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The annihilation of delivery start-ups aids the prospects of those left standing. Companies like 1520, which promised to have orders on customer doorsteps in a matter of minutes, have closed. DoorDash chief executive Tony Xu has taken the opportunity to grow.  

Acquisitions like the $45mn purchase of Wolt, a Finnish delivery start-up, lift order volumes. DoorDash has expanded overseas and added convenience and grocery store items as well as advertising to the core US restaurant delivery business. Speaking to investors on Wednesday, Xu said the company was now made up of five businesses, up from one in 2019. 

But expansion comes at the cost of ongoing losses. DoorDash was founded in 2003. It listed in late 2020. It delivers more than half a billion orders per quarter. Yet it reported a net loss of $75mn in the three months to September 30. At what size will it break even? 

Major cost-cutting change is unlikely in the near future. DoorDash partnered with Cruise Automation, which is developing autonomous vehicles, four years ago. In the future it may be able to avoid dealing with drivers and the regulators trying to reform the market. But the suspension of Cruise vehicles in San Francisco last month suggests driverless deliveries are some way off. Marketing spend must stay high in order to compete with rivals like Amazon, Uber and Grubhub. Stock-based pay is dragging on net income too. 

But have a look at DoorDash’s take rate and the trajectory looks positive. Gross order value — which tots up all of the things ordered via DoorDash, including restaurant food, groceries and convenience items — reached $16.75bn in the last quarter. From this, DoorDash’s revenue was $2.2bn. That is a 12.9 per cent take rate, up from 12.6 per cent the previous year. A rising number shows volume growth exceeds growth in operating costs. If it keeps moving in the right direction it will support future expansion plans.