DoorDash Adds New Pricing Scheme; Needham Calls It a Buy By Investing.com

By Christiana Sciaudone

Investing.com — DoorDash Inc (NYSE:DASH) rose 6% after announcing new pricing and getting a buy rating as Needham initiated coverage.

Uber (NYSE:UBER) also got a buy, but was little changed. 

U.S. local restaurants will have a choice of three different delivery commission price points, starting with a 15% option. DoorDash is also lowering pickup commission costs to 6% and making storefront, a commission-free online ordering product, free. 

“There is a massive, increasingly digital opportunity for small restaurants, and we believe that when we work together, we can help them capture more of that market in a post-pandemic world––in-store, online, through a third-party partner, or any combination of these three,” said Chief Operating Officer Christopher Payne in a statement. “Today, we are changing how we do business to provide more choices, and better choices, for restaurants. 

Meanwhile, Needham sees DoorDash continuing to lead in its industry.

“We expect DASH to leverage its leadership position in restaurant delivery, likely solidified by the pandemic, to become one of the leading, horizontal, on-demand, last-mile fulfillment providers in North America,” Bernie McTernan wrote in a note, according to StreetInsider. “Survey results suggest delivery adoption gains during the pandemic should be sticky.”

The analyst expects DoorDash will be able to deliver all goods consumers need within an hour, have an expiration date, and/or are produced by a local vendor.  

Uber should benefit from recent acquisitions and expansion into grocery and alcohol. 

Delivery, of course, has become an integral and frankly non-negotiable part of our lives thanks to the Covid-19 pandemic that forced us to lock down and stay home for what seems like forever. Demand for the convenience of ordering dinner with a click and having it delivered to your door is expected to last beyond the pandemic.