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If you’re a busy individual who often orders food online, you are probably aware of how expensive delivery fees can be. So, paying a monthly fixed membership fee for your grocery or food deliveries may be worth it. DoorDash is one company that offers this kind of monthly membership, and they named it DashPass, but is it any good?
A DashPass membership is good if your average monthly delivery costs exceed $9.99. DashPass members receive free delivery from eligible restaurants and grocery stores if their orders meet the minimum subtotal amount. It is not worth the price if you don’t live in a city with eligible restaurants.
A DashPass membership may not be for everyone, but it’s a bargain for others. Let’s take a thorough look at this membership; what is DashPass all about, what does it offer, how does it work, the pros and cons, who is eligible for the membership as well as any other fine details that will help you make an informed choice if you should sign up or not.
DashPass is a membership offered by DoorDash that allows people to get a limitless amount of food and grocery deliveries for free in conjunction with lower service fees (if your order meets the minimum subtotal of $12 USD for restaurants and $25 USD for grocery stores). Service fees are additional costs that most, but not all, delivery services add to orders from most restaurants.
They promise to deliver your food and groceries within an hour or less. Their website says you can get 10% off your order subtotals each year, and you can track how much money you are saving.
In some areas/states, the minimum order amount is $10 USD for eligible restaurants/fast food services. These areas include Bakersfield (CA), Charlotte (NC), Cincinnati (OH), Dallas (TX), Denver/Boulder (CO), Indianapolis (IN), Los Angeles (CA), Orange County (CA), Phoenix (AZ), Sacramento (CA), Salt Lake City (UT) and Tulsa (AZ).
Although DashPass works for multiple deliveries, not all orders or restaurants accept DashPass. You can only get free delivery from selected restaurants or grocery stores with the monthly membership, although the list is continuously expanding. Apparently, after just two orders, the membership pays for itself.
No one knows the criteria for an eatery to be added to the DashPass list. Considering that DoorDash pays the drivers doing these deliveries and at the same time charges consumers less, it’s almost certain that DoorDash has partnered with these eateries (as opposed to simply listing them on their platform) so that DoorDash can receive a cut from the food costs.
DashPass is currently only available to customers living in the United States or Canada (some areas are excluded). Besides the free or discounted deliveries, a DashPass membership also gets you additional benefits such as priority customer service and promotions. It’s good to know that these perks also apply to Caviar, the delivery platform DoorDash obtained in 2019.
In terms of cost, there is a free 30-day trial, but you’ll need to provide your payment details before you can access the trial. After 30 days, you’ll automatically be charged $9.99 USD/month (unless you cancel by the 30-day mark) or $96 USD billed annually, which will be $8 USD/month. The monthly plan allows you to cancel anytime, whereas the once yearly price works out cheaper.
DashPass, unfortunately, doesn’t apply to all eateries. When placing your order on the DoorDash website or app, a green checkmark will be displayed beside your chosen eatery to verify whether it qualifies. Without the green checkmark, it’s not one of the selected eateries to which DashPass benefits apply.
Select your food and add items to your cart as you would ordinarily. Assuming your order meets the base subtotal, you’ll be able to checkout. If you don’t meet the base subtotal, the difference is shown on the checkout page, so you can add something extra to your order and save money on the delivery cost.
Other than the monthly membership cost, there are no other hidden expenses with DashPass. However, DashPass doesn’t cover all the expenses for your orders, such as tips for drivers, service fees, or taxes.
The delivery fee is covered if your order is higher than the minimum subtotal, and the service fee is reduced. As always, it is polite to tip your DoorDash driver.
Indeed, you can cancel your DashPass membership whenever. You can do so either through the DoorDash application or the website.
Since DashPass is a subscription service and the fee is charged periodically, you must cancel at least one day before the following planned subscription renewal date. If you would instead not get charged for another month, set a reminder so you remember to cancel your membership.
When you end your DashPass membership, the advantages will be accessible until the following charging date. This means you can cancel the first day after being charged to have the benefits for the month ahead, or you can cancel the day before your next renewal and only have the DashPass benefits for one more day.
The exemption is assuming you end your membership during your 30-day trial period. Since that is a free period, your advantages end with immediate effect upon canceling.
The food delivery industry has become increasingly popular with consumers and investors in recent years. Today many delivery services have to compete for market share, often by subsidizing the cost of deliveries. This is great for consumers as they can enjoy their favorite meals at home for the same or even a discounted price than what they would pay in-store.
DoorDash is currently the second-largest player within the delivery service space, having passed Uber Eats. GrubHub is still the largest but may not be for much longer. Within 12 months, DoorDash raised over $1 billion USD, and its valuation is increasing rapidly.
