DoorDash to spend $50M on gas relief as costs surge
A delivery worker carries a DoorDash bag in New York, US, on Tuesday, May 6, 2025. Photographer: Yuki Iwamura/Bloomberg via Getty Images
DoorDash announced Wednesday that it plans to spend over $50 million in the second quarter to help offset rising gas costs for its delivery drivers.
What they're saying:
The San Francisco-based company said in March that it would offer extra compensation to U.S. and Canadian drivers as part of a temporary program to offset a sharp increase in gas prices due to the Iran war. The national average for a gallon of gas on Wednesday was $4.53, up 44% from a year ago, according to AAA.
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DoorDash said demand for deliveries remained strong in the January-March period despite higher gas prices, with total orders rising 27% to 933 million. That fell short of Wall Street’s forecast of 954 million, according to analysts polled by FactSet. DoorDash said winter storms closed businesses and dampened demand in some locations.
The company said it's paying for gas price relief by adjusting investments in other areas. DoorDash said in November that it would be spending heavily on new products and services this year, including the addition of restaurant reservations in its app and robot deliveries.
"We did have to push out some investments ... in order to make room for this," DoorDash Chief Financial Officer Ravi Inukonda said during a conference call with investors. "If we do decide to extend the program, our goal is to find offsets."
By the numbers:
Revenue also fell short of expectations. DoorDash said its revenue rose 33% to $4.0 billion, which was shy of the $4.15 billion analysts were forecasting.
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DoorDash said its net income fell 5% to $184 million, or 42 cents per share, for the January-March period. That was partly due to a 30% increase in research and development costs compared to the same period last year.
Still, that beat analysts' forecast of a 36-cent per share profit, according to FactSet.
DoorDash's shares rose more than 11% in after hours trading Wednesday.
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DoorDash's earnings report came a week after rival Uber announced a deal with Expedia Group that will let users make hotel reservations through the Uber app.
What's next:
When asked if DoorDash plans to add a similar service, DoorDash Co-founder and CEO Tony Xu said the company still sees plenty of room to grow its core area of restaurant and retail delivery.
"We are a tiny fraction of what’s actually available and addressable, which in some sense means that there’s a large runway and opportunity for us to become even better in breed in terms of what it is that we can offer," he said. "And if we can keep doing that, I think we’re going to be just fine."
The Source: The Associated Press contributed to this report. The information in this story comes primarily from DoorDash’s latest earnings report and statements made by company executives. This story was reported from Los Angeles.