Tony Xu was nine years old and mowing lawns for money when his family arrived in Champaign, Illinois from Nanjing, China. He and a friend would take on yards in the neighborhood and charge extra if the customer wanted a pattern cut into the grass, like a checkerboard. His mother, Julie Cao, had been a doctor in China. In Illinois she opened acupuncture and medical clinics. She also worked in restaurants when the clinics were slow. Tony washed dishes in those restaurants. He has talked about watching his mother work in interviews over the years, usually as context for why he cared about building something that helped small businesses stay alive.
The connection between washing dishes at his mother’s restaurant as a kid and building the largest food delivery company in the United States is not a straight line. But it is the kind of background that explains why, when four Stanford students were trying to pick a startup idea in the fall of 2012, Tony Xu was the one pushing hardest toward the restaurant problem.
The Macaroon Shop on University Avenue
In the fall of 2012, Tony Xu was in his first year at the Stanford Graduate School of Business. Evan Moore was his classmate. They were working on a project for a class called Startup Garage, which was exactly what it sounds like: a structured excuse to talk to people about problems and see if anything was worth building.
They were focused on small businesses. Not restaurants specifically, just whatever local merchants were struggling with most. They walked up and down University Avenue in Palo Alto, knocked on doors, and asked owners what kept them up at night. The answers were consistent across a lot of different business types: getting enough customers, having employees show up for shifts, and figuring out how to compete with larger competitors.
Then they walked into a macaroon shop and the conversation changed.
The owner, a woman named Chloe, had a binder on the counter full of delivery orders she had never been able to fulfill. Customers had called asking for delivery. She had written down the orders. She couldn’t act on any of them because she had no way to make deliveries happen. The demand was clearly there. The infrastructure to serve it wasn’t.
Xu and Moore had a moment of recognition when they saw that binder. They called around to a few more restaurants on the way back. Most didn’t offer delivery at all. The ones that did said it was the most operationally painful part of running their business. They were turning away delivery orders constantly. The gap between what customers wanted and what restaurants could provide was enormous, and nobody had built a reliable on-demand solution to bridge it.
Xu reached out to Andy Fang and Stanley Tang, two Stanford computer science undergraduates he had met earlier. Tang had published a book about making money online when he was fourteen, which gave him a certain credibility among people who cared about building things. Fang was a strong engineer. The four of them decided the restaurant delivery problem was worth pursuing.
They built a website that same week. It had PDF menus for eight local restaurants, their phone numbers for placing orders, and a very basic interface. The domain was PaloAltoDelivery.com. They drove the deliveries themselves. They did this in January 2013, before they had any funding, before they had any drivers, before they had incorporated. They wanted to know if people would actually pay for this.
They did.
Y Combinator and the First Real Crisis
They applied to Y Combinator and got in for the Summer 2013 batch, which came with $120,000 in exchange for 7% of the company. They incorporated as DoorDash in June 2013. The name was meant to convey speed and directness, someone dashing to your door.
The product was still very bare. Orders came in, Dashers picked them up and delivered them. The technology was basic and the operational process was improvised. They were doing everything manually and learning what broke.
The first real test came in September 2013 during a home football game at Stanford. Football games bring a lot of people to campus, and a lot of those people, along with fans watching nearby, apparently decided to order food. DoorDash received more orders that afternoon than they had ever handled, probably around a hundred, and they were not ready for any of it.
Every single order was late. Some were over an hour behind. The founders were fielding complaints while simultaneously trying to dispatch drivers who were already stretched thin. Xu later described it as one of the worst days in the company’s first few months.
After the game, the team had a decision to make. They had very little cash left, maybe a week or two of runway. If they refunded everyone, they might run out of money. If they didn’t, they’d have a customer satisfaction disaster on record.
They refunded every order. Then they stayed up all night baking cookies and delivered them to every affected customer before five in the morning, with a handwritten note apologizing for the experience.
