DoorDash Business Model: How Does the App Makes Money?

DoorDash business model works on the primary goal of benefiting customers and restaurants by bringing significant transformation in food delivery services.

Updated 17 January 2024

Anand Prakash
Anand Prakash

VP – Pre Sales at Appventurez

DoorDash took the on-demand world by storm by becoming one of the most successful food delivery services. 

The app has not only solely made its services available from 600 to 7,000+ cities but also gained the limelight of the market by undergoing partnerships with nearly 80% of U.S. restaurants

DoorDash business model is so successful that the app is expected to generate $320 billion by the end of 2029. Apart from understanding what makes DoorDash business model unique, let’s also explore the strategies that can be followed by an on demand app development company to develop an app as successful as DoorDash. 

Doordash Business Model

What is DoorDash and what are its Unique Features?

DoorDash is an on-demand food delivery service that lets the user order food from a variety of nearby participating restaurants. The app also lets people sign up to become food deliverers and the restaurants sign up to have their food delivered to customers. 

The DoorDash app is integrated with advanced features that enhance user engagement and facilitate revenue generation. Some of the features of the DoorDash app are: 

Top Menu

A top menu option is offered in the app to make the whole food ordering process a lot more customer-centric. It showcases the top food items ordered by the customers in a specific restaurant.

Suggested List

A suggested list is one of the significant features of the DoorDash app. The app makes use of Artificial Intelligence development services to give a suggested list to the user on the basis of the people’s choice.

Live Tracking

The app provides the user with an option of live tracking to determine the location of the delivered item. The feature also facilitates regular updates on the device regarding where the food has reached.

Dual Rating

The DoorDash app gives the user an option of rating two times. The first one is to the food and delivery quality while the second one is to the person delivering the food to your doorstep.

Schedule Delivery

Doordash, an on-demand food delivery app gives the user an ease to schedule orders even a week in advance. Thus saving the user’s time when ordering in peak time or during the festivals.

DoorDash Business Model: How the App Generates Money?

There are different factors that contribute to the success of the DoorDash app, further impacting the cost of developing an on-demand delivery app

However, before understanding what makes DoorDash a successful app, it is important to comprehend the strategy and revenue model the app follows that helps bring money to the table. 

Delivery Fee Model

One of the major sources of revenue for DoorDash is its delivery fee model. With its capability of retaining the users, DoorDash heavily relies on it. The delivery fee, charged by the user,  is calculated depending on the distance between the pick-up and the drop-off location and demand. 

Commission-Based Revenue Model

For every successful order made via its platform, Doordash earns a variable commission from the restaurants. The company has a tiered commission structure, as it offers three different plans for restaurants to choose from- Basic, Plus, and Premier. 

Depending on the plan that the restaurant goes with, Doordash charges the percentage of the order subtotal.

Subscription-Based Revenue Model

Doordash also has a subscription service called Dashpass for customers to save on delivery and service fees. This model generates revenue by charging the users a recurring fee that is processed at regular intervals. 

Software as a Service (SaaS) Revenue Model

Doordash has a SaaS revenue model in the form of a DoorDash storefront for restaurants. The software helps restaurants to set up their own online ordering system and take control of the online delivery and pickup orders. 

Advertisement-Based Revenue Model

Doordash also brings money to the table with its advertising-based revenue model. Restaurants and food joints are charged for their marketing and advertising on the platform. 

DoorDash is more than just a food delivery platform. DoorDash business model also generates considerable revenue from the acquisitions of companies, gift cards for customers, Doordash Store, and Doordash for Work. 

The above-mentioned revenue models have resulted in consistent growth of the app. Have a look. 

doordash growth strategy

What Makes DoorDash Successful?

One of the main reasons behind the success of DoorDash is its aim to provide customer satisfaction. Today, the DoorDash business model is a part of the growth strategy of numerous service industries that drive an on-demand economy through constant funding. But what are some of the factors that make DoorDash business model successful? Check below. 

  • DoorDash business model is to believe in constantly innovating and expanding its services which further allows the company to attract new customers while retaining the existing ones.
  • Another reason that makes the on-demand app DoorDash successful is its extremely convenient services to the users.
  • DoorDash has also utilized the power of social media platforms such as Twitter, Facebook, and other marketing techniques to promote the app
  • Another factor that makes Doordash business model successful is its services to facilitate customer support via different modes, such as email, mobile app feedback page, etc. 

Some Fascinating Facts About DoorDash’s Business Model

The business model of DoorDash is developed in a way that it can easily attract a lot of investors and collaborators. Here’s a glimpse into some interesting facts about DoorDash revenue model:

  • DoorDash follows a Y-Structure business model makes it easy to collaborate with eateries, users, and people who are willing to work as delivery partners.
  • The delivery agents or the personnel associated with DoorDash are known as Dashers.
  • The delivery fee for one order can lie anywhere between $5-$8 depending on the distance and time of the delivery.
  • DoorDash easily secures around 20% from the businesses as its commission.
  • Today, the brand is delivering in over 7000 cities across the USA, Canada, Australia, Puerto Rico, and Japan.

on demand app development services

Business Canvas Of DoorDash App – Different Segments It Encloses

The DoorDash business model reflects the Y-structure. You need to follow a food delivery app development guide that caters to the needs of three different entities – users, drivers (dashers), and partnered restaurants. 

