# Why There Are Clear Winners in the Restaurant Delivery Wars
Mystery shopper data from Intouch Insight reveals differences between DoorDash, Uber Eats, and Grubhub in terms of service, pricing, and speed.
Joanna Fantozzi | September 19, 2024
Consumers often view third-party delivery as a monolithic entity. Whether you open the DoorDash, Uber Eats, or Grubhub app, as a customer, your experience is largely similar: browse the application to find desired food options, place an order quickly, and prepare for additional service fees and charges. However, in reality, DoorDash holds approximately 67% of the delivery market share, with Uber Eats lagging far behind in second place, followed by Grubhub.
Despite its significant lead in market share, does this also mean that DoorDash offers a better customer experience? In many ways, the answer is yes. According to Intouch Insight’s mystery shopping data, which collected experiences from 300 orders across the three major delivery platforms, DoorDash offered more promotions, delivered food to the correct address more often, and delivered the right food more frequently.
While the three services were similar in most categories studied, DoorDash significantly outperformed in delivery times. The average DoorDash delivery time was 26 minutes and 24 seconds, compared to Grubhub’s 35 minutes and 49 seconds and Uber Eats’ 38 minutes and 4 seconds, which is nearly 50% longer than DoorDash’s average.
Overall, 90% of mystery shoppers were satisfied with their DoorDash delivery experience, while satisfaction scores for Uber Eats and Grubhub stood at 87% and 79%, respectively.
DoorDash’s dominant position in the delivery wars may be straightforward. While Uber is a larger company, its primary revenue streams are divided into two main categories (ride-hailing services and food delivery), whereas Grubhub lacks the resources of the other two companies.
“When people hear Uber, they automatically think of ride-sharing,” says Michael Schatzberg, co-founder of Branded Hospitality Ventures. “DoorDash is purely a food delivery service, so from a marketing standpoint, DoorDash has an advantage because it focuses solely on food delivery. Grubhub dominated the New York City market when they were Seamless, but they encountered many financial issues. Now, everyone associates DoorDash with food delivery. They have more funds for advertising. You see their ads everywhere.”
While market share does not necessarily correlate directly with customer satisfaction, Intouch Insight’s survey clearly indicates a connection. Jim Sanderson, restaurant research analyst at Northcoast Research, believes they are related.
“Having the frequency and volume of orders like DoorDash can drive efficiency and accuracy because it creates a virtuous cycle,” says Sanderson. “The more orders there are, the more deliveries the company can offer to drivers, better drivers lead to better execution as they get well-compensated.”
Sanderson noted that DoorDash even began piloting an initiative in Austin, Texas, moving away from the independent contractor model. An independent LLC hires and employs drivers who exclusively handle DoorDash orders. By providing fixed schedules and guaranteed pay based on delivery quality rather than quantity, Sanderson says this incentivizes drivers to improve service quality.
“Third-party food delivery provides valuable services, but they are far from free,” says Steve Greer, Chief Marketing Officer of Urban Plates. “Urban Plates passes some costs charged by third-party food delivery companies because we cannot absorb these costs. If the delivery company reduces their commission, we would pass those savings on to end users. However, currently, delivery companies focus on getting restaurants to discount so that they can offer more value to end-users… This seems to be one of DoorDash’s priorities.”
DoorDash confirmed that it has been experimenting with different driver compensation structures, such as the Direct Employment for DashMart Couriers program launched in 2021 and the “Hourly Earn” option introduced in 2023, which offers guaranteed hourly pay instead of task-based payments.
Another way delivery services are speeding up is by expanding into other sectors like grocery stores and convenience stores. For example, DoorDash has an exclusive partnership with Ulta Beauty, making it the only one among the three major food delivery companies to offer Sephora product deliveries under its new beauty category.
“The more they do, the more they mimic Amazon’s model, which will enable them to create efficiencies in driver dispatching,” says Sanderson. “If I were a DoorDash driver, I might need to visit a hardware store, pharmacy, grocery store, and then a restaurant within two miles to pick up and deliver orders. I could complete all four deliveries within an hour, providing me with very good compensation.”
The issue with multi-sector collaboration is that drivers may compromise quality in pursuit of efficiency when delivering multiple orders from various restaurants and retailers. For example, delivery temperature was one category where DoorDash did not lead in the study. Uber Eats drivers delivered food at the correct temperature 92% of the time, compared to 90% for DoorDash and 89% for Grubhub. Intouch Insight noted that if drivers pick up customer orders first before delivering other orders, this could significantly impact service quality, including delivery speed and customer satisfaction. Surprisingly, despite Uber’s high score in food temperature, its app is most likely to complete other deliveries before the customer’s order. On average, 12% of delivery drivers across all apps use this efficiency strategy.
In the post-COVID-19 delivery era, DoorDash President and COO Prabir Adarkar says it’s more important than ever to balance speed, efficiency, and quality. For example, DoorDash provides instructions for delivery drivers to help them find customers’ homes so they don’t solely rely on maps if addresses are particularly difficult to locate. Previous customers can see photos of their home, ensuring the driver delivers to the correct location (which may explain why DoorDash achieves 99% accuracy in location).
Regarding food temperature, Adarkar says DoorDash solves this issue by algorithmically matching the best delivery drivers. For instance, if a driver is delivering ice cream, they won’t match that order with a pizza order unless the driver has separate insulated bags to ensure the ice cream doesn’t melt.
“Unfortunately, there’s no silver bullet here,” Adarkar says. “If we have 7 million orders daily, most don’t result in issues. But that one-in-a-million ‘bad order’ happens at least seven times a month. So, there are learning opportunities every day.”
Apart from food temperature, the only area where DoorDash did not stand out in this study was delivery fees. On average, Uber Eats has the cheapest delivery fee but the most expensive service fee. Conversely, Grubhub charges the highest delivery fee but offers the lowest service fee. DoorDash’s fees are mid-range at $2.22 for delivery and $3.63 for service.
Adarkar says they help reduce costs for consumers by encouraging customers to join their premium service DashPass and incentivizing restaurants to offer discounts on the app while keeping menu prices low.
“The rich data we use helps us make other decisions, such as reducing driver wait times for food preparation,” Adarkar says. “This is an example of our data optimization system that actually creates efficiencies and savings, which we can further invest in making DashPass cheaper and lowering your costs.”
Despite being the primary platform in food delivery, DoorDash is far from becoming a default app like Amazon or Google in their respective fields. Sanderson notes that a delivery app could become more competitive through strategic partnerships, such as Grubhub’s new partnership with Amazon Prime and Uber’s collaboration with Instacart, allowing Grubhub customers to order meals via Amazon and Uber customers to order deliveries via Instacart. Of course, DoorDash is also continuously building partnerships, especially in retail and grocery sectors.
Even though Grubhub lags behind its competitors in market share according to this study, it continues to add features beyond the new Amazon partnership to attract customers and improve their experience. Grubhub has just started offering premium delivery services at better prices for customers, similar to Uber’s priority pickup option for ride-hailing services.
As Grubhub and Uber Eats continue announcing new features and partnerships, DoorDash will not relax despite its current lead position in the market.
“DoorDash will keep pushing like they always have, perhaps starting with promotions to attract traffic,” Sanderson says. “It’s still a very promotional environment. I still think it’s an all-out battle. We have three major players with deep pockets competing to maintain or expand their market share gained during COVID-19.”
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Source: Nation’s Restaurant News
