DoorDash (NYSE: DASH) was notably one of the first food delivery services to reach scale. However, the landscape remains competitive and challenging. In this clip from “IPO & SPAC Show” on Motley Fool Live, recorded on April 11, Motley Fool contributors Jason Hall, Nicholas Rossolillo, and Jose Najarro discuss the crowded delivery platform space and address one of the main issues that consumers face.
10 stocks we like better than DoorDash, Inc.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now… and DoorDash, Inc. wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
*Stock Advisor returns as of April 7, 2022
Jason Hall: I’m thinking about these platforms, these delivery platforms. You have Uber Eats (NYSE: UBER) and DoorDash and several others. You also have the small players, the regional players, the ones that are focused maybe on New York City or San Francisco that have private equity backing, that sort of thing. I think the endgame here is the ones that get to scale and once we get through this race to scale, those are the ones where these business models can really pay off for investors. Is that the right way to think about this?
Nicholas Rossolillo: I think so and, obviously, DoorDash is one of the first ones that reached that scale. That is an important point you bring up, Jason. Obviously, they are profitable using free cash flow but there are all those regional players. Then, you have the Ubers of the world getting into this space as well and I put on the first slide, there is a big risk here that DoorDash has been highly criticized for non-transparent and egregiously high fees that they charge on their platform. Then, you also have companies like Square (NYSE: SQ), Toast (NYSE: TOST), Olo (NYSE: OLO), these software companies that are providing integrations for restaurants to help them take back control of the customer relationship. That’s also a risk, I think, for DoorDash but you’re right. They were the first to reach scale and I think that’s notable. That’s definitely a notable thing for investors to keep a lookout for with this company.
Jose Najarro: I do want to say, with the current risks that you mentioned with all these fees, it seems like every player out there in the food delivery industry is doing that hidden fee stuff. At the moment, it’s not just an issue to DoorDash. It’s just a whole issue to the overall market, the industry as a whole. Hopefully, for the consumers, that gets fixed pretty soon.
Jason Hall owns Block, Inc. Jose Najarro owns Block, Inc. Nicholas Rossolillo owns Block, Inc. The Motley Fool owns and recommends Block, Inc., DoorDash, Inc., and Olo Inc. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
More Stories
Course Weekend Brunch Menu by Archana’s Kitchen
Juicy Tender Oven Pulled Pork
Healthy Peanut Butter Cookies Recipe