12 Most Popular Food Delivery Services in the US

Unlock stock picks and a broker-level newsfeed that powers Wall Street.

Ashar Jawad

Sat, Sep 30, 2023, 12:08 PM 9 min read

How the world eats has drastically changed over the last few decades, when food delivery from restaurants was largely confined to pizza, burgers, and Chinese food. Today, there are a wide range of options, from delivery of home-made food to fresh vegetables and fruits, and hot, sizzling steaks to ice creams. Several factors have contributed to this shift. These include, but are not limited to, the advent of user friendly apps, advancements in delivery logistics and equipment, as well as the growing ecommerce space since the coronavirus pandemic.

Globally the food delivery industry was estimated to be worth over $150 billion in 2021, having tripled in size compared to 2017, as noted by McKinsey & Company. Online food deliveries have increased by an average rate of 20% over the last five years, despite the constant increase in delivery fees. About 42% of the restaurant orders are now being placed online, and by 2025, it is projected that online food deliveries will make up for 40% of all restaurant sales.

On the other hand, while the food industry on a whole is growing at about 3.7% a year, the online food ordering and delivery market is expanding between 15-20%. The statistics shared in our recent article 12 Biggest Delivery Companies In The World speak volumes about the massive growth and potential in the industry.

In the United States, the market size reached $26.1 billion in 2022 and is projected to rise to $46.5 billion by 2028 at a CAGR of 10% over this period according to Research and Markets. DoorDash, Inc. (NYSE:DASH) is the most popular food delivery service in the country, having an overwhelming 65% of the market share along with its subsidiaries. It is followed at second with 23% by Uber Eats, which is owned by Uber Technologies, Inc. (NYSE:UBER). Another major player in the food delivery industry is Grubhub.

DoorDash, Inc. (NYSE:DASH), which had a humble beginning by four Stanford University friends, has been making its way to the top for the last several years. One of the reasons that makes the delivery service so successful is its audience segmentation. DoorDash, Inc. (NYSE:DASH) distinguishes its customers into two segments, users and restaurants.

Not only does it target users who want quality food delivered at the comfort of their homes or offices, DoorDash also focuses on restaurants that do not have the means to offer food delivery or adequate space for dine-in facilities. By doing this, DoorDash projects itself as being receptive to the needs of both users and restaurants, which has allowed the company to position itself as a customer-friendly brand in the United States.

Moreover, DoorDash, Inc. (NYSE:DASH) focuses on simplified technology for its mobile application, which enhances the customer usage experience when placing orders. All of these factors combine and enable DoorDash to be the market leader in the food delivery services industry. Moreover, the launch of DashMart, the virtual grocery store of DoorDash, has in recent years further bolstered the company in terms of both financial consolidation and trade volume.

Ravi Inukonda, the CFO of DoorDash, Inc. (NYSE:DASH) made the following remarks in the company’s Q2 2023 Earnings Call:

Growth in the business continues to be very strong. In fact, in Q2, growth actually accelerated compared to Q1. Given the business is positive on a unit economics basis, that’s driving some of the upside in EBITDA that you’re seeing in the business. At the same time, our core restaurant business is continuing to improve in terms of overall profitability, as well as both new verticals as well as international also becoming efficient when you look at the unit economics year-on-year. That’s driving the underlying EBITDA upside that you’re seeing in the business. But for us, as you know, it’s always important that we are constantly looking to reinvest back in the business.

Uber Eats, owned by Uber Technologies, Inc. (NYSE:UBER), is another popular food delivery services company in the US, which also has operations across 6,000 cities in at least 45 other countries. Launched in 2014, it did not take very long for Uber Eats to grow in the United States, and as of today, it holds nearly a quarter of the food delivery market share in the country. In a bid to further boost profitability and consolidate its grip over the industry, Uber Technologies, Inc. (NYSE:UBER) acquired food delivery service Postmates in 2020.

Uber Technologies, Inc. (NYSE:UBER) has for long been a market leader in the ride-sharing industry. Its successful venturing into the food market has also received wide acclaim from both users and investors alike. RiverPark Large Growth Fund made the following comment about Uber Technologies, Inc. (NYSE:UBER) in its Q2 2023 investor letter:

"UBER remains the undisputed global leader in ride sharing, with a greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates. Moreover, after a history of losses, the company is now profitable, delivering expanding margins and substantial free cash flow. We view UBER as more than just ride sharing and food delivery, but also as a global mobility platform with the ability to sell to its 130 million users (by comparison, Amazon Prime has 200 million members) and penetrate new markets of on-demand services, such as package and grocery delivery, travel, truck brokerage (the company had $1.4 billion in Freight revenue for 1Q23), and worker staffing for shift work. Given its $4.2 billion of unrestricted cash and $5 billion of investments, the company today has an enterprise value of $84 billion, indicating that UBER trades at 20x next year’s estimated free cash flow."

Methodology

We have ranked the 12 most popular food delivery services in the US using both market share and consensus method. Since about three companies and their subsidiaries alone dominate the market, that leaves us with several small delivery services that each hold a negligible share in the industry. Details of their revenue and active users are also not publicly available. Therefore, for these smaller delivery services, we have used consensus methodology, listing them based on their rankings on other websites as well as their popularity among Americans on Reddit. Rankings from 1-6 are based on market shares for which data has been sourced from Bloomberg Second Measure and Business of Apps, whereas rankings 7-12 are based on consensus method.