DoorDash Launches New Initiatives to Support Black Owned Businesses

Last week DoorDash announced its plan to launch new initiatives targeted towards helping Black businesses. The initiatives include entering a partnership with Kiva, a nonprofit financial organization to help small Black-owned businesses in need of capital. Through this partnership, DoorDash will match loans for Black-owned businesses.

To fund the loan program with Kiva, the restaurant delivery service provider has created a $150,000 revolving loan fund. Typically, the Kiva business loan provides borrowers the option of taking starting capital loans at zero percent interest rates, with no additional fees.

In addition to its loan partnership program with Kiva, DoorDash will also launch another feature still targeted at supporting Black entrepreneurs and Black-owned restaurants across the country. The company will offer free delivery to its merchant partners, as well as provide additional resources for them.

“We consider this commitment to supporting Black communities an ongoing effort that demands action through our product, our voice, and our resources. In addition to donating $500,000 to the national chapter of Black Lives Matter last month, we also created a $500,000 fund to be directed by the Black@DoorDash Employee Resource Group (ERG)… We hope you continue supporting Black-owned restaurants and businesses in your communities. We will continue to use our platform, voice, and resources to make progress together,” the company wrote in a blog post.

DoorDash has also launched in-app features that will make it easier for customers to also support local Black-owned businesses and Black entrepreneurs. Customers or individuals interested in this initiative can visit doordash.com/black-owned.

“With the goal of creating a platform that reflects the communities we serve and to reduce barriers to entry for Black-owned businesses to partner with DoorDash, beginning today and continuing through the end of this year, independent Black-owned restaurants in the United States and Canada can sign up for free with DoorDash and Caviar and pay zero commissions for 30 days. This is not a deferral of fees, nor will merchants be asked to pay anything back,” the company wrote.

‘DoorDash Delayed IPO Could Turn Out Impressive,’ says Experts

DoorDash has seen massive growth in its company and operations at large due to the novel coronavirus. The restaurant-delivery service is a leader in its industry and currently ranks No. 12 on CBNC’s 2020 Disrupter’s 50 lists.

Before the coronavirus pandemic went viral at the beginning of the year, DoorDash filed for an initial public offering (IPO) but was delayed as a result of the impact of the pandemic. Since June this year, many IPOs have resumed and appear to have done better than expected. The same is hoped for the delayed DoorDash IPO. Experts suspect that the company’s stock could hit the markets this year.

Doordash IPO plan

There have been talks about whether or not DoorDash stock will be public with many ongoing consolidations in the food market. The most popular merger is seen between GrubHub and Just Eat Takeaway, both companies recently agreed to a $7.3 billion deal, which came after the merger discussions between GrubHub and Uber failed.

Uber on the other hand, recently entered a new merger deal with GrubHub’s rival, Postmates at $2.65 billion. Uber’s food delivery company, Uber Eats has been growing at a fast rate, with its revenues up 52% in the last quarter.

The food delivery market has been in high demand over the last few months, due to social distancing restrictions. Recently, DoorDash secured a round of funding of $400 million from total funding of $2.5 billion. Firms like Fidelity Investments and T. Rowe Price have also indicated an interest in participating in the other rounds. All these build-ups towards a successful IPO, and hopefully it happens this year.

‘Taking the markets’

Like the background story of many successful companies, the startup stories involved personal dissatisfaction with a particular service and the need to do something about it. DoorDash founders, Tony Xu, Andy Fang, and Stanley Tang probably didn’t have enough restaurants to deliver food to their Stanford dorms. The team, therefore, decided to build a platform to connect restaurants and their customers, through independent drivers like Lyft (NASDAQ: LYFT) and Uber (NYSE: UBER).

At the early stages of putting the company together, DoorDash had some challenges such as raising reasonable amounts of venture capital. Its founders also faced lawsuits filed against them by food chains like In-N-Out Burger for trademark infringement and other issues.

There were also suits filed by the company’s drivers stating that they were wrongly classified as independent contractors, whereas, the nature of the job classified them as employees. The company came under fire after its tipping policy was revealed, which stated that the company first received customer tips and would be applied against the minimum order allocation, and not directly to the delivery workers.

Against all odds, the company has managed to gain a strong presence in the secondary markets and has become a leader in the US market. Its network includes more than 5,000 cities across the country, with 310,000 restaurants in its network. Some of the restaurants in the company’s network include Mcdonald’s (NYSE: MCD), Chick-Fil-A, and Chipotle Mexican Grill (CMG).

DoorDash also uses cutting edge technology, making use of heavy AI and machine learning to carry out its operations. This has enabled the company to solve complicated logistical problems that arise from time to time.