By DEE-ANN DURBIN and MICHAEL LIEDTKE, AP Business Writers
SAN FRANCISCO (AP) — DoorDash is expanding its offerings, adding restaurant reservations and robot deliveries in some U.S. markets.
The San Francisco-based company, already the largest U.S. delivery provider, announced its expansion plans Tuesday, saying it wants to bring even more business to the merchants it works with and stay ahead of ever-increasing customer demand. DoorDash’s total orders jumped 20% to 761 million in the second quarter of this year.
DoorDash’s robots will bring new challenges to the company as it takes on the responsibility for storing and maintaining the devices. But DoorDash Co-Founder Stanley Tang said the company needs more delivery options to help fuel its future growth.
“The shift to autonomy is happening right now, and DoorDash is uniquely positioned to do something like this,” Tang said Monday during an interview at the company’s San Francisco headquarters. “We need to find ways to keep up with the demand. The complexity of the deliveries being made on our platform is increasing too.”
Still, investors appeared lukewarm about the company’s plans. DoorDash shares fell 1% Tuesday.
DoorDash’s plans also threaten other delivery and reservation platforms like OpenTable and Instacart. On Monday, after DoorDash said it would expand its partnership with Kroger to offer delivery from the grocer’s 2,700 U.S. stores, Instacart’s shares fell 10%.
DoorDash said Tuesday that its new “Going Out” tab will let users book tables at restaurants. Reservations will be offered first in New York and Miami, with other cities to be added later this year. In cities without restaurant reservation capabilities, the “Going Out” tab will let DoorDash customers earn rewards and in-store offers.
DoorDash said its DashPass members – who pay $9.99 for free deliveries on most orders – will also get extra perks, like the ability to reserve exclusive tables.
DoorDash signaled its interest in adding reservations with its recent purchase of SevenRooms, a New York company that makes reservation and hospitality management software. DoorDash announced the $1.2 billion purchase in March.
DoorDash said adding reservations and deals helps it deepen its relationship with restaurants and bring them new patrons. During testing in San Francisco, the company found that 80% of customers using “Going Out” visited a restaurant they had never ordered food from before.
DoorDash also said Tuesday it will soon begin providing some deliveries in the greater Phoenix area with an autonomous robot. The robot, which was designed by DoorDash and is dubbed Dot, can reach speeds of up to 20 miles per hour and travel on streets, sidewalks and driveways.
DoorDash has spent the last seven years developing the robot. The company decided to develop its own after finding that other delivery robots on the market, which are mostly designed for short runs on college campuses or urban sidewalks, weren’t capable of operating in the suburban neighborhoods where DoorDash makes many of its deliveries.
The company said it could also use its own data to optimize the robot.
“After 10 billion deliveries, we have data on what works, what breaks and what scales,” said Tang, who leads DoorDash’s autonomy and robotics division.
Dot is bright red and resembles a big baby stroller. It’s 3 feet wide, 4.5-feet tall and large enough to handle up to six large pizza boxes or 30 pounds of cargo.
Tang said DoorDash has already made hundreds of successful deliveries with Dot during the past few months in Tempe and Mesa, Arizona. If things continue to progress smoothly, DoorDash plans to bring Dot to more markets across the U.S. as quickly as possible, Tang said.
DoorDash executives view Dot’s development as the next major step in an evolution that has already seen the company expand from a shoestring operation that was making a few restaurant deliveries in Palo Alto, California, 13 years ago. DoorDash has become a ubiquitous service that now operates in more than 30 countries.
DoorDash has also been testing drone delivery for several years in Australia, Texas and North Carolina. Tang said the company is developing a system that will automatically determine the best mode of delivery depending on the order and where it’s going.
“Our vision is hybrid, human delivery and autonomy working together to expand access to more people,” Tang said.
Durbin reported from Detroit.
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