There must be a reason why DoorDash has attracted so much attention and investment. Something unique about DoorDash is putting the company ahead of its competitors. The answer is their new subscription service called DashPass, which has the potential for exponential growth.
DoorDash’s membership model in the food delivery sector is notable, but not all competitors have adopted it. Since DoorDash announced the DashPass, Uber Eats, struggling to maintain a slice of the pie, hasn’t offered a membership model to their customers.
Postmates is one other company that offers a subscription service but hasn’t been able to keep up with DoorDash’s fast growth. Uber Eats has tried to provide free delivery from a small number of restaurants and other one-off promotions, but this hasn’t caught the public’s attention.
DoorDash isn’t just competing with other delivery services but also on meals at home. When choosing a meal, shoppers have the choice to:
- Purchase food from grocery stores and cook themselves.
- Order their groceries from online stores which are delivered but still need to be prepared.
- Purchase meal kits and follow simple cooking instructions with minimal ingredients.
- Order food from restaurants via various competitors.
- Order meals using DoorDash and have them delivered.
Most people can agree that on-demand food delivery is simple and saves time. DashPass additionally allows people to save money on their orders, especially with frequent usage. Let’s take a deeper look into how DashPass provides value to its users.
DashPass has achieved product-market fit at an incredible rate of speed. For us to understand how DoorDash did this, we should ask the following questions:
- What exactly are DashPass members paying for?
- Who was the DashPass membership created for?
- How does DashPass make life easier for its members?
By identifying the problem DashPass solves for its members, we can determine who DashPass is meant for and perhaps explain why DashPass is successful. When considering why DashPass has gained so much attention and why it is worth the subscription, we should consider why customers use food delivery services.
The main reason people use services such as DoorDash is because of convenience. The public is constantly on the lookout for the best prices, a wide selection of eateries, the best service delivery, and reliability. They can order their food online from home and therefore save time.
Therefore, DoorDash must have a wide range of restaurants and grocery stores on its DashPass platform. The membership is also intended to appeal to people who have a reason for wanting reduced delivery costs.
DashPass supposedly “pays for itself” after two orders per month, so this membership is intended for people who frequently use it; otherwise, it doesn’t make sense. Members of DashPass are mostly busy individuals who are trying to save time and money.
The membership was created for people with busy schedules and who don’t want to burn holes in their wallets when paying for food deliveries. Even though DoorDash is trying to expand its list of restaurants offered, not all eateries are available on DoorDash, and there may be an even smaller selection for DashPass members. But lower fees are more appealing to members than having a wide selection.
DashPass offers a compelling way to make members feel like they are always getting a discount by offering them an unlimited amount of deliveries at a fixed monthly price. The more members use DashPass, the more value they believe they are getting out of the membership. DashPass is also valuable for occasional users, provided that the restaurants they choose are available.
DashPass can’t offer the same cost savings as grocery shopping, and many restaurants will always be more expensive due to labor costs. However, DashPass is a first in restaurant delivery services and the tradeoff between cost and time benefits makes it a great option. It addresses the main issues that people are looking for food delivery services of any kind face, offering comparable choices, convenience, and reliability.
DashPass’ main advantage is its value. It works in the same way as Amazon Prime. Users feel like they are getting more for their money by placing multiple orders.
DashPass gives DoorDash the ability to make food delivery stickier for the most important segment of customers – power users. DoorDash released the stat that an average DashPass subscriber increased their order frequency by half and saved $20 per month on delivery fees, even after adding the monthly subscription cost. DashPass subscribers order between 7 to 8 times per month.
Although DashPass’s impressive contribution to DoorDash’s rapid growth and the stickiness it creates in eaters’ mouths is remarkable, DashPass’s full potential will depend on how DoorDash expands beyond food delivery. DoorDash hopes to be the US’s last-mile logistics platform, at least for US cities. They will need to develop functionality to support grocery delivery and retail merchants.
Although it’s ambitious, each vertical they make available to users will allow them to offer additional cost (and access) benefits through DashPass. This is similar to Amazon Prime, which provides free shipping and unlimited access to services such as Amazon Video.
DoorDash must move fast, as there are already competitors in these verticals. They have the capital to do it, which is a good thing.
It all depends on where you live. A monthly membership may not be worth it if you live in a small city with few eligible restaurants. DashPass is more prevalent in densely populated areas than in rural areas.
The DashPass is worth the investment if you live in a place with many DashPass restaurants and you often order food online. It’s easy to cancel if you feel it’s not worth it. You can renew your membership again at any time, but you won’t receive the free trial month.