The cookie delivery has become a famous story in DoorDash’s history. What it actually demonstrates is a specific thing about how the founders thought about operations: they were not going to let a bad experience stand, even when it cost them money they couldn’t afford to spend. That instinct, that a bad experience needed to be personally corrected by the founders rather than handled through a policy, shaped how DoorDash thought about its logistics problems for years.
The Suburban Bet That Everyone Thought Was Wrong
By 2014, DoorDash had raised a $2.4 million seed round led by Khosla Ventures and a $17.3 million Series A led by Sequoia. They were growing in Palo Alto and starting to expand to San Francisco and other Bay Area cities.
The competitive landscape they were entering looked difficult. Grubhub had been operating since 2004 and was firmly established in dense urban markets like New York and Chicago. Seamless had merged with Grubhub in 2013. Postmates was operating in San Francisco. Eat24 was active. Uber was starting to experiment with delivery. The conventional wisdom was that food delivery was fundamentally a city business, that the economics only worked in dense areas where drivers could complete multiple deliveries per hour and restaurants were close enough to customers to keep food hot.
DoorDash made a decision that most observers at the time thought was wrong. They went to the suburbs.
The reasoning was not complicated, but it required trusting the analysis over the received wisdom. Suburbs had almost no delivery infrastructure. Restaurants there weren’t set up for delivery at all. Grubhub wasn’t there. Uber wasn’t there. If DoorDash could get in first and build relationships with suburban restaurants and suburban customers, they could own that market without a price war.
There were also some secondary advantages to the suburban market that the founders had thought through. Suburban orders tended to be larger on average, because families with children ordering dinner spent more per order than single people in city apartments. Suburban customers also had fewer alternatives, which meant they were less likely to churn to a competitor when one showed up. And suburban restaurants, especially chain restaurants like Buffalo Wild Wings and Cheesecake Factory, were often willing to pay for delivery because it opened up a meaningful new revenue stream for them.
As DoorDash signed deals with national chains in suburban areas, those chains ran their own marketing campaigns advertising that their food was now available for delivery. DoorDash got brand awareness in suburban markets as a byproduct of the restaurant partners’ own advertising.
This was not obvious genius at the time. The company struggled to raise its Series B in 2015. Xu has said publicly that they had term sheets pulled at the last minute during that round and came close to running out of money. Investors were skeptical of the suburban strategy. On-demand delivery was seen as a city product, and the general sentiment toward on-demand startups in 2015 had soured after a period of overinvestment in the space.
They got the Series B done eventually and kept going.
How DoorDash Actually Operates
One thing that distinguished DoorDash from some competitors was how seriously the founders took the logistics side of the business.
Xu did not think of DoorDash as a restaurant app. He thought of it as a logistics company that happened to start with restaurants. The target, which he stated publicly in early interviews, was to become the world’s largest software-enabled logistics company, capable of moving anything, not just food. The restaurant focus was a starting point because food was a product people needed delivered multiple times a day, which generated the order density needed to build a reliable delivery network.
The founders were personally doing deliveries in the early days for the same reason they had been personally doing them since the PaloAltoDelivery days: they wanted to understand what was hard about it from the driver’s perspective, not just from the customer’s perspective. They showed up at restaurants as Dashers. They waited in lines. They dealt with wrong orders. They drove across suburban neighborhoods looking for addresses. They came back to the product and made changes based on what they had learned.
DoorDash built machine learning models to predict how long each restaurant would take to prepare an order, so Dashers could be dispatched at the right time rather than arriving too early and waiting. They optimized routing so Dashers weren’t driving inefficient paths. They built tools for restaurants to manage their menus and adjust their hours in real time. The logistics technology was not the visible product, but it was what determined whether the delivery arrived in thirty minutes or fifty.
