DoorDash CEO Tony Xu is taking on the role of industry consolidator in food delivery

Tony Xu, the co-founder and CEO of DoorDash Inc., was seen smiling during the Wall Street Journal Tech Live conference in Laguna Beach, California, on October 22, 2019.

In the midst of the Covid pandemic when restaurants nationwide were facing a severe crisis, DoorDash CEO Tony Xu proposed cutting commissions, which was considered unconventional. Despite concerns from Chief Business Officer Keith Yandell about potential profit losses prior to the company’s IPO, Xu made a compelling argument, emphasizing the need for restaurants to succeed for DoorDash to thrive. The company ultimately sacrificed over $100 million in fees, as revealed by Xu later.

Since its inception at Stanford University in 2013, Xu, now 40, has steered DoorDash through the competitive and low-profit food delivery industry, establishing a company valued close to $90 billion by Wall Street today. Amid a challenging year for tech stocks, DoorDash’s shares have risen by 23%. Despite slim net profits post-IPO, Xu remains focused on consolidating the industry through acquisitions, with recent deals including the purchase of Deliveroo for $3.9 billion and SevenRooms for $1.2 billion.

DoorDash has a history of acquiring competitors to expand its market share. Notable transactions include the acquisition of Caviar for $410 million in 2019 and Wolt for $8.1 billion in 2021. Facing tough competition from the likes of GrubHub and Uber Eats, Xu emphasizes innovation and meeting customer expectations to stay ahead in the market.

DoorDash’s success can be attributed to its early focus on suburban markets and a customer-first approach. Xu, known for his hands-on leadership style, still actively engages in customer service and remains deeply involved in the company’s operations. Colleagues and investors praise Xu’s dedication and entrepreneurial spirit, instilled in him by his parents’ hard work ethic.

As DoorDash continues to grow and expand globally, Xu’s leadership and strategic acquisitions are closely watched by investors and analysts, despite recent concerns about integrating multiple acquisitions simultaneously.