New • IPO Report

Ahead of DoorDash IPO, Uber Eats Comes Knocking

Monday, December 7, 2020 • 12:00 PM EST

In the heated food delivery app market, DoorDash’s IPO is big news. Ahead of the December 8th, 2020 planned launch date, the food delivery platform is facing a strong rival in Uber Eats. While DoorDash remains dominant in terms of market share, Cardify data shows that Uber Eats is climbing. However, DoorDash is winning the loyalty game as the platform boasts industry-leading retention numbers.

DoorDash was the dominant player in the food delivery space for all of 2020, consistently seeing the highest gross weekly volume. That is, until November. A slight decrease in volume for DoorDash and an uptick for Uber Eats meant Uber Eats took the top spot from a volume perspective.

Uber Eats is also gaining in market share, going from 28% of the market in January 2020 to 32% in November. This, however, was not to DoorDash’s detriment, which also grew from 32% market share to its dominant 41% market share position. Other competitors - GrubHub and Postmates - lost market share to Uber Eats.

DoorDash’s dominance seems to come from loyalty. While Uber Eats briefly eclipsed DoorDash on loyalty in the summer, it quickly fell below 60% loyalty while DoorDash retained more than 65% of customers month to month. Even though all platforms see loyalty climbing, DoorDash remains the leader while Uber Eats remains the most erratic.

In DoorDash’s case, the platform is also winning in terms of having the highest market share of customers using only one provider. However, the pandemic seems to have pushed more people to use multiple platforms. Where DoorDash had 46% of its customers only using one platform pre-pandemic (July 2019 to February 2020), that number dropped to 36% during the pandemic (April 2020 to November 2020). Uber Eats had an even larger drop, going from 32% pre-pandemic to only 20% during the pandemic, the lowest of the four competitors in our survey.

As DoorDash prepares for IPO, it enters the public market as the dominant player in the food delivery space. However, Uber Eats is hot on DoorDash’s tail, gaining significant marketshare during the pandemic. What might set DoorDash apart from other providers, though, is its industry-leading retention and share of customers using only one platform. In the hyper-competitive and commoditized world of food delivery platforms, that loyalty could mean everything to DoorDash’s future business success.