. It still uses tips from customers to offset some of the minimum payment that a worker gets for each delivery job, in which “Dashers” travel to restaurants or stores and bring food to customers. That decision apparently hasn’t harmed DoorDash’s reputation in the eyes of investors. The company said on Thursday that it received a new round of funding that values it at $7.1 billion.

In an interview Thursday to promote the investment, DoorDash Chief Executive Officer Tony Xu defended the tipping practice, which has been in use since 2017. Xu said internal data show that under the current pay model, Dashers stay on the platform longer, are more satisfied with their jobs and make deliveries in a more timely manner. He blamed recent backlash on Instacart’s implementation of its own policy.”

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Digital Ordering to Triple by 2020

Restaurant mobile app

Restaurant digital orders have grown an average of 23 percent, per year since 2013, and will triple by the end of 2020, according to a report from NPD Group.

The report, called Delivering Digital Convenience, found that 70 percent of a restaurant’s digital orders come through its mobile app or its website, with the remaining orders coming through third-party apps or websites. Customers used the restaurant’s own app most of the time because of rewards points or savings, and other brands appeal to customers because they want to create a custom order or take friction out of the ordering process.

Third-party apps like DoorDash, UberEats or Grubhub/Seamless accounted for 40 percent share of the 20 most used apps, and are used by consumers who want to look up various food items and check prices.

“Digital orders will remain an outsized source of growth for the restaurant industry over the next few years, and operators who desire to grow need to embrace a digital strategy,” said David Portalatin, NPD food industry adviser and author of Eating Patterns in America, said in the announcement. “There are clear leaders in the digital ordering space, and third-party providers who have achieved critical mass the fastest.”

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Walmart surpasses Amazon as online shoppers’ most popular grocer

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“The world’s largest retailer has surpassed the e-commerce giant in a survey of online food shoppers, more of whom said they most recently visited Walmart’s site for groceries. Local supermarkets were in third place, fueled in part by logistics provider Instacart, which handles orders for grocers like Kroger Co. and many others.

Walmart has moved ahead thanks to the rapid deployment of its curbside grocery pickup service, which is now in about 2,000 stores. An additional 1,000 will come on board by the end of 2019, the company said at a recent investor conference.

Walmart also works with delivery services like DoorDash and Deliv to bring groceries to customers’ homes for a fee. Amazon, meanwhile, offers grocery delivery from Whole Foods Market stores for its Prime customers in 60 cities, with in-store pickup now available in 10.”

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