DoorDash, the popular food delivery platform, has quietly ended its pilot ultrafast grocery delivery service in New York City, marking the collapse of the once-thriving ultrafast delivery space. The company confirmed the discontinuation of the service, which had been operating out of a single warehouse facility called DashMart in the Chelsea neighborhood of Manhattan.
A DoorDash spokesperson stated, “DoorDash no longer targets 15-minute delivery from the DashMart Chelsea location. DoorDash ended the pilot earlier this year, and the site continues to provide access to over 2,000 items with delivery typically under 30 minutes.”
The demise of DoorDash’s ultrafast service aligns with the broader decline of the ultrafast grocery delivery market, which experienced rapid growth in spring 2021 but has since faced significant challenges. European startups like Gorillas attempted to replicate their successful ultrafast delivery models in the US, offering swift deliveries ranging from ice cream to cat litter in just 10 minutes.
By the end of 2021, multiple players had entered the US ultrafast market, including Gorillas, Jokr, Fridge No More, Buyk, Getir, Food Rocket, and Gopuff. These companies expanded their operations in major cities such as New York City, Chicago, Boston, and San Francisco, attracting substantial investments totaling over $12 billion, according to CB Insights.
DoorDash joined the ultrafast space in December 2021, operating its DashMart in New York City with around 2,000 grocery items available for quick delivery. Unlike traditional gig workers, DoorDash employed couriers directly to ensure speedy deliveries. However, with the conclusion of the ultrafast experiment, DoorDash has returned to relying on independent gig workers for its deliveries.
The unsustainable nature of the ultrafast model became apparent as players offered deep discounts to first-time buyers and struggled with low customer order volumes amidst rising inflation. Additionally, some communities in New York City criticized the dark store operations, claiming they negatively impacted local retail and undermined small businesses like bodegas.
By the end of 2022, the ultrafast delivery sector in the US experienced a swift collapse. Fridge No More, Buyk, Jokr, and 1520 ceased operations, and Gorillas was acquired by Getir in a deal worth $1.2 billion.
Investor interest also waned, with a significant 72% drop in funding for the ultrafast delivery sector in 2022, according to CB Insights. This downturn signifies the challenges and limitations faced by companies attempting to provide ultrafast grocery delivery services in a highly competitive market.