Q3 2021 DoorDash Inc Earnings Call
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Typically go straight into questions that given the transaction announcement, we'll have Tony and Mickey.
Some brief comments before going into the Q&A session for.
For the Q&A. Please note Mickey is happy to answer questions about his approach to the industry and its rationale for the combination of <unk> don't ask questions about financials and our outlook for future integration plan.
Businesses will remain independent until the deal closes so we won't be answering those ones at this point I will now pass it onto journey.
Great. Thanks, Andy Hey, everyone. Thanks for joining us today.
At <unk>, our mission is to grow and empower local economies, we started in food delivery logistics and our vision was always to build a platform that supports all of our local commerce and to do it on a global basis today.
To date, we have executed against this primarily on an organic basis, that's not because we believe in must be done organically, but because our framework for M&A sets a high bar for those who haven't heard it before our M&A framework is comprised of three core standards first it must be talent accretive we will.
For teams of superbly talented people that share our vision as well as our approach to execution.
Unless unlock product categories, and or new geographies, which means that we look for opportunities that expand our tam either in a way that we couldnt do so on our own or in a way that is much more efficient than we could do so.
Ourselves.
And third it must increase our long term profit potential and add to shareholder value.
Volt handily meets all three criteria.
We believe volt bring extraordinary talent, a world class product and operational expertise that will accelerate our progress.
We've gotten to know Micky and the team.
Well over the last few months in fact years and believe that they are truly exceptional they share our ambition to build a global platform for all global Commerce, David established a culture based on innovation intense operational rigor and our bias for action. These characteristics match, our own and we believe our strategic and cultural alive.
And then make them the best team in the world to lead our international efforts.
From a market perspective, both operates in 23 markets of which 22 are new markets for door Dash Baidu.
Baidu solved we believe these markets provide an opportunity to grow our international business to multiples of what it is today.
This should allow us to invest and expand more efficiently than we could have done on our own and on a faster timeline.
Finally volt products scale to multiple categories in certain markets. The company has already established a strong presence in categories ranking as far as cosmetics and electronics as we look to grow our non restaurant categories globally, we expect their product vision and expertise will improve our execution.
From a financial perspective, the opportunity in local commerce is enormous we believe the potential in our combined markets create a substantial opportunity to grow gross order value to multiples of its current level.
We expect to invest aggressively behind the <unk> team and believe their capabilities will improve our efficiency internationally, while allowing us to increase our focus in the United States.
That building building, a large and profitable local commerce platform is difficult to do in any market doing so across many markets simultaneously is exponentially harder.
But attacking heart problem.
Problems is what we like to do at door Dash and we know that the same is true for volt, we couldnt be happier to be teaming up with Micky and the extraordinary team and both to execute against our shared vision.
With that let me hand, it over to Mickey.
Thanks, Tony Hi, everyone.
Of course, a cofounder and CEO of <unk>.
So Michael foreigners and I founded <unk> back in 2014 with ambition to build a new layer of infrastructure connecting restaurants, and retailers corridors and consumers in a way that made city, it's better on people happier. We wanted to build a digital version of the shopping mall, but with the convenience, but im wondering logistics engine kind of in April we did.
And our first delivery in Helsinki, Finland back in 2015, when we started we knew a few things would have to be true. If we were going to build the scale of the business we ambition.
First of all we were going to have to go into haptics part beyond sentiment in Finland, we have fewer than 6 million people. So to build large business, we were going to have to be international from day one.
We built everything about the service from product logistics, the customer service with the idea of being easily exploitable Theres allowed US launched 22, new countries into five years from 2016 to 2020.
Secondly, we were going to have to be efficient.
The Nordics, we have a challenging combination of small cities low population density pilot costs and note that in culture that meant we have to build the business operated a incredible levels of logistical efficiency in order to generate room for profitability.
Thirdly, we have to build a product that consumers locked there was no room in our margin structure or our bank account to make up for poor quality product with a huge customer acquisition spend we have to make our marketing spent work by using our product to retain consumers at higher levels than what we saw at competitors.
We've been on an incredible journey, so far but believe we are only getting started.
We have one chance to build a leading global platform for local commerce by joining forces with the team at door at Ash, we expect to put our combined company on a path to accelerate our efforts and bring greater levels of value to consumers merchants and corridors around the world.
Okay, Thanks for making it.
