DoorDash: Building Density in the Last Mile, 2012 - 2020

In February 2020, Tony Xu, co-founder and CEO of DoorDash, faced a resource allocation decision: where to deploy capital and management attention to improve unit economics as the company approached an IPO horizon. DoorDash had grown from a Stanford Startup Garage project to roughly 35% U.S. restaurant delivery share, 200,000+ merchant partners, and a $13B valuation. Its operating model — built around route density, just-in-time dasher matching, and corridor-first market launches — had proven durable through competitive and capital cycles. The case traces DoorDash’s founding logic, the evolution of its local operating system (marketplace, DashPass, DoorDash Drive), and the unit economics framework managers used to compare thin new markets against mature corridors. Students must evaluate two strategic paths: deepening suburban density to push more markets toward mature-unit economics, or accelerating into denser urban markets post-Caviar acquisition