Show an ad over header. AMP

I am the FIRST

The ravenous economy around delivering your dinner

Data: Oblander, Elliot Shin and McCarthy, Daniel, "How has COVID-19 Impacted Customer Relationship Dynamics at Restaurant Food Delivery Businesses?"; Chart: Axios Visuals

When the pandemic shut down indoor dining and kept people at home for more than a year, food delivery apps like UberEats, DoorDash and GrubHub boomed. Now with COVID-19 curbed in the U.S., those companies are hoping that growth is more than a bubble.

Why it matters: The app surge has reallocated a vast amount of money and jobs to the delivery economy. If food delivery continues to grow, that means restaurants will have to keep forking cash over to the platforms and gig work will become even more common.


"The apps are definitely going to hold onto some of the gains," says Daniel McCarthy, a business professor at Emory who has studied delivery apps. "The question is how much."

  • Economists were projecting a deceleration in food delivery app growth in 2020. Instead they grew by 122%, per McCarthy's research.

Between the lines: Analysts thought the delivery app market was fairly saturated before the pandemic, but companies picked up scores of new users as the lockdown pushed people from new demographics — such as suburban residents and older people — to download food delivery apps.

  • Existing users also started placing larger and more frequent orders because many of them were quarantining, and therefore ordering dinner for the whole family, Doordash chief financial officer Prabir Adarkar tells Axios.
  • Total monthly food sales across the app steadily increased and reached nearly $60 million in December 2020, McCarthy found.
  • Hiring has also boomed — delivery driving job postings increased 43% between February 2020 and June 2021, according to data from the jobs site Indeed provided to Axios.

Details: Lots of the workers taking those jobs are people laid off from other service jobs at restaurants and in retail at the beginning of the pandemic.

  • Sarah Dygert was working as a server in Columbus, Ohio, but went to Doordash full-time after her restaurant shut down. "I actually really did miss the serving aspect," she says. "Working DoorDash you’re pretty much on your own."
  • Still, Dygert liked the perks of being able set her own hours and made good money. She ended up getting her boyfriend and other family members to sign up to work for the platform, too.
  • Now she's got a new remote desk job, but Dygert says she still picks up some Doordash hours here and there for extra cash.

What's next: McCarthy's research shows that the apps' rapid adoption of new users has dramatically slowed.

  • At the same time, restaurant traffic is roaring back to higher levels than before the pandemic. The number of reservations was 46% higher in April 2021 than April 2019, per Yelp data.

But, but, but: The apps are attempting to hold ontotheir pandemic-era glory with new offerings that wade into broader e-commerce

  • Many are adding verticals through which customers can get alcohol or groceries or toiletries delivered, betting that they can own last-mile delivery and take on the Amazon behemoth.

4 ffp

Why the startup world needs to ditch "unicorns" for "dragons"

When Aileen Lee originally coined the term "unicorn" in late 2013, she was describing the 39 "U.S.-based software companies started since 2003 and valued at over $1 billion by public or private market investors."

Flashback: It got redefined in early 2015 by yours truly and Erin Griffith, in a cover story for Fortune, as any privately-held startup valued at $1 billion or more. At the time, we counted 80 of them.

Keep reading... Show less

Scoop: Facebook's new moves to lower News Feed's political volume

Facebook plans to announce that it will de-emphasize political posts and current events content in the News Feed based on negative user feedback, Axios has learned. It also plans to expand tests to limit the amount of political content that people see in their News Feeds to more countries outside of the U.S.

Why it matters: The changes could reduce traffic to some news publishers, particularly companies that post a lot of political content.

Keep reading... Show less

Scoop: Amazon quietly getting into live audio business

Amazon is investing heavily in a new live audio feature that's similar to other live audio offerings like Clubhouse, Twitter Spaces and Spotify's new live audio platform, sources tell Axios.

Why it matters: As with Amazon's efforts in podcasting and music subscriptions, the company sees live audio as a way to bolster the types of content it can offer through its voice assistant, Alexa, and its smart speaker products.

Keep reading... Show less

Hurricane Ida exposes America's precarious energy infrastructure

The powerful hurricane that plunged New Orleans into darkness for what could be weeks is the latest sign that U.S. power systems are not ready for a warmer, more volatile world.

The big picture: “Our current infrastructure is not adequate when it comes to these kinds of weather extremes,” Joshua Rhodes, a University of Texas energy expert, tells Axios.

Keep reading... Show less

"We must go further": 70% of adults in European Union are fully vaccinated

About 70% of adults in the European Union are fully vaccinated against COVID-19, Ursula von der Leyen, the president of the European Commission, said Tuesday.

Why it matters: The milestone makes the E.U. one of the world's leaders in inoculations, after an initially lagging vaccine campaign, the New York Times notes.

Keep reading... Show less

What Elizabeth Holmes jurors will be asked ahead of fraud trial

Jury selection begins today in USA v. Elizabeth Holmes, with the actual jury trial to get underway on Sept. 8.

Why it matters: Theranos was the biggest fraud in Silicon Valley history, putting both hundreds of millions of dollars and thousands of patients' health at risk.

Keep reading... Show less

Insights

mail-copy

Get Goodhumans in your inbox

Most Read

More Stories