Meal delivery company DoorDash said its revenue more than tripled last year thanks to pandemic-driven demand, but it still lost money because it spent more heavily on marketing and expanding its business.
Temporary price caps __ which limit the commission fees DoorDash can charge restaurants __ are also having a negative impact. Seventy-three cities, including Chicago and Washington, D.C., have established caps in response to the pandemic, DoorDash said, costing the company $36 million in the fourth quarter. DoorDash said it has raised consumer fees in some markets to offset those costs.
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And there could be more bad news ahead. San Francisco-based DoorDash said it expects order growth will slow with the successful rollout of coronavirus vaccines, since diners will no longer be as reliant on delivery.
Still, DoorDash co-founder and CEO Tony Xu said the pandemic has raised consumer awareness of delivery and sped adoption by restaurants and other merchants. The number of partner stores on DoorDash's platform jumped 87% in the fourth quarter.
And Xu said DoorDash, which already controls half the U.S. meal delivery market, sees the potential for plenty of growth ahead, especially as DoorDash adds convenience and grocery stores to its platform and expands internationally. Besides the U.S., DoorDash operates in Canada and Australia right now.
“’It’s still pretty early days. The penetration levels are quite low," Xu said Thursday in a conference call with investors.
DoorDash reported a net loss of $312 million for the quarter that ended Dec. 31. The loss, of $2.67 per share, compared to a loss of $3.05 per share in the same quarter a year ago.
Wall Street had forecast DoorDash would post a fourth-quarter loss of 28 cents per share, according to analysts polled by FactSet. But their estimates had varied wildly. This was DoorDash’s first earning report since its initial public offering in December.
The company said its 1 million drivers, known as Dashers, earned more than $2 billion on the platform in the fourth quarter. They delivered 273 million orders, more than double the number in the same period a year ago.
Revenue jumped 226% to $970 million for the October-December period. That outpaced analysts’ forecasts.
For the full year, DoorDash reported a net loss of $461 million. That was an improvement from 2019, but DoorDash __ which was founded in 2013 __ has never made a full-year profit.
Its stock was down more than 11% in after-hours trading following the release of the earnings report.