Operator, we can take questions now.
Alright, so as a reminder.
Quick question, you will need to press star one on your telephone.
So enjoy your question press the pound key again that is star one on your telephone. Please stand by we'll be confronted the Q&A roster.
First question comes from the line of Ross Sandler from Barclays sooner in our lives.
Hey, guys. So I guess, we knew this was going to come eventually with the European cold or kicking off.
So I think it was Tony with the first question is it looks like <unk>.
Doing about the same drops per hour as some of the competitors over there and our understanding is there are number two in most of their market. So I guess, what are you guys, bringing to the table and how might the combination change that between kind of advance them to the top of the league table.
Got it.
Yeah, Hey, Ross I'll start and I'll, let others here follow.
I would say there are three big things that we saw about <unk>.
That is just really incredibly in our first and foremost. This is a team that executes in a very similar way to door dasher cannot understate, how important that is when we're talking about an execution oriented business, which is where we find ourselves in.
They really competed by building a winning product by focusing on removing every basis point of inefficiency finding every penny of savings and building a business that has compounded its efforts in delighting the customer and doing so in a very capital efficient way.
The second thing I would say is they've built a remarkable business I mean as you saw in the.
The Investor relations deck that we uploaded.
The business has.
Grown to $2 5 billion and annualized gross order value is growing triple digits. It's done so while also growing its bottom line at the same time.
And so it's become very very efficient not only in its drops per hour, which includes idle time by the way.
But also just and how it is thought about everything from the consumer experience and conversion to customer support to localization.
And so forth.
They built an incredible business when you look at this capital efficiency combined with just how early are there markets are.
As a standalone business they just have.
Very large scaled to grow into the final thing I would say is really representing an accelerated timeline and speed for door dash.
Both because of <unk>.
Where they started in their home country of Finland relatively speaking smaller country. They knew from day, one in order to achieve the scale of their ambition they needed to expand into a lot of geographies and they've now grown to 23 markets.
22 will be new to door at ash. So the combined team will be able to serve over 700 million people.
So not only does it.
Grow our Tam, but it allows door dasher have single threaded focus here and accelerating our ability to compete on a bigger global stage.
Hey, Ross just to add to Tony's point.
Deliveries per hours, obviously, what an important metric but does.
Across other aspects of the P&L.
Actually it means that what we saw in terms of voice capital efficiency.
The redemption will go to <unk>.
And so what I'm trying to say what that is.
Learning from both will help improve the efficiency of.
Our own international investments the second thing out in the second point to make is.
What are the 4000 people and so if you think about what that does to our international Oregon and ability to to expand internationally because it gave us a level of focus outside the U S. And then third it preserves our existing management bandwidth to go after the large opportunity that exists in the U S allows us to sharpen that focus among many in the restaurant category in the U.
The us but also in terms of.
In terms of new categories going through some comedians.
Great. Thanks, guys.
Next question comes from the line of Deepa <unk> from Wolfe Research. Your line is now open.
Great Congrats on the acquisition thanks for taking the questions.
One for Tony and one for Micky, Tony I wanted to ask about the driver supply and utilization here in the U S and it seems like the driver acquisition trends are still pretty healthy, but with various categories on our platform scaling.
Kind of different on demand needs for now curious on your thoughts on whether it would make sense to deploy a dealer model with part time full time.
Model together with the on demand workforce. What are you thinking what are the things that you're watching potentially to explore this model and then maybe as a follow up to Ross's question on farm Mickey and I wanted to ask about your thoughts on the broader European market, where do you see kind of near to medium term opportunities to expand next.
Given that the competitive intensity in some of the western European market is very different.
Yeah.
I'll start on the Dasher question.
I think there's actually a couple of questions in there I think the first part is.
If you look at <unk>, they are actually no different from consumers in the sense that they all value choice and one of the things that we've seen is.
Over 3 million bachelors, who dash in the quarter, earning over $2 $8 billion I think it really goes to show is that when you offer flexible opportunity that the platform. It really can be complementary to the traditional labor market and that's why I think you'd see healthy levels of dasher supply in the marketplace that has grown to Matt.
Meet the demand.
And as we've gone into other categories. This is even operating doctors, even more choice and more flexible opportunities, whether it's doing grocery delivery is convenience deliveries.
Et cetera.
I think the second part of your question.