DashPass launched in 2018 as a subscription service for frequent users. For a monthly fee, subscribers got free delivery on qualifying orders. The logic was borrowed from what Amazon Prime had demonstrated in e-commerce: customers who paid a subscription became more loyal and ordered more frequently. If a DashPass subscriber was going to pay $9.99 per month regardless, they had an incentive to use DoorDash enough to justify the cost. By 2024, DashPass had over 15 million subscribers, and those subscribers ordered substantially more often than non-subscribers.
The 2019 Inflection and Passing Grubhub
By early 2019, DoorDash had overtaken Grubhub as the largest food delivery platform in the United States by market share. This was not a slow or quiet transition. Grubhub had been the dominant player for years and had the better-known brand in most cities. DoorDash had been building in suburban markets that Grubhub didn’t take seriously, and by the time Grubhub noticed the threat, DoorDash had established strong enough customer relationships in enough markets to defend its position.
The ranking flipped partly because DoorDash had expanded aggressively in suburban America while Grubhub stayed focused on its urban strongholds, and partly because DoorDash’s restaurant partnerships with national chains had given it distribution and brand recognition in markets where Grubhub had little presence.
At that point DoorDash considered deals with both Postmates and Uber Eats, according to Fortune. The conversations didn’t result in anything. DoorDash decided it didn’t need them.
Then the pandemic happened.
The Pandemic and What It Did to the Market
When COVID-19 shut down restaurant dining rooms in March 2020, what had been a strong but competitive food delivery market became something much more concentrated.
People who had never ordered delivery before started ordering it constantly. People who lived in cities moved to suburbs, often in a hurry, which pushed demand into exactly the market DoorDash had spent years building. Restaurants that had resisted delivery as too operationally complex signed up in weeks because it was the only way to keep any revenue coming in.
DoorDash’s business more than tripled in 2020. Revenue went from $885 million in 2019 to $2.88 billion in 2020, a 226% increase in a single year. Market share went from under 35% to over 50% by year’s end.
Matt Maloney, the CEO of Grubhub at the time, later told Fortune that he had a front-row seat to what happened: “I kind of view their whole long bet on suburban delivery as, ‘Holy shit, I had a front row seat to witness this miracle.’”
The suburban strategy that had been mocked internally and by investors for years had positioned DoorDash perfectly for a pandemic that pushed millions of Americans out of cities and into suburban homes where DoorDash was often the only delivery option that worked reliably.
DoorDash went public on the New York Stock Exchange on December 9, 2020, under the ticker DASH. The IPO raised $3.37 billion. On the first day of trading, the stock opened at $182 and ran as high as $195, an 86% gain from the $102 offer price. The valuation on the first day hit around $70 billion.
Three of the four founders, Xu, Fang, and Tang, became billionaires overnight. Evan Moore, the fourth co-founder, had left the company after 17 months and had moved on to other things. He later became an investing partner at Khosla Ventures.
After the IPO: Building Past Food
The company that went public in December 2020 was primarily a restaurant delivery platform. The company that exists today is something considerably broader, and that expansion was by design.
In November 2021, DoorDash announced the acquisition of Wolt, a Finnish food delivery company with strong positions across Europe and the Middle East. The deal valued Wolt at approximately $8 billion and gave DoorDash a meaningful international footprint it had lacked. Wolt operated in 23 countries, mostly in Europe and Central Asia, with particular strength in Scandinavia, Eastern Europe, and Israel.
The Wolt acquisition was important for a specific strategic reason: DoorDash’s dominance in the United States did not translate to global leadership. Internationally, Uber Eats and Deliveroo had head starts in many markets. Buying an established player rather than building country by country was faster and less expensive in terms of both money and time. By 2023, DoorDash had grown Wolt’s subscriber base significantly and reported over 30% MAU growth in its international markets year over year.
On the product side, DoorDash pushed beyond restaurant food aggressively. Grocery delivery, convenience store delivery, alcohol delivery, pet food, pharmacy items, and household goods all came onto the platform. The company signed partnerships with Walmart, Walgreens, PetSmart, and other retailers, turning DoorDash’s Dasher network into a general-purpose last-mile delivery service rather than just a food delivery service. DashMart, a company-owned convenience store concept designed for delivery, launched in 2020 and expanded to additional markets.
