However, this battle could eventually spread to other states, and major overseas markets like Australia - which DoorDash is gradually expanding into - have also taken major steps toward regulating "gig economy" companies.
Lastly, DoorDash still faces pressure in several states, most notably California and Massachusetts, to reclassify its drivers from independent contractors to employees so they can become eligible for better wages and benefits.ĭoorDash, Uber, and other ride-sharing and delivery companies have poured millions of dollars into ballot initiatives to block those measures. However, those higher fees could alienate its customers, and many drivers are still complaining that the rewards don't fully offset their higher gas prices.ĭuring DoorDash's latest conference call in May, CFO Prabir Adarkar admitted it was "hard to tell exactly what impact inflation is having on order volume and on consumer engagement," and that it "chose to absorb" the costs of its gas rewards for Dashers instead of passing them on to consumers - which suggests its near-term margins will decline if gas prices continue to rise. Rising fuel prices are making it difficult for its Dashers to earn sustainable wages, and higher food prices are causing restaurants to raise their prices - which could cause customers to think twice before paying additional fees and tips for third-party deliveries.ĭoorDash added "gas rewards" to its orders to help its drivers offset higher fuel costs back in March, and it plans to extend those rewards through August. Inflation, which currently hovers near a 40-year high, will also squeeze DoorDash's entire business. By comparison, DoorDash ended 2021 with 25 million monthly active users and 10 million DashPass members, who also pay $9.99 a month for similar perks as Grubhub+. are already Prime subscribers, according a recent PYMNTS survey. DoorDash's stock tumbled 7% after that announcement, while Just Eat Takeaway's shares surged 14%.Īpproximately 166 million consumers in the U.S. On its own, Grubhub+ costs $9.99 a month.Īmazon will also receive warrants that represent 2% of Grubhub's shares, and potentially receive another 13% of its shares if Prime delivers enough customers to Grubhub.
Prime members will receive a free one-year membership to Grubhub+ - its monthly membership plan that provides free deliveries for orders over $12, exclusive discounts, free food, and other perks. On July 6, Amazon announced that all of its U.S. However, Amazon ( AMZN -1.24%) recently stepped in and struck a new deal with Grubhub. That wasn't surprising, considering that Grubhub failed to capitalize on its early lead in the food delivery market and fell far behind DoorDash and Uber over the past three years.