Personal Finance

A Foolish Take: These 3 Companies Dominate US Food Deliveries

Market share of third-party food delivery services.

Thirty-six percent of American internet users ordered food deliveries from restaurants last year, according to Market Force Information. That market was once fragmented, but according to Second Measure, three companies now dominate the third-party online food delivery market: Grubhub (NYSE: GRUB) , DoorDash, and Uber Eats.

Market share of third-party food delivery services.

Data source: Second Measure via CNBC. Chart by author.

Grubhub became America's largest food delivery service by merging with Seamless and acquiring a long list of smaller rivals, including MenuPages, Allmenus, LAbite, and Tapingo . It also provides nationwide deliveries for Yum! Brands ' Taco Bell. However, Grubhub's market share declined from 50% last spring due to competition from DoorDash and Uber Eats, and it's running out of smaller challengers to acquire.

DoorDash, which was valued at $7.1 billion after its latest funding round, overtook Uber Eats in the second half of 2018 and started offering grocery deliveries from Walmart . Uber Eats, which expands Uber's business beyond its core ridesharing services, partnered with McDonald's to launch the McDelivery service. DoorDash and Uber are both reportedly eyeing IPOs, which would give them fresh capital to counter Grubhub. Tougher competition between these market leaders could also result in lower delivery fees, and that might convince more diners to try these services.

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Leo Sun owns shares of Grubhub. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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