DoorDash, Chasing $3 Billion IPO, Is a Powerful Ally and Foe to Restaurants
America’s largest food delivery app was a lifeline in the pandemic, restaurant owners say, but it came at a high cost.
When the coronavirus hit, restaurants faced a sudden choice: Figure out how to survive on takeout and delivery, or close. For many owners, staying afloat meant allying themselves with the most popular food delivery app in the U.S., DoorDash. “We were in a chokehold,” said Roni Mazumdar, who runs several Indian restaurants in New York City.
Delivery allowed Mazumdar to keep selling biryani and butter chicken but at a steep cost to his business. When patrons order through DoorDash Inc., Mazumdar has to fork over 24% of the sale. “Doing delivery out of conventional restaurants is not a sustainable model,” said Mazumdar, whose flagship restaurant in Queens is called Adda Indian Canteen. (The name roughly translates from Hindi to “a place where people hang out.”)