DoorDash Allocates Over $50 Million for Driver Gas-Price Relief Amid Rising Fuel Costs

DoorDash announced that it will spend more than $50 million in the second quarter to offset higher gasoline costs for its delivery drivers. The relief program is described as temporary and is intended to counteract a sharp increase in fuel prices that the company attributes to the ongoing conflict in Iran.

Seattle Times

National average gasoline prices reached $4.53 per gallon, a 44 % increase from the previous year, according to the American Automobile Association. DoorDash linked this rise directly to the war in Iran, noting that the higher cost of fuel threatens driver earnings and could affect service availability.

Seattle Times

During the January-March quarter, DoorDash reported 933 million orders, a 27 % year-over-year increase but below analysts’ consensus forecast of 954 million orders. Revenue grew 33 % to $4.0 billion, missing the $4.15 billion estimate. Net income fell 5 % to $184 million, or $0.42 per share, yet exceeded the consensus expectation of $0.36 per share. Research and development expenses rose 30 % compared with the same period last year. The company’s shares gained more than 11 % in after-hours trading following the earnings release.

Seattle Times

Chief Financial Officer Ravi Inukonda explained that the gas-price relief program required the reallocation of capital from other initiatives, including new product development and robot-delivery pilots. He indicated that any extension of the program would depend on identifying additional cost offsets. CEO Tony Xu emphasized that DoorDash remains a small portion of the overall addressable market for delivery services and that continued growth in its core restaurant and retail segment provides a “large runway” for future expansion.

Seattle Times

• “We did have to push out some investments … in order to make room for this,” — Ravi Inukonda, Chief Financial Officer, DoorDash

Seattle Times

• “If we do decide to extend the program, our goal is to find offsets.” — Ravi Inukonda, Chief Financial Officer, DoorDash

Seattle Times

• “We are a tiny fraction of what’s actually available and addressable, which in some sense means that there’s a large runway and opportunity for us to become even better in breed in terms of what it is that we can offer,” — Tony Xu, Co-founder and Chief Executive Officer, DoorDash

Seattle Times

• “And if we can keep doing that, I think we’re going to be just fine.” — Tony Xu, Co-founder and Chief Executive Officer, DoorDash

Seattle Times

DoorDash indicated that the continuation of the gas-price relief program will be evaluated based on the availability of offsetting savings. The company also plans to resume postponed investments in new services, such as restaurant reservations and autonomous delivery, once the program’s financial impact is clarified.

Seattle Times