Why did Grubhub lose to DoorDash and Uber Eats? DoorDash's market cap is almost 100x this deal, and Uber is twice that.
GrubHub partnered with Amazon. Amazon Prime now includes a GrubHub+ account.
I have Prime, but have yet to use GH+, but that's more because I just stopped getting food delivered in general. Not because of the price (I used DD and had the DashPass which is very much worth it if you get at least 2 deliveries/month), but because I started getting deliveries with missing items. When that happens, they won't offer to do another delivery, they'll just either refund the item or I can go pick it up. Both options defeat the purpose of ordering delivery. I either don't get my food, or I have to leave the house.
Doordash prioritized selection, they did online ordering even when restaurants didn't want it. Eventually the demand was high enough that restaurants adapted. Grubhub focused on the traditional take out restaurants. Doordash also mixed in multi-delivery to handle mixed alcohol/food purchases.
Beyond this, tech always follows a power law distribution in returns. Doordash is the number one player, and as such will be about 10x bigger than the next runner up. How much of this is network effects/first preference vs. manufactured return is anyones guess, but most people do not want to spend time price matching doordash/grubhub on orders - so whoever has the bigger network/more customers will get the most folks.
I have no idea if this remains true and I'm not suggesting this is why Grubhub failed; I'm asking.
However, I wouldn't be surprised if their roll out involved capturing businesses that already offered delivery drivers until they had a critical mass of drivers in the region or something.
May be regional. I'm in the Bay Area.
- the leadership during the peak of competition for mindshare in the space was exceptionally weak and overconfident. the grubhub/seamless merger led to a completely split company culture between NY and chicago.
- when they were on top, they were a shitty company with scummy practices (even for the space) that made restaurants very skeptical of them specifically. grubhub effectively ran like a protection racket. they bought up tons of "menu pages" websites and restaurant listing sites and launched fake websites to overtake the online presence of grubhub restaurants (including replacing their phone numbers in google summaries with voip numbers, calls through which restaurants were billed an "order origination" premium for.) they broadly resisted the desire of their restaurants to share ownership of their customers (or even be able to determine who their customers were.)
- they completely lacked the ability to plan long-term or even guess the consequences of any action they would take and would do things like "suddenly, without warning restaurants, offer a 50% off deal on lunch all across new york city," leading to huge numbers of canceled and delayed orders and further eroding their public perception.
- they were already public by the time that uber eats, doordash, and postmates were really aggressively entering the food delivery space and thus had to grow and ship with realistic constraints instead of burning investor money to disrupt in hopes that they would be profitable.
probably a million more reasons beyond that, but just off the top of my head a few ways the ball was dropped/the deck was stacked against them.