If you have ever ordered food on your phone and have seen it traveling on a map towards your home, you have probably used DoorDash. The largest food distribution company in the United States, which was launched as a small student project, has grown.
This blog is the story of how DoorDash started, how it works, how it grows, and what comes next.
From The Idea of a Campus to a Nationwide Company
DoorDash began in 2013 when four Stanford students, Tony Xu, Stanley Tang, Andy Fang, and Evan Moore, decided to deliver food for small restaurants. They first created a simple website called PaloAltoDelivery.com and spread the word by distributing flyers. Later that year, they joined the Y Combinator Startup Program and changed the name to DoorDash.
Their promise was simple: to help local restaurants provide food without appointing drivers or forcing them to create new technology. The idea spread quickly. By 2019, DoorDash had become the number one food delivery company in the United States.
Wanted to Fix The Problem
Restaurants often struggled with delivery as it was expensive and complex. DoorDash developed technology that could match restaurants, customers, and delivery drivers (called “dashers”) in real time. The company saw itself not only as a “food app” but also as a logistics business. A company that resolves the challenge of transferring things from Point A to Point B.
How Does it Earn Money?
DoorDash earns money in some ways. Every time a person orders through the app, the restaurants pay a fee. Customers also pay service and distribution fees when they order. Dashers are paid per delivery and can also receive tips.
The company also offers membership plans, such as DashPass, which allows customers to pay a monthly fee to receive free or discounted delivery. Additionally, restaurants can pay for advertising within the app to appear more frequently in customer discoveries.
Smart Moves That Helped to Grow DoorDash
Two big choices made DoorDash stand out. First, it focused on suburbs, rather than just big cities. Other companies thought that the suburbs would not be profitable, but DoorDash proved them wrong. Second, it expanded beyond the restaurant. Today, customers can order grocery items, convenience items, alcohol, and even household items.
The company also introduced facilities like DoubleDash, which allows customers to order from two places in a single delivery without paying additional fees.
DoorDash by Numbers
In December 2020, DoorDash became public on the stock market with one of the largest IPOs of the year. During the COVID-19 pandemic, when demand for delivery skyrocketed, the company experienced even faster growth. Today, it controls more than half of the American food distribution market.
By 2025, DoorDash continued to increase its revenue for more frequent orders and better distribution efficiency. Its growth story shares some similarities with Instacart’s startup, which also began as a small idea and grew into a household name during the pandemic.
Competitors Keep The Pressure on
DoorDash is a leader, but the competition is difficult. Uber Eats is its most significant rival, while Grubhub still holds a small market share. Recently, Grubhub partnered with Amazon Prime to offer free delivery to Prime members, which accelerated the competition.
To stay ahead, DoorDash invests in membership, partnerships with retailers, and advertising services for restaurants.
Legal Battle on Driver’s Status
The most significant debate around DoorDash is whether the dashers should be considered employees or independent contractors. In California, voters approved Proposition 22 in 2020, which allowed drivers to remain independent while receiving some benefits.
In 2024, the California Supreme Court confirmed this law. For DoorDash, it was a significant win, as it keeps the cost low and preserves the flexible working style that many Dashers prefer. However, critics argue that the drivers deserve more protection.
Why The Restaurant Liked DoorDash?
The small restaurant quickly saw the value of DoorDash. It provided them with an easy way to reach new customers, set up online menus, and start delivering food without needing to hire staff or purchase vehicles.
DoorDash worked closely with the restaurant owners, making their needs and building tools easier by listening to their feedback. Focusing on supporting small businesses, whether from home or small restaurants, helped the company gain confidence and expand rapidly.
The Money Challenge
Food distribution is not a high-profit business. Costs like driver pay, customer support, refunds, and promotions eat into earnings. DoorDash has worked to improve its margin by combining orders, reducing refund rates, and adding new revenue streams such as advertisements.
Nevertheless, keeping customers, restaurants, and drivers all satisfied is a difficult balancing task. If the fees increase too high, people can stop ordering. If the payment falls, the Dashers can leave. Additionally, if the commission increases, restaurants may seek alternative options.
What is Next For DoorDash?
DoorDash aims to become more than just one food distribution app. It aims to be a platform for all types of local shopping, including grocery items, pharmacy items, and household essentials. It is also planning to expand internationally, although this development is still smaller than its presence in the U.S.
The company’s success will depend on how it adapts to changes in regulation, competition, and customer spending habits.
In Summary
DoorDash’s journey shows how a simple idea to help small restaurants deliver food can turn into a huge company when combined with technology and determination. By solving the delivery problems, step by step, DoorDash converted the leading distribution platform in the U.S. from a student project. Its story proves that with the right focus and perseverance, even everyday problems, such as getting dinner delivered to your door, can inspire billion-dollar businesses.
