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.

Offer from The Motley Fool: The 10 best stocks to buy now

Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. In fact, the newsletter they run, Motley Fool Stock Advisor , has quadrupled the S&P 500!*

Tom and David just revealed their ten top stock picks for investors to buy right now.

Click here to get access to the full list!

* Stock Advisor returns as of Jan. 31, 2019.

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.

In This Story

GRUB

Other Topics

Stocks

Latest Personal Finance Videos

How Student Loan Refinancing Works

Though it may be a great way to lower monthly payments, not everyone understands the student loan refinancing process. NerdWallet explains it. For more, try our refinance calculator: http://bit.ly/nerdwallet-student-loan-refinancing-calculator

Nov 25, 2019

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More