With consumer spending slowing down, DoorDash is hoping to entice people to keep spending on takeout and other goods with its first credit card.
"Whether it's 32 million users of DoorDash or 15 million DashPass subscribers, even a small fraction of that adopt and are going to be saving hundreds of dollars — we're talking billions of dollars back in the pockets of our consumers — that's one thing that gets us really excited," Keith Yandell, DoorDash chief business officer, told Cheddar News.
Though many in the retail space have warned that people are spending less, DoorDash has been beating analyst expectations on spending. During its most recent earnings report, the company beat the Street's estimates on revenue and provided projections for gross value order that would top expectations for the upcoming quarter.
"Last year this time, I got a bunch of questions about what's going to happen post-pandemic," Yandell said. "Are people still going to use these services that have really become utilities, services like DoorDash? What we saw, in the post-pandemic timeframe that we continue to see in the inflationary time period, is the demand is pretty sticky."
Yandell credited DoorDash with continuing to improve the quality, selection, and price as to why people are still ordering. It added more than 100,000 non-restaurant merchants, ranging from pet products to beauty items, to add convenience, and made other changes to speed up deliveries.
But at the end of the day, users are worried about price especially in budget-conscious times. DoorDash transaction fees went down 8 percent in 2022, and the company wants to continue to lower them.
The new credit card, which was launched in partnership with Chase and Mastercard, is part of the plan to make things more affordable, Yandell said. It offers 4 percent cash back on DoorDash and caviar orders, as well as 3 percent back on other restaurant purchases. Users will also get 2 percent back on groceries, and 1 percent on all other purchases. In addition, card users who spend $10,000 will get a free subscription to DashPass, the company's discount subscription service.
"The goal is ultimately to get to zero (fees), and that's not going to happen overnight," he said. "But we're going piece by piece, trying to make the platform as efficient as possible."