Your interview with the DoorDash chief executive Tony Xu (“DoorDash ready to sprint for growth”, January 3) raises important questions about the future of investment in restaurant delivery and the distinct role of DoorDash as the second-largest global player after Meituan.
Investment originally went into the sector on the basis of growth at any cost. Then it went through a phase of supporting existing models. Now, as DoorDash starts to generate significant free cash, the question of where to invest that cash becomes crucial. But the options outlined by DoorDash are uninspiring.
The company cites expansion into countries like Iceland and Luxembourg (respectively the size of Cincinnati and North Dakota) and diversification into similar markets such as groceries (which are nothing new for DoorDash though, like Deliveroo, it may have spied an opportunity in providing rapid delivery for DIY and toys).
So what is it to do? Surely attention is turning to acquisition? The world of delivery is global, with similar business models, practices and concerns in all countries — and many companies are struggling to find the magic spark of profitability.
Surely this provides an enticing opportunity for a company that has shown how to generate free cash?
Peter Backman
Author, ‘Restaurants Also Serve Food’
London N3, UK
