In the San Francisco Bay Area, there’s no shortage of companies lining up to offer fast, cheap delivery from all your favorite chefs and restaurants. DoorDash, which launched in the South Bay last summer, has expanded just a little bit further south, now offering service in neighboring San Jose.
DoorDash seeks to differentiate itself from the pack, by working with local restaurants and providing its own network of drivers, to make delivery possible and profitable for them.
Some delivery companies — like the Seamlesses and Grubhubs of the world — only offer a way for restaurants to take delivery orders, but then leave the actual delivery up to them. DoorDash takes a different approach: It contracts its own group of drivers, who pick up prepared food from the restaurants and then drops it off at a customer’s house.
To enable this, DoorDash has created a series of mobile apps — one for consumers to place orders on, one for restaurants to receive orders from, and one for drivers to know where to go in either case — as well as a machine-learning algorithm to help determine which drivers are best positioned to pick up and make deliveries.
For restaurants it does away with the fixed costs of hiring their own delivery people, and for consumers it speeds up deliveries which might otherwise have been affected by spiky demand.
That has resonated with customers, who are spending hundreds of thousands of dollars in deliveries each week for food from local restaurants that is delivered within about 45 minutes. But it’s also resonating with the restaurants, which continue to sign up to be part of its network.
The last time we covered DoorDash, back in September, the company had 70 restaurants in Palo Alto and Mountain View that had signed up to have deliveries routed through its app. The company now has more than 200 in those markets, as well as its recently launched San Jose service.
But you might be wondering why DoorDash chose to go south instead of north to San Francisco. According to DoorDash co-founder Tony Xu, the decision was made in part because San Jose is more representative of what the company might expect from other cities it might expand to.
“We chose San Jose because if you look on a map, most cities look more like San Jose than San Francisco,” Xu told me. That means it’s on a grid system that is fairly spread out, with a main thoroughfare or two where businesses and restaurants are, which is loosely surrounded by more residential areas.
DoorDash has raised $2.4 million from Khosla Ventures, Charles River Ventures, David Lee, Paul Buchheit, Andy Rachleff, Russell Siegelman, and Pejman Mar Ventures.