DoorDash Takes a Tip From Grubhub With Amazon Canada Partnership

DoorDash Takes a Tip From Grubhub With Amazon Canada Partnership

In a surprising reversal of its previous stance, DoorDash has announced a partnership with Amazon Canada to offer free yearlong DashPass subscriptions to Prime members in the country. This collaboration aims to provide Prime members with the benefits of DashPass, including free delivery and credits for pickup orders. DoorDash Canada’s General Manager, Shilpa Arora, expressed enthusiasm for the partnership, stating that it would allow Canadians to enjoy the perks of DashPass.

This move by DoorDash is reminiscent of its competitor Grubhub, which has had a similar arrangement with Amazon in the United States since July of last year. In fact, Grubhub recently extended its partnership, offering free two-year subscriptions for a limited time and continuing the yearlong offer thereafter.

DoorDash’s decision to replicate this deal is noteworthy, considering that earlier this year, the company’s Chief Financial Officer, Prabir Adarkar, explicitly stated that their strategy for driving DashPass growth did not rely on partnerships. Instead, DoorDash focused on channels that they believed would offer more sustainable long-term growth. Adarkar emphasized that the majority of their DashPass growth came from their own channels and traditional performance marketing channels.

This statement by Adarkar was clearly directed at competitors like Grubhub, which had employed partnership-driven strategies, such as the Amazon Prime deal and collaborations with Bank of America. Meanwhile, Uber leveraged its cross-platform subscription, Uber One, using its Rides business to drive adoption of its delivery services.

However, it appears that DoorDash is now changing its tune. Whether this shift is due to a slowdown in DashPass subscriber growth or the success of competitors in expanding their membership bases is uncertain. Nevertheless, DoorDash’s decision to form a partnership with Amazon Canada reflects their evolving strategy.

While the adoption of aggregators in the food delivery industry continues to rise, it may not be happening as rapidly as DoorDash desires. Data from PYMNTS’ study “Connected Dining: Third-Party Restaurant Aggregators Keep the Young and Affluent Engaged” reveals that the percentage of consumers who reported using a restaurant aggregator in the previous six months increased from 37% to 40% between April 2022 and February 2023.

Despite the challenges, DoorDash remains the leading food delivery app, according to PYMNTS’ Provider Ranking of Aggregators. This ranking takes into account various factors such as channel coverage, downloads, monthly average users, sessions per user, and average session length. DoorDash consistently outperforms its competitors in these metrics, with Grubhub ranking at No. 13.

As the competition in the food delivery market intensifies, it seems DoorDash is adapting its strategy to keep pace and maintain its position as the industry leader.

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