The advertising business developed into a meaningful revenue line. Restaurants and brands could pay for sponsored placement in DoorDash’s app, and by late 2024, that advertising segment was running at a $1 billion annual rate. This was a high-margin business that didn’t require additional Dashers or deliveries, it just required DoorDash to have enough consumers on the platform that advertisers cared about reaching them.
DashPass continued growing. From 15 million subscribers in 2023, the program expanded to 26 million by some estimates by early 2026, and was extended through partnerships with Chase credit cards, Lyft, and other consumer brands that bundled DashPass access as a benefit.
The Driver Controversy That Followed the Company
No account of DoorDash is honest if it skips the part about the Dashers.
The company has faced consistent legal and ethical criticism over how it treats the contractors who actually make the deliveries. In 2017, a class-action lawsuit was filed claiming DoorDash was misclassifying delivery drivers as independent contractors rather than employees, which would have entitled them to minimum wage, overtime, benefits, and other protections. A tentative settlement in 2022 involved DoorDash paying $100 million total, with around $61 million going to over 900,000 drivers. That averaged out to about $130 per driver.
The same year that settlement was reported, Tony Xu received a compensation package valued at approximately $413 million, which Gizmodo pointed out in coverage of the settlement, making the comparison between what the drivers received and what the CEO received fairly stark.
In January 2020, reporting revealed that DoorDash had been using customer tips to offset the baseline pay it owed drivers rather than adding the tips on top of base pay. If a customer tipped $5 and DoorDash had guaranteed the driver $7 per delivery, DoorDash would pay $2 and count the $5 tip toward the $7 guarantee. The driver got $7 either way, but DoorDash pocketed the tip instead of passing it through. The company changed the policy under public pressure.
Separately, DoorDash was criticized for years for not showing Dashers the full tip amount before they accepted a delivery, meaning drivers couldn’t factor tips into their decision about whether a particular delivery was worth the distance and time. This was addressed but slowly.
These issues are not unique to DoorDash, Uber Eats and Instacart have faced similar criticism around gig worker classification and pay, but they have followed DoorDash more persistently because DoorDash is the largest player in the market. The company’s legal history includes additional disputes over antitrust price manipulation, listing restaurants without permission, withholding sick time, and a data breach in 2019 that exposed information for 4.9 million customers, workers, and merchants.
The business grew despite all of this, which reflects something real about how delivery consumers and merchants make decisions. They chose the platform that was most reliable, most available, and covered the most restaurants, and for most Americans outside of major cities, that was DoorDash.
Where It Stands
By the end of 2024, DoorDash held approximately 60.7% of the US food delivery market by consumer sales, ahead of Uber Eats at 26.1% and Grubhub at 6.3%. That’s not a close race. In Q1 2025, the company reported $3.03 billion in revenue, up 20.7% year over year, and posted a GAAP net income of $193 million, its first sustained period of profitability after years of losses. Marketplace Gross Order Value hit $23.1 billion in the quarter.
DoorDash also acquired Deliveroo in late 2025, the UK-based delivery platform that had been operating in Britain and several other markets. That deal gave DoorDash a major presence in the UK, the largest English-speaking food delivery market outside the United States, and put it into direct competition with Uber Eats across Europe in a way the Wolt deal alone hadn’t fully accomplished.
Tony Xu still runs the company. Andy Fang is still CTO. The company debuted on the Fortune 500 in 2024 at number 443.
The four founders who built the first version of the product out of a Stanford classroom project had made something that didn’t exist before: a functional, at-scale on-demand delivery network covering most of the United States, including the parts of the country that every competitor had decided weren’t worth serving. The business was built in those overlooked places, one suburban neighborhood at a time, while larger and better-funded competitors fought over dense cities and left the rest of the country alone.
When the pandemic hit and half the country suddenly needed food delivered to their homes, DoorDash was already there.
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