US food delivery service DoorDash expands to Sydney

Two months after entering the local market with food delivery services in Melbourne, DoorDash has expanded to Sydney and now covers more than 40 percent of the Australian population it says.

Launched in the US in 2013, the platform is the market leader in America with 35 percent market share. But it has a long way to go to catch up with the major players in Australia – UberEats, Deliveroo and Menulog – which have had a significant head start in the much smaller market.

DoorDash says it has partnered with more than 2000 local restaurants, including major QSR chains, such as Carl’s Jr, Nandos, Subway, Grill’d, Crust and Oporto, which is giving away 10,000 free burgers to customers in Sydney to mark the launch on Tuesday. It also offers in-store pick-up for hundreds of restaurants.

DoorDash aims to grow its presence in Australia by targeting customers in the suburbs, not just city centers.

“The unique challenge we’ve sought to solve is not only offered great selection and service in urban environments but suburban ones as well,” Thomas Stephens, DoorDash’s general manager in Australia said.

“It’s an incredible opportunity, as it’s where the vast majority of Australian’s live, and one we’re excited to connect.”

But the platform also has faced criticism for what some call an aggressive expansion strategy. DoorDash had signed up restaurants to the platform without their permission.

The platform allows customers to order from restaurants that haven’t signed up to DoorDash, with restaurants often finding out an order has been placed only when a delivery rider shows up to collect it.

Stephens said the platform is acting as a “courier service” in these instances, and said restaurants can request to be removed from the platform.

But this doesn’t match up with the “restaurant-led approach” that supposedly differentiates DoorDash from its competitors.

“We’re differentiated from our peer group because of our restaurant-led approach, meaning we offer the most comprehensive suite of services to help bring restaurants online and drive incremental in-store sales,” Stephens said.

Deloitte estimates online food delivery in Australia will reach $1.3 billion this year. According to Stephens, less than 10 percent of food sales outside of pizza are delivered currently.