It really is around dasher preference and at the end of the day, we're a platform that always has built.
What doctors wanted and so and then starting from that basis of offering and what we hear time and again.
Not just actually in the U S, but really in all of our markets is how much they value the flexibility to earn.
And starting from that basis, and then working backwards with <unk>.
Global regulators elected officials and anyone else really who wants to create.
Different frameworks that really meet the modern day realities of what it is that workers want that's what we stand for.
Go ahead Mike.
John.
On competition in Europe like a lot of people say that it's very intense from where I'm sitting like it doesn't feel that intense I guess, it's because when you're sitting in the pressure kettle for seven years, you kind of get used to the pressure like competition has always been intense in our industry and I expect it always will be like this is an industry that is ultimately about how youre able to marry efficiency with customer.
But the easiest thing in the world is to spend money to have an amazing customer experience.
That's not a long term sustainable business.
It comes to competition like our focus is not on competition. Our focus is on our cost on the customer and providing value for the customer and building an amazing service for the customer, but doing it in an efficient capital efficient profitable manner, which allows us to keep on investing for a very long time to bring in more customers to the platform.
If I look at Europe, it's still very early and all of our markets.
Most of the markets in Europe as well so yes.
Yes, there is competition there will always be competition, but ultimately it's a game of execution of how you build value for the consumer.
Great. Thank you so much.
Next one on a Q is Eric Sheridan from Goldman Sachs. Your line's now open.
Thanks, so much for taking the question just one really when you think about what you framed as the potential for EBITDA looking out to 2022, and how <unk> fits into that broader framework can you talk to us a little bit about your biggest priorities, including executing against this act would acquisition about what would push you to the upper or.
Lower band of some of those profitability outcomes as you look out over the next 12 to 18 months. Thanks.
Alright. Thanks.
Thanks for the question.
<unk>, formerly providing to when you're going into guidance really the purpose of the zero to 500 EBITDA range was to signal that.
Post acquisition was by the way.
Has to go through regulatory review and compete assuming the deemed complete we expect the combined company to have adjusted EBITDA.
Youtube toward Jordache would do on a standalone basis the 2022.
And so.
Despite the combination of it doesn't change our priorities of RBC.
First to build the number one food app in the U S second to continue adding multiple categories beyond food and expand into convenience grocery pet food retail and so on so as to continue building the platform side of our business with door dash driving storefront and fourth to continue building a global company.
And the vote.
Conversations we're having today is a huge part of it.
Yeah.
Alright next one on the Q is Douglas Anmuth from Jpmorgan. Your line is now opening.
Thanks for taking my questions I wanted to ask about SaaS Paas you talked about the 9 million plus members I was hoping you could share a little bit more just on their characteristics in terms of frequency in the order size and perhaps around new vertical adoption relative to non dash Paas members and then you mentioned Canada.
Australia share gains, but obviously early.
Some of the international markets just curious if you expect the offering to work the same way.
As you expand more internationally going forward. Thanks.
Doug Thanks for the question.
We are excited about <unk>.
Primarily.
Affordability play as you think about it because it was zero delivery fees as well as.
Reduced service fees for production months numbers.
Interesting thing about batch buses that actually helps with overall intervention best plus members on heightened attention compared to those that Mark you dashboards engagement levels are significantly higher we haven't disclosed exactly how much of a desk.
And third we see dash plus members.
Greater tendency to adopt across not just multiple types of products and delivery and pick up but also across multiple categories and so to me I view dashboards membership increases as a leading indicator in terms of in terms of future growth and really the opportunity for us as we think about the things that the membership base can be with $9 million.
With millions of other <unk> that currently use door dash dash plus members and we've got work to do in order to convert them to benchmark numbers beyond that with millions of other people that don't do door Dasher government. So for us as we continue making advances in terms of selection both on the restaurant side as well as the other guy.
<unk> improved the quality the delivery experience and continue to work on affordability.
And our hope is that that membership.
<unk>, which will drive future growth.
On the question on Canada, and Australia with its as long as it was in the U S. As it comes down to the same three vectors of selection quality and affordability. There is no other secret sauce, and we will continue to make progress improving in all key dimensions, which is translating into intervention gains and category share gains.
Great. Thank you Peter.
Next one on the Q is Michael <unk> from Bank of America. Your line is now open.
