DoorDash Rolls Out Big Changes To Platform After Years Of Testing: CEO Says This Was Always The Plan

DoorDash Inc DASH is offering more choices for consumers and more choices for Dashers at roughly the same cost to the company.

What Happened: DoorDash redesigned its consumer app based on customer feedback and unveiled the changes at its inaugural Dash Forward 2023 product showcase. The updates are focused on improving convenience and reliability to help consumers save even more time using the service.

DoorDash has expanded its reach beyond restaurants by offering grocery and retail delivery. The app now features separate grocery and retail tabs, which allow users to more easily find what they are looking for.

The company also introduced a universal search feature, a browse tab and a multiple carts option to help customers balance the different shopping categories. 

The consumer app updates are expected to gradually roll out to consumers over the next few months. 

DoorDash also introduced new options for its workers, which it calls Dashers. Dashers now have the ability to choose how they earn their pay: by offer or by time. 

Previously, Dashers were paid based on delivery where workers earn a specific amount per delivery task completed. Now they also have the option to get paid by the amount of time it takes them to complete an order from the moment they accept to the moment it's delivered. 

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Why It Matters: Wednesday on CNBC's "Squawk Box," DoorDash co-founder and CEO Tony Xu said the company has planned this evolution since the beginning. 

"We were never set out to just build a restaurant delivery service. In fact, today we have over 100,000 merchants on the platform that sell groceries, retail items, pet food items, liquor, flowers and pretty much everything inside your city. That is really our goal," Xu said. 

DoorDash aims to connect consumers to local businesses of all sizes, and the company has known it would need to provide Dashers with choice and flexibility in order to make it happen, he said, adding that over 90% of Dashers work less than 10 hours per week.

Xu doesn't expect the new Dasher options to change the company's costs. DoorDash has been testing the pay-by-time option for years in order to figure out how to roll out the new feature, he said.

The delivery company is able to offer more flexibility because of its scale, so it's not necessarily something that the competition can easily do, he said.

"Dashers earn $25 an hour [on average] nationwide — that's fantastic. We also have to make it affordable for consumers, we have to make sure the merchants are growing their same store sales and profits and we have to make all of this orchestration happen in coordination in every single city," Xu said. 

DASH Price Action: DoorDash shares were up 2.64% at $76.74 at the time of writing, according to Benzinga Pro.

Photo: courtesy of DoorDash.