Business Wars

It's December 2011 in San Francisco. Bastian Lehmann is getting ready to launch his courier app, Postmates. But when he and his co-founders discover people want food delivered, not objects, they pivot to a business already cornered by Grubhub. Meanwhile, 30 miles away in Palo Alto, a business school student called Tony Xu is trying to figure out how to help a small macaroon shop fulfill delivery orders. His solution? DoorDash. Along with UberEats and Postmates, it will help pioneer the gig economy—and change the restaurant business forever.

It's 1990 in Champaign, Illinois, and 15-year-old Tony Xu is washing dishes in the Chinese restaurant his mother manages. He wants to help people like his Mom, but it'll be many years before he hits on his solution for small businesses. Across the Atlantic, Bastian Lehmann forgets his snowboard while moving house. He can't find a way to get it shipped to him cheaply, and the idea for Postmates is born. Meanwhile, Grubhub founders Matt Maloney and Mike Evans have decided local pizza should be as easy to find online as apartments. And eventually, Uber’s Travis Kalanick will recognize that food delivery is the next logical step in his booming transport empire.

It's December 2014, and Grubhub's Matt Maloney is feeling the heat. Competitors are eating away at his market share, so he decides to change direction. Grubhub finally starts delivering food with its own drivers. But will it be enough to outpace the other fast-growing upstarts? DoorDash, meanwhile, struggles to raise funds at a steep valuation. And the company comes under fire for some less than savory business practises. Postmates has cornered the high-end market and Uber Eats expands from an Uber feature to a standalone app. But angry drivers threaten the entire food delivery business model.

It's July 2019. DoorDash is finally bigger than Grubhub, but it's coming under fire for pocketing tips from its drivers. Now DoorDash needs to rehab its image, or risk losing customers to its competitors. When a California proposition threatens to alter how food delivery companies classify their drivers, DoorDash and Uber join forces to fight it. Six months later, the pandemic marks a boon for food delivery companies, but can the boost last?

In the wake of the unexpected jolt of the COVID-19 pandemic, food delivery app businesses are looking for stability and profitability any way they can find it. With Uber’s purchase of Postmates and DoorDash buying Caviar, consolidation has become all the rage. And the apps are diversifying into prescription fulfillment, groceries, and third-party logistics. But the razor-thin profit margins, rising costs of doing business, and withering relationships with labor and restaurants are taking their toll. We’re joined by Preetika Rana, a technology reporter at The Wall Street Journal to discuss how these app companies plan to be the last one standing in the food fight.