Hey, Thanks for taking my question.
Just couple on Walt I was wondering pretty surprising to see such high growth. This year in 2021 when there's.
Kind of more post pandemic and there should be higher mobility, having.
Presumably some deceleration on growth. So can you talk about what's driving the outsized growth for both.
It doesn't look like geographic expansion. So is there maybe.
Maybe non restaurant expansion or category expansion that <unk> seen thats contributing to the higher growth.
Alright, thanks for the question.
Actually a variety of things I don't want to go into a lot of detail.
These flows as well.
It's not because of adding new countries, it's because of strong retention and that's because this is against customer acquisition.
Acquisition strength.
It's because of category expansion into or beyond beyond food and so yes, we like to exactly the point that you do the job, which is continued strength. Despite the fact that we're now sitting there towards the end of Q1.
There's also the dynamic again so.
All of those data points I think that we saw the word excited by and frankly the customer too.
Great product experience.
Good product that Nikki and his team have built.
Yes, I mean people 80 to 100 times two times a month, so if youre talking about like an average monthly frequency upgrade for like the reality is that like we're still a very small part of <unk>.
Our customers' lives and if you look at the broader population most people have never even tried to surface like us.
So we're only getting started and when you look at like the markets, we operate in expanding to new cities, bringing new merchants on the platform.
And increasingly being much more than.
The restaurant food delivery service expiring to retail and other categories. So ultimately.
It's an execution game.
Best possible provider for their for the customer you know you will have customers using your more frequently more often and new customers coming to the platform and that's what we're focused on.
Got it thanks, so much.
Next one on accused Youssef Squali from curious Securities. Your line is now open.
Great. Thank you very much two questions from me. Please first on the acquisition can you maybe just speak to the level of integration needed for you guys to deliver on the vision just trying to understand what are the low hanging fruit versus thinks that it may take longer.
Two.
To execute on just considering the large large.
Footprints.
The.
The acquired company and second.
Maybe he.
If you can comment on the Albertsons partnership that you've announced last quarter any learnings from.
That for grocery delivery I think you had initially talked about a couple of thousand stores and do you anticipate any more partnerships by year end. Thank you.
Sure.
I'll take both of those on the first question.
This partnership is really about acceleration and expansion to play for a bigger prize on an even larger global states.
Both bolt and toward asset.
Done a remarkable job in building the best product possible in their respective markets and really when I think about the combination now serving over 700 million people want that.
Deal is closed in the first half of next year, we have a lot of work to do.
We have a lot of worthy keep delighting, our customers and offering the best combination of selection quality price and service.
And that is true in the restaurants category. That's also true beyond restaurants. So there's a lot of work to do.
And in that vein.
We really could use all the talented teammates possible I mean this partnership is not about cost synergies because partnership is about acceleration and expansion and and when we're very very excited for the long runway ahead.
Your second question I think it was with respect to Albertsons, it's been a fantastic partnership with Albertsons Youre right. We've now launched.
On their entire footprint over 2000 stores.
And we continue actually to see other partners added into this category in fact in the third quarter, we announce them over 40000, now non restaurant stores, including our recent additions of total wines and more life's markets and <unk> markets in the grocery category. If that's what you're focused on and also a bed bath and beyond so even beyond.
Food and liquor.
As we discussed there are.
Four big areas of work right now at Jordache, We're building the number one food App, we are getting into new categories, such as convenience and grocery I mean, those are relatively new categories, where it I know, we're the leading platform in the U S and convenience of it though was a long long ways to go there.
We're continuing to invest in services to help merchants build their own digital business with products like grass drive and storefront and obviously, we're making a big announcement today on our international business and so again.
Theme, even in both of your questions is how do we make sure. We have single threaded leadership in order to have both speed and quality of execution across all of these priority areas.
Yeah.
Thanks, Tony.
Excellent on a Q is very material.
Turning from Needham and company. Your line is now open.
Great. Thanks for taking the questions just two for me Tony as you think about the next 12 months to 24 months in isolating the U S. What do you see as the greater near term opportunity for either increasing the frequency of usage from the base.
As a result drive even more dash paas members or just continue to expand the total number of customers on the platform and then just follow up on Dash Paas.
The 9 million customers certainly more than we were expecting and it's been awhile. Since you provided I think it was last year you provided a $5 million can you talk about the cadence of getting from the $