DoorDash Plans To Launch Its Own Credit Card

DoorDash, the largest food delivery company in the U.S., plans to offer its own rewards credit card to users, the Wall Street Journal recently reported.

The San Francisco-based company hasn’t chosen an issuer yet, but it is exploring offers from at least 10 large banks, including J.P. Morgan.

DoorDash is currently winning the pandemic-induced food delivery war, capturing 55% of U.S. consumer meal delivery sales in February. This move is likely a strategy to put No. 2 food delivery platform Uber Eats, No. 3 Grubhub and No. 4 Postmates even further behind by building loyalty among current users while capturing new customers as well.

DoorDash is reportedly working with partner restaurants, including McDonald’s, to offer additional rewards, discounts and promotions to its credit card customers.

While DoorDash’s partnership with McDonald’s was seen as a win for both companies, third-party delivery apps influence has not been entirely positive for other foodservice brands, whose already-slim margins are shrinking further thanks to delivery fees as high as 40%.

In a class-action lawsuit filed in U.S. District Court for the Southern District of New York in April 2020, DoorDash and its competitors Grubhub, Postmates and Uber Eats were accused of using monopoly power to charge exorbitant fees to restaurants, forcing them to raise prices for dine-in customers.

While sales for meal delivery services like DoorDash grew 119 percent year-over-year, according to a report that looked at February 2021 data, it remains to be seen whether demand will stay high as newly vaccinated customers return to in-person dining.