The Rundown - Deep Dive: The Food Fight Between DoorDash and Uber

Episode Date: February 23, 2025

The battle for your takeout orders is heating up, and today we’re diving deep into the food delivery wars. DoorDash dominates the market, but Uber Eats is making aggressive moves—including a lawsuit against its biggest rival. We’ll break down the competition, the financials, and the challenges both platforms face, from labor issues to rising fees and restaurant pushback. Who wins in the long run—and will consumers keep paying premium prices for convenience?The content of the video is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures.Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.

Welcome back to the rundown for another weekend deep dive. In today's episode, we're talking about the food delivery wars. Online food delivery is big business. The market is expected to reach $430 billion in the U.S. alone in 2025. And the consumer demand is undeniable. We've all gotten a little too comfortable with the idea of paying $25 for a $10 burrito, just so we don't have to put on shoes or bust out the air fryer. And there are two companies battling it out right now for your takeout.

Doordash and Uber Eats. And the rivalry between these two is getting spicier. So in today's episode, we're breaking down the state of the food delivery industry, how these two platforms are fighting for dominance, and the challenges they face, everything from regulation and labor costs to restaurant relationships, and you're growing frustration with all those fees. So many fees. We got a great one for you today.

Let's dive in. We had to start the show by talking about the leader in the food delivery space, DoorDash. You know, I feel like DoorDash is successful. is kind of underappreciated. DoorDash might be the best performing consumer tech stock out there. Shares are already up 20% in just two months into 2025 and up over 70% in the past year. DoorDash is the dominant company in online food delivery, controlling more than two thirds of the market. On a global scale, DoorDash holds either the number one or number two spot for market share in 20 out of the 25 countries, and it's gaining shares in nearly every international market.

Just to put into perspective how dominant. DoorDash is, their market share is nearly triple that of Uber Eats. So it's not even close. DoorDash is the king of food delivery. At least for now, we're going to dig into the competitive threat from Uber in just a bit. But despite the competitive threat from Uber, DoorDash keeps growing. Monthly active users hit 42 million in December of 2024. That's up 5 million from a year earlier. And their DashPash membership program is also hitting record highs with 22 million members. That's up from 18 million a year ago. And looking at DoorDash's financials, they're also getting stronger. DoorDash has reported its second ever quarterly profit since going public in 2020,

and they posted better than expected growth for the current quarter. The total order value on the app jumped 21%. And the company's revenue, which is a cut it takes from the total order value, jumped by 25%. Both those metrics topped Wall Street estimates. And one big growth driver for DoorDash has been grocery delivery. DoorDash first started delivering groceries back in 2020, but they added thousands of grocery stores to its platform in 2024 to its U.S. marketplace, and the grocery vertical has been a huge part of their growth strategy moving forward. DoorDash reported a 42% increase in users ordering from more than one vertical, so that means that people are ordering more than just food through DoorDash.

Investors are watching the growth of these verticals like grocery closely. In fact, some analysts say that DoorDash is just barely scratching the surface. Mark Mahaney from Evercore ISI estimates that DoorDash's services currently reach about 800 million people, but that's still less than 10% of the global population. So things are looking good for DoorDash right now, but they still got a real challenger in Uber Eats. So let's talk about them. Now we just talked about how DoorDash is the leader in the food delivery space,

but Uber Eats is a real threat. I mean, you can't turn on a TV these days without seeing an Uber Eats commercial. They've been throwing a lot of money at marketing, featuring everyone from Matthew McConaughey to Seek-1, Barclay, all in an effort to steal market share from DoorDash, and it seems to be working. Now, before we get into the numbers, let's first talk about Uber Eats' origin story. It started off back in 2014 as a side project inside of Uber, but they became a serious threat in 2020 after they acquired postmates for $2.65 billion.