DoorDash for business not only offers users the opportunity to order delicious food from any local store without delivery service but also provides more business opportunities to restaurants & gives job satisfaction to dashers.

In simpler words, the DoorDash business model canvas is similar to the most popular revenue-generating apps that work on the basis of these three segments:-

For Users

This segment belongs to a set of people who don’t know how to cook, have no time or facility for cooking their supper, or are professionals who can’t go out for lunch. The DoorDash model is structured from the perspective of providing these benefits to users:-

  1. Offers the option to choose from a vast number of restaurants across the city.
  2. Avail service 24 x 7.
  3. Provides the feature to track the order placed.
  4. Enjoy exclusive cost-effective and time-saving solutions.

For Dashers (Delivery Agents)

Most entrepreneurs who profited through an app have outlined this segment of the DoorDash business plan. Doordash’s on-demand food delivery application provides dashers with a chance to earn some money, both as a part-time or full-time job, further providing job satisfaction. 

For Restaurants

Doordash for restaurants has come up as a medium to extend their service in terms of on-demand delivery and run a business effectively even when they are in a distant location or have poor sitting arrangements.

The app provides them with benefits, such as:-

  1. Reach a wider audience
  2. The cost-effective and profitable customer engagement mechanism
  3. Get a delivery guy from DoorDash itself.
  4. Effective Branding and marketing, especially when using the advertising on the DoorDash platform.

doordash business model

How Can Appventurez Assist in the Development of On-Demand Food Delivery App?

The on-demand apps such as DoorDash, with options like 30-minute delivery windows and comprehensive insight into customer data, has already surpassed prominent players in the market. These features have also marked consistent improvement in DoorDash’s net worth, giving the brand an edge over its competitors. 

At Appventurez, we offer futuristic solutions for the development of an on-demand app with the utilization of tools to fulfill the demands of any business. One example is the development of a food delivery app ASAPP, where our experts integrated advanced features that revolutionized the food delivery landscape. 

Collaborating with our skilled developers will not only facilitate successful app development but also help the clients understand the latest market trends that could lead to its success. Connect with us today and experience your vision turned into reality.

on-demand app development


Q. Why is the Doordash business model successful?

The DoorDash business model fits well with the surging demands for convenient & fast delivery of food orders right at the doorsteps of customers. It’s a unified platform that adjoins a wide network of restaurants to customers with the involvement of delivery persons or dashers, making it among the prominent DoorDash core values. With super-fast logistics & robust operating system as DoorDash growth strategy, the app has emerged as an industry leader with splendid market & revenue growth in a short span of time.

Q. What makes DoorDash different from other food delivery apps?

Doordash is the most popular third-party on-demand food delivery service provider that connects thousands of restaurants, eateries, food brands, cafes, etc. in the USA. The DoorDash business model stands apart from other existing food apps with these exclusive features: 1. Pre-scheduled delivery option: Customers using DoorDash can pre-schedule the delivery of their food orders a week before the desired date. This option is mostly preferred by users to save themselves from last-minute hassles during festive days or peak hours. 2. Multiple rating features: Users can rate the quality of food, speed of delivery, & other experiences related to dashers right in one place on the DoorDash application. 3. Integrated AI: DoorDash values user experience. It provides automated filters of restaurants by utilizing artificial intelligence that makes it more accurate & efficient. 4. Real-time tracking: The business model of DoorDash allows users to keep eye on their food delivery orders with live location tracking features. They get notifications with real-time location updates of their orders on their device. 5. Most popular menu: Users can view the most popular restaurants, menus, & specialties of a specific food brand to pick the best one as per their choice.

Q. How much do door dashers/delivery people earn on the DoorDash app?

According to the Doordash business model, the door dashers or delivery person gets $1 per delivery & the amount will increase if a person delivers orders during peak hours.

Q. How long has DoorDash been in Business?

The four founders started the company in 2013 while they were students at Stanford. In December 2018, DoorDash overtook Uber Eats to hold the second position in the total US food delivery sales.

Q. How DoorDash Makes Money?

DoorDash revenue comes from a 20% commission fee charged by the merchants. The app also recurring revenue from the subscription services including DashPass, DoorDash for Work, and Drive.

Q. When did DoorDash Start?

DoorDash was started in 2013 by four students of Stanford University- Stanley Tang, Tony Xu, Andy Fang, and Evan Moore. As of December 31, 2020, the platform was used by 4,50,000 merchants, one million delivered, and 20,000,000 customers.

Q. How does DoorDash work?

DoorDash’s business model is driven by an idea to introduce a unified platform that connects users, delivery persons, and local businesses that have been closely connected to each other in the food domain. The working of DoorDash can be summarized in four steps- Decide what food item to order, paying for the order, checking the status and delivery of the service.

Anand Prakash
Anand Prakash

VP – Pre Sales at Appventurez

Anand specializes in sales and business development as its VP - Sales and Presales. He supervises the pre-sales process by upscaling on establishing client relationships. He skillfully deploys instruments such as cloud computing, automation, data centers, information storage, and analytics to evaluate clients’ business activities.

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