DoorDash: Re-Inventing Last-Mile Logistics ‘’America is the land of the free and the land where you never need to leave your house. No item is too trivial to be hand-delivered into your home, like an emperor.’’ Comedian Ronny Chieng, in 2019. On the surface, DoorDash seems expensive at 17x LTM Sales with difficult comps ahead, a seemingly unjustifiable price based on traditional valuation techniques. But the right way to look at DoorDash is by focusing on DashPass, the high-margin subscription offering that allows consumers to order and receive any good in their city within minutes with free delivery. The offering has parallels with Amazon Prime and increases customer stickiness.
How do you make money if the revenue per order on a dash subscribtion is $2.50? Delivery cost per order must be at least $3 + overhead/support