Amazon is Threatening DoorDash Dominance ($AMZN, $DASH)
July 7, 2022
In the LikeFolio office, food delivery is part of our company culture.
What started during the pandemic cemented into an office ritual.
Every Friday we pick a location and have lunch Door-Dashed in for the team.
It’s so commonplace that “Door-Dashed” has become a verb. Almost like “Ubering” downtown to a concert.
And if you’ve been following along over the last couple of years, it shouldn’t be a surprise that DoorDash is the verb of choice here. Not Uber. Not Postmates. And not Grubhub….
Yet, that is.
DoorDash Commands Overwhelming Market Share in Food Delivery
We analyzed the total market share of demand mentions for the top 4 players in the food delivery scene over the last 5 years. And what DoorDash has accomplished is nothing short of remarkable.
In 2017, DoorDash held less than 10% of food delivery mentions, trailing Uber Eats AND Postmates when it came down to consumer conversations.
But since then, the platform’s popularity has exploded.
In fact, DoorDash has continued to grow its piece of the food delivery pie each year since, expanding its majority of demand mentions by +5 points over the last year to nearly 66% of food delivery demand mentions.
But recent news may threaten DoorDash’s path to total domination.
Amazon's Backing of Grubhub is a Major Offensive move for the eCommerce Giant
Amazon Prime members will now get Grubhub+ (typically $10/mo) for free. This means, if you have an Amazon Prime account, you now can use it to access free food delivery. (Don’t get too excited, you still have to pay for the food).
But this move seriously threatens an area in which DoorDash thrives: its DashPass subscription. Last quarter, DoorDash noted all-time highs in its DashPass subscription base.
But will users stick around if they get the same service as part of their Prime Membership?
Yikes. It’s something we will be tracking very closely.