Four Stanford University students walked into a novelty dessert store looking to buy a pack of macaroons back in the fall of 2012—instead, they left with an idea that ignited a multi-million dollar business that has spread across the U.S.
The students had been talking to the manager of the small macaroon store about her difficulty fulfilling pages and pages of delivery orders—with no drivers to complete them. The small company was losing potential revenue because it simply did not have the financial support to hire more workers to complete the influx of macaroon orders in Silicon Valley.
Over the next few weeks, the group of students was motivated to fix the problem. The four interviewed over 200 small business owners all over the Bay Area, all with the same complaint: deliveries are painful. It did not make financial sense for a small company to offer delivery services.
On Jan. 12, 2013, Palo Alto Delivery was born. The four were students by day, delivery drivers by night, delivering food across the Stanford campus to thousands of students, local families, and office workers.
Now renamed DoorDash, the startup is backed by nearly $20 million and received $17 million in venture capital funding by Sequoia Capital last May. DoorDash currently delivers from over 1,000 restaurants in the San Francisco Bay Area and Los Angeles.
“We are helping places ranging from family-owned small business to large restaurants deliver to areas that are underserved,” said Jessica Lachs, the general manager of DoorDash. Lachs was introduced to the Tony Xu, the CEO and co-founder of DoorDash last June, and she joined the company with the hopes of spreading DoorDash and the food delivery business across the U.S.
“Whether it is food, groceries, or consumer products, we are working to send anything to anyone in 45 minutes,” Lachs said.
This past September, DoorDash expanded its services to the east coast, offering delivery services to Boston, Brookline, and Allston/Brighton. DoorDash also hit the streets in Cambridge this past Monday. The Silicon Valley-based company plans to expand to Somerville, Medford, as well as South Boston in the near future.
“Boston is our first east coast city, and we are really excited about bringing our business here, specifically,” Lachs said. “It made sense to come here with the food culture and large student population. We wanted to launch with school resuming this fall.”
DoorDash is the latest delivery service looking to woo customers to become the go-to online delivery service in Boston, with others including Chicago-based Grubhub, Austin-based Favor, San Francisco-based Caviar, Postmates, and Boston-based alcohol delivery service Drizly.
The startup typically partners with popular restaurants that do not normally deliver for a number of reasons—ranging from high insurance costs to a lack of available drivers. DoorDash delivers food from more than 100 of Boston’s top restaurants, including Figs, Cafeteria, Toro, Root, Regina Pizzeria, and Roxy’s Grilled Cheese. According to Lachs, the average delivery time between when an order is placed and when the consumer receives the food is 39 minutes when using DoorDash.
“What’s unique about DoorDash is that we provide something for everyone—from lower-end foods to higher-price points, and vegetarian options to steak restaurants,” Lachs said. “Anna’s Taqueria, Soul Fire BBQ, Alfredo’s, and Otto are some student favorites near Boston College.”
The company operates in a similar manner as ride-sharing service Uber in the sense that drivers can apply to become a “DoorDasher” and work on their own schedules. Drivers must be 18 or older and go through some various regulations. DoorDash currently boasts a fleet of over 2,000 drivers who earn about $21 per hour. The startup employs many students as DoorDashers, who fulfill transactions by car or bike, specifically in dense student areas like Boston and Los Angeles.
“Students are a key target for us, because they tend to be early customers and willing to try things out,” Lachs said. “They tell their friends about us and spread the message of our company, and they have the potential to be ambassadors or Dashers now in Boston.”
To celebrate its Boston launch, DoorDash is offering a free first delivery for customers. Customers can place their DoorDash orders online or through the company’s mobile app. The California startup claims that it is the fastest delivery service due to its “dasher” location technology, which is designed to find the nearest DoorDasher to deliver nearby orders. The service also sends various updates on the status of one’s order.
“The bigger picture for the future of the company is to be able to deliver anything in under 45 minutes,” Lachs said. “Time is our advantage.”
Featured Image Courtesy of DoorDash