DoorDash’s NYC 15-minute delivery makes a quick exit

DoorDash’s 15 minutes in New York are up, as the company officially ends a test program that offered 15 minute delivery in the city.

Back in 2021, it seemed like everybody was trying to launch into the fast grocery delivery business. Gorillas, a European startup, Jokr, Fridge No More, Buyk, Getir, Food Rocket, Gopuff and, yes, DoorDash quickly saturated the market. DoorDash was fulfilling grocery orders in just 15 minutes, but after about a year and a half into the endeavor the company has decided to pull out, reports Business Insider.

Investors were just as fast to drop cash into the service. In 2021, over $12 billion was infused into grocery delivery services that could process everything in less than 30 minutes, according to tech market intelligence platform CB Insights

In 2021, when DoorDash first did a soft launch of the 15 minute delivery in New York City, the company decided to pay its own workers rather than rely on independent contractors, and used a warehouse called DashMart in the Manhattan neighborhood of Chelsea to test the system. 

Around 2,000 products, including fresh grocery and frozen foods, were available at the quick turnaround rate.

However, due to inflation, DoorDash says shoppers were not ordering enough to make the operation sustainable. The company added that it could not find a way to make the model work. Some were offering heavy discounts to first-time buyers. Moreover, local grocery stores started to complain.

Related:DoorDash to shift business model to hourly pay

The investors left as quickly as they entered the market. In 2022 the investment dollars dropped by 72%. That, combined with the challenging profit line, led to the sudden dropoff in the quick delivery business.