Food delivery platform DoorDash (DASH +1.08%) is growing rapidly. Could the company soon use autonomous vehicles to deliver its orders? In this segment of Backstage Pass, recorded on Nov. 19, Fool contributors Travis Hoium, Rachel Warren, John Rosevear, and Toby Bordelon discuss this fascinating idea.
Travis Hoium: Sorry, I'm going to throw it to you, John, because [laughs] the thing that I thought of when I thought of this is if you're building this scale, like I said, you have this technology layer, and then you have the delivery piece. I think Nuro is the company in San Francisco that's delivering Domino's Pizzas with an autonomous vehicle.
Is that the next step? They buy one of these autonomous delivery companies, now, there's just these little DoorDash vehicles driving around town all the time. [laughs] You can order anything you want. It'll just drive up to your door and you can go pick it up or flings it into your driveway or what. [laughs]
Rachel Warren: That will be cool and scary at the same time. [laughs]
Hoium: That was what I thought of, so John, I thought of you when [laughs] that came to mind.
John Rosevear: I was going to make a much more old school comment, that the line of thought behind those still reminds me a bit of Pepsi, where Pepsi built this distribution network where they're delivering soda to basically every convenience store in the world. Then they said, "What else can we put on the truck?" They acquire Frito-Lay, they acquire brands like Gatorade, on and on and on, because they're putting more and more stuff on these trucks that are already running.
That all in retrospect looks really, really smart because they've sold more, they've grown sales, they've grown revenue, they've grown profits all while running the same trucks to the same locations. They just have more on the trucks and more products that they're bringing through, this reminds me of that a bit. As to whether autonomy or not is a key for them, [laughs] I don't know. I think in the near term, autonomy is going to be really expensive.
We'll see four or five years from now when you have companies like Cruise, Waymo actually deploying at scale, and some of these smaller companies looking at delivery opportunities. You mentioned Domino's, Domino's is also doing a test with Ford in Michigan, where they had this pretend autonomous vehicle.
It actually had a human hidden in it who could watch, because they were testing ways to deliver a pizza with an autonomous vehicle, where there's nobody to bring it to the door of the house. There were some really funny pictures that came out of this, where there's a driver hiding in this autonomous vehicle. Do we park on the curb? Do we come in the driveway? Do we open a hatch in the front? Do we open a hatch in the back? What do people prefer?
They're just testing all these configurations. There's a lot to be figured out over the next few years, but I do think autonomy plays a role in this space, but I think we're several years away from it at the earliest.
Hoium: I love it. My 4-year-old would love nothing more than to see the autonomous vehicle driving up, be able to run out and get this stuff [laughs] himself. The theme here with this deal specifically is about scale in that delivery space. It's hard to argue that a company like DoorDash isn't building a scale that's going to be competitive at least.
If not, I think they might even be bigger than Uber Eats now. That puts them in a really good position whether they want to do autonomy or anything else going forward. I questioned this company. Then over the last year, I use them all the time, it's just hard to get away from them. I think it could be really good for them.
Warren: Well, I think it's interesting. Instead of trying to beat the competition, they're just acquiring some of the competition, which is something we've seen. This is totally different. We've seen Facebook has done that over the years, growing its market share within social media. It's a similar concept, although completely different industry.
It works, everyone knows the DoorDash name. It's exciting. I feel like a year ago, I was not as positive about where this company was going, I've changed a little bit on that as I've seen how it scaled.
Hoium: Well, I wonder if it's like a preemptive acquisition, too. Because like I said, there's dozens of companies that are doing the same thing. Somebody's going to pile those together and make a big company. If you're DoorDash, you're like, "Well, do we need to do this before Uber does or some other company does?" It could be that.
Toby Bordelon: I think that's a good point. You need to do it before someone else does, but you also need to do it before regulators start paying too close attention. [laughs]
Hoium: Right, yes. There's another good example.
Bordelon: At some point, someone going is going to decide, "Hey, wait a minute. This space suddenly got a lot less competitive." Then you want to have done some stuff before you get to that point because you never know when that point is going to be. Thank you, Travis, for bringing that, it's fascinating and interesting to think about.
