DoorDash Takes a Tip From Grubhub With Amazon Canada Partnership

After avowing that its DashPass subscription growth strategy was centered not on partnerships but on organic channels, DoorDash has changed its tune, at least in Canada.

The aggregator announced Tuesday (June 6) that it is partnering with Amazon Canada to offer free yearlong DashPass subscriptions to Prime members in the country, promising free delivery and credit back on pickup orders.

“At DoorDash, we’re always looking for ways to connect Canadians with the best of their neighborhood,” DoorDash Canada General Manager Shilpa Arora said in a statement. “This new offer will unlock the incredible benefits and perks of DashPass for Prime members in Canada.”

With this partnership, the aggregator is taking a tip from competitor Grubhub, which has had a nearly identical deal with Amazon in the United States since last July. On Monday (June 5), Grubhub announced an extension of the partnership, offering free two-year subscriptions for a limited time and continuing its yearlong offer after that.

DoorDash Canada’s move to effectively replicate the deal is especially noteworthy given that, earlier this year, DoorDash Chief Financial Officer Prabir Adarkar explicitly stated that the company’s strategy for driving DashPass growth eschewed partnerships in favor of channels that the company believed offered more reliable long-term growth.

“In terms of what’s driving the growth, it’s not been partnership-driven as some of our competitors might be,” Adarkar said in February. “That’s a competitive strategy that others are using. The majority of our growth, at least as far as the DashPass program goes, is from our own channels, as well as through traditional performance marketing channels. So, it’s not partnership driven. These are organic channels that ultimately drive [what] we’ve seen in the product.”

The allusion to competitors is a clear callout of Grubhub, which in addition to its Amazon Prime deal has also worked with Bank of America to offer yearlong subscriptions to cardholders. Uber, for its part, has been leveraging its cross-platform subscription Uber One to drive loyalty, using its Rides business to help generate the adoption of its delivery offerings.

It seems, however, that now, whether the rate of DashPass subscriber growth has slowed or whether it is simply that competitors have been effective at growing their own membership bases, DoorDash is changing its tune.

Aggregator adoption in general continues to rise, but perhaps not as quickly as DoorDash would like. According to data from PYMNTS’ study “Connected Dining: Third-Party Restaurant Aggregators Keep the Young and Affluent Engaged,” the share of consumers reporting having used a restaurant aggregator in the prior six months rose from 37% to 40% between April 2022 and February 2023.

Overall, DoorDash continues to be the No. 1 food delivery app, per PYMNTS’ Provider Ranking of Aggregators, which ranks key players based on a range of factors, including channel coverage, up-to-date downloads, monthly average users, sessions per user and average session length. On all these metrics, the San Francisco aggregator ranks ahead of its competitors, with Grubhub at No. 13.