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In a move to compete with Amazon and Instacart, DoorDash has announced it has launched a grocery delivery service. As reported by The Verge this will start with selected stores in the Midwest and California.
This news comes as a welcome distraction for DoorDash. Recently the company has run into trouble over its California business model.
Prior to this, the company, alongside the likes of GrubHub and Uber Eats got caught up in a controversy over the fees it charges restaurants. This culminated in some cities placing caps on the fees delivery services can charge.
DoorDash introduces grocery delivery service
This move also follows DoorDash’s expansion into convenience stores. It also introduced its own virtual store for snacks and other over-the-counter goods.
The companies DoorDash is working with are Smart & Final, Meijer, Fresh Thyme, and Hy-Vee, with Smart & Final. The company hopes to expand this over time but this is the starting point.
DoorDash will also only delivery to the California customers in the Bay Area, Los Angeles, Orange County, Sacramento, and San Diego. Other areas where this service will roll out are in Chicago, Cincinnati, Detroit, Indianapolis, and Milwaukee.
However, these customers will only have access to Meiher and Fresh Thyme. The hope is to add Hy-Vee stores in the near future.
New system powered by DoorDash Drive
The key to this system is DoorDash Drive. This is the company’s backend delivery platform which it sells to existing chains such as Walmart. DoorDash also has committed to these deliveries being as quick as its standard meal orders.
DoorDash allows restaurants and grocery stores to create their own delivery service through this platform. The company says this is what will power its new service. The same underlying technology will be what brings grocery delivery to users.
DoorDash has branded this new system in a way that differentiates itself from Amazon Fresh and Instacart-style delivery. The company wants customers to see these orders like takeout in that it will not need scheduled time slots.
“DoorDash will be available on an on-demand basis — that means no scheduling required” announced the company. DoorDash is working with its contract drivers to achieve this. However, unlike Instacart they will not be the ones actually doing the shopping.
That will be done through a third-party firm that will hire part-time and full-time employees to work at the store. This is how DoorDash can promise short delivery times compared to its competitors.
DoorDash has incorporated the new service into its subscription model. By paying $9.99/month you get access to DashPass. This allows you to get free delivery.
Currently, DoorDash is the largest meal delivery platform in the US. This is largely down to its coverage across the country compared to competitors. The company will hope that by adding this service to its platform the platform can continue to grow.