Uber Eats is stealing market share of DoorDash. What would you do?
LinkedIn- Samantha Yuan
First I would like to clarify some points here
1) Is there any specific Geography or Region where the market share is dipping for Doordash? – Assuming its Global
2) As an objective for measures to be taken do we have only market share in mind or overall revenue? Assuming the first goal is to drive usage which will benefit the revenue in the longer run
3) Do we have any specific timeline in the plan for laying out the strategy to counter this threat? – Assuming 1 year
About the company Doordash and Mission:
Doordash enables local businesses to meet consumers’ needs of ease and convenience, and, in turn, generate new ways for people to earn, work, and live. By building the last-mile logistics infrastructure for local commerce, DoorDash is fulfilling the mission to grow and empower local economies.
User Segment :
1) Power users: Those who use the apps frequently (at least once a week) to order food online.
2) Casual users: Who use the apps rarely say once in a month or once in two months order food
3) New users: Who haven’t used DoorDash at all
I think Power users are the area to target since they are the ones who could potentially drive more usage and ROI in this timeline of 1 year.
Strategic Choices we have :
1) Venture into other countries where DoorDash is currently not functioning
2) Start new business along with food like delivering online groceries
3) Comeup with new discount schemes like Monthly Plan where you would get a cashback of X% (say 10 – 15%) if there are at least Y orders in a month ( ex: 8 orders in a month)
4) Since Uber has a rider app too, DoorDash could tie up with other competitors of Uber like OLA where discounts could be provided for OLA users ordering food through DoorDash
I would next evaluate these criteria on basis of user experience, engagement, revenue, and cost to implement
| Option | UX | Engagement | Revenue | Cost to Implement |
| Venture into other countries where DoorDash is currently not functioning | Same UX | Would drive engagement and usage due to new users in the region | More usage would mean more revenue but they could face some competition from local companies who are also into food delivery | Although the app is the same, they would need to set up new delivery agents, tie up with local restaurants etc which could take time |
| Start new business along with food like delivering online groceries | Using the same app for both food and Groceries would enhance the user experience | This would also have a positive impact on engagement. Also, the users who order food & Groceries both can be provided some discounts for initial orders. This can lead to upselling opportunities where Food users also become grocery users and eventually drive the overall market share | Would act as an additional source of revenue. As long as revenue is greater than operating margin, this should be sustainable. Further it provides new job oppurtunites for new/existing delivery agents. This would mean additional revenue for Delivery agents | Already has the platform for serving Food. This can be extended with a similar concept for Groceries |
| Come up with new discount schemes like Monthly Plan where you would get a cashback of X% (say 10 – 15%) if there are at least Y orders in a month ( ex: 8 orders in a month) | This would enhance the user experience | This leads to more usage and more orders punched in. This will have positive impact on market share too | Might impact the revenue a bit due to excessive discounts | Pretty easy to implement in the existing platform |
| Since Uber has a rider app too, DoorDash could tie up with other competitors of Uber like OLA where discounts could be provided for OLA users ordering food through DoorDash | This would enhance the user experience | Could again leave to more usage as discounts are provided. Could unearth the possibility of new users as well as not all OLA users could be using Doordash. Eventually, more usage and new users have a positive impact on the market share | If we get new users from OLA as well, this can potentially lead to an increase in revenue. | Would need to build integration capabilities with OLA and OLA should be willing to share their user data with DoorDash. 1 year time line could be a challenge |
After evaluating all choices, I am more inclined towards Option 2) Starting a new business along with food like delivering online groceries which also aligns with Doordash’s goal of finding new ways for people to earn, work and live.