How has Doordash's cost structure evolved since 2022?

DoorDash's cost structure has undergone significant changes since 2022, reflecting the company's strategic adjustments to optimize profitability amid challenging economic conditions and intense competition. Here are the key aspects of DoorDash's cost evolution: 1. **Rationalization of Dasher Costs**: The company has seen a decrease in dasher costs, which is a positive development for the take rate outlook. This is likely due to improved operational efficiencies and better management of the workforce. 2. **Streamlining of Operations**: DoorDash has been working on reducing its operating expenses, including layoffs to cut costs. The company announced laying off 1,250 corporate employees in November 2022, which is a significant move to reduce overheads. This workforce reduction is expected to provide relief in the fiscal year 2023. 3. **Menu Price Appreciation**: Despite a slowdown in order volume from Core Dash, the average order value (AOV) growth remains positive, driven by menu price appreciation. This is a strategic move to offset inflation pressures and maintain revenue growth. 4. **Investment in Efficiency and Innovation**: DoorDash has been investing in areas like technology and process innovation to improve efficiency. For example, the company has been exploring drone deliveries in partnership with Wing, a subsidiary of Alphabet. These investments are crucial for maintaining a competitive edge and managing costs in the long term. 5. **Transition to Profitability**: DoorDash has made substantial progress toward profitability, narrowing its net loss to $558 million in 2023, down from previous years. This indicates a strategic shift toward financial prudence and efficiency. In conclusion, DoorDash's cost structure has evolved from one of high expenses and losses to a more streamlined and profitable operation, driven by strategic cost management, menu price adjustments, and operational efficiencies.