These days, Uber Eats controls about 25% of the market, far behind DoorDash, but still the second biggest player. And this rivalry between the two is starting to get personal. week, Uber sued DoorDash, accusing them of anti-competitive practices that drive up costs for customers and restaurants. Uber claims that DoorDash is locking restaurants into exclusive deals. They threaten these restaurants with higher commission rates or lower visibility on their app if they do a deal with Uber as well. DoorDash has fired back saying the lawsuit has no merit. But regardless of how this plays out, it's clear that the tensions between these two is starting to heat up. And Uber is really counting on the growth of Uber Eats. In fact, Uber Eats has

become crucial to Uber's overall business. Their delivery segment, which mostly is Uber Eats, pulled in $20 billion in gross bookings in Q4 of 2024. That's 46% of Uber's total bookings, which means that the food delivery business is catching up to the core ride sharing business. And one thing that's really helping Uber Eats is been Uber One. Uber One is their membership program designed to keep users loyal, and it's growing really fast. Subscribers to Uber One jumped 60% year over year, hitting 30 million members. For $10 a month, members get free delivery, 6% cashback on rides, and exclusive discounts. And some of those discounts on Uber eats are pretty solid.

And similar to DoorDash, Uber is also expanding beyond just food delivery. In fact, grocery and retail orders now make of about 18% of their gross bookings. That's up from 12% in 2023. Some of this is probably thanks to a partnership they have with major retailers like Costco and Albertsons. And then there's the other big opportunity that investors are keeping an eye on, a potential partnership with Waymo. Waymo is the robo taxi company from Google, and Uber already has a partnership with them. Uber lets customers hail Waymo's self-driving taxis in Austin and Atlanta through their app,

and it's not hard to imagine them integrating autonomous deliveries into Uber Eats as well. So you might have a robot deliver your burrito soon. Honestly, that'd be kind of cool. So right now, both companies are thriving, trying to take a bigger piece of the pie of the overall food delivery space, but both of them also have some serious challenges ahead. So let's talk about it. All right, so we've talked about all the good stuff. But now we need to talk about the challenges that these online food delivery platforms like Uber and DoorDash are facing.

It ranges from regulation, labor supply issues, rising prices, and fee fatigue from consumers and restaurant partners. Let's start with the labor challenges first. Both DoorDash and Uber rely on gig workers to pick up, drive, and deliver your food. And retaining those drivers is tough. Many drivers complain about low earnings, especially after you factor in the cost of gas, maintenance and wear and tear on the car. So that leads to a high turnover rate from drivers. And then you have fee fatigue.

Because even though we all love the convenience of food delivery, let's be real. Every time I order, I feel like I'm getting hit with a new fee. You got a service fee, a delivery fee, a small order fee, a surge fee. And then adding the tip for the driver on top of that, it all adds up.

And at a certain point, I think people might just start picking up the order themselves. Or maybe cooking. Well, that might be the last resort. And then you also have the fee problem with restaurants. as well. Many people don't know this, but the delivery platforms take a 15 to 30% cut of every order from the restaurant, which eats into the restaurant's profits. That's why some restaurants are fighting back, either by hiking menu prices on the delivery apps or building their own

in-house delivery services to avoid paying Uber and DoorDash altogether. And then finally, regulation is the wildcard here. Some cities are introducing fee caps or pushing for gig workers to be reclassified as employees, which would drive up labor costs. And that could massively impact the economics of food delivery. So yeah, while Uber and DoorDash are growing, they're still walking a fine line right now between keeping customers, drivers, restaurants, and regulators happy. It's a tough balancing act, but with billions of dollars in market share up for grabs, the stakes couldn't be higher. So there you have it, a breakdown of the food delivery rivalry between DoorDash and Uber Eats. DoorDash is clearly on top, but Uber Eats is not going to go down

quietly. Ultimately, I don't think this will be a winner-take-all situation. I think, both will end up carving out a piece of the pie. But there's still a lot of challenges for both companies that could shake up the industry in the years ahead. At least for Uber, they have their ride-sharing business to fall back on. DoorDash, on the other hand, they need to make this work. Well, all right, guys, that's it for today's deep dive. If you guys enjoyed today's show,

be sure to hit us with a five-star rating on Apple or Spotify. And if you want to watch the video version of this episode, you can on YouTube or Spotify. The video will include interesting graphics and charts that you might find useful. Thank you guys again for listening. Shout out to Mike in the video. the incredible team at public for all the work behind the scenes. We'll see you guys back here on Monday.