Americans are still ordering a lot of delivery, even as they also return to dining rooms and tighten up their spending.
Both DoorDash and Uber Eats said orders and sales increased in the first quarter, noting that demand has been surprisingly resilient despite the changing consumer landscape.
“All of the core metrics that drive the business are positive,” Uber Eats CEO Dara Khosrowshahi told analysts this week.
DoorDash’s results were particularly impressive. Gross order volumes rose 25% year over year to $12.4 billion, which was also a 9% increase over the previous quarter. The growth included 23% more orders than a year ago, or a total of 404 million transactions.
Uber Eats’ metrics were muted in comparison, but positive nonetheless. Gross bookings increased 12% year over year to $13.9 billion, a 3% quarter-over-quarter increase. Order volume rose as well, to 1.71 billion trips, an 18% year-over-year increase. The company does not publicly break out delivery trips from rideshare trips.
Delivery sales
Source: SEC filings
The order growth came despite rising costs for everything from food to fuel. DoorDash CEO Tony Xu attributed it to the simple fact that people still have to eat.
“When I take a look at all of the possible areas where consumers could spend and consume, eating is still the one of the largest and certainly the highest frequency categories, where people eat three times a day,” he told investors, according to a transcript from financial services site Sentieo. “When we have built the largest marketplace with the most retained and also the most engaged user base, it just gives us the most shots on goal in the face of something like inflation.”
But that demand has not touched every part of the delivery market. Grubhub reported last month that its sales and orders shrank in the first quarter by about 5% each, leading to concerns that delivery was in trouble. Sales at pizza delivery chain Domino’s, meanwhile, also dipped in the quarter, in part because the company didn’t have enough drivers.
The latest figures show that the service is still growing, just not as evenly across the big players. Data from Bloomberg Second Measure, for instance, shows DoorDash building on its lead: At the end of 2020, DoorDash made up 52% of delivery sales, Uber Eats/Postmates, 29% and Grubhub, 18%. As of March 2022, it had grown its share by 7 percentage points, to 59%, compared to 27% for Uber Eats/Postmates and 14% for Grubhub.
One thing fueling DoorDash’s growth has been its ability to continue expanding its user base. In Q1, it added more new customers than it had in a year, driving its monthly active users and DashPass subscribers to record highs, Xu wrote in a letter to shareholders. And those customers are ordering more often: Average order frequency also set a new record in the quarter.
Uber Eats also believes it has a path to growing users via cross-promotion with its rideshare app.
“As mobility is opening up, a significant number of new riders are coming onto the platform, and that gives us the opportunity to then upsell those new mobility riders to Eats,” Khosrowshahi said, according to a Sentieo transcript.
Overall, both companies have been able to build on their massive gains during the pandemic, when restaurants were closed or limited and people hunkered down at home.
“Delivery has been surprisingly strong as we come out of the worst of the pandemic with continued sequential growth,” wrote BTIG analyst Jake Fuller in a note on DoorDash. But he added that future growth at the company will likely have to come from non-restaurant delivery like grocery and convenience stores.
“Core U.S. restaurant delivery isn't going to grow that fast (we're thinking sub-10%), so the market is implicitly giving DASH some credit for category and geographic expansion,” he wrote.
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