During the COVID period, consumers relied heavily on home-delivery of groceries and prepared meals. Competition resulted in an ever-decreasing delivery time with DoorDash offering grocery order completion in a limited downtown area within 15 minutes.
The service was possible to be offered by DoorDash and other providers in 2021 since delivery personnel worked as independent contractors operating from a central warehouse with 2,000 SKUs.
In 2022, DoorDash adopted an hourly-pay model with benefits for delivery personnel that imposed a higher cost per delivery. Concurrently demand for rapid delivery declined with the lifting of COVID restrictions and with many consumers becoming concerned over price and restricted selection. From late 2022 onwards it became apparent that the model used by DoorDash to deliver groceries did not provide an adequate margin, especially with the need for discounts to attract new consumers. Accordingly the 18-months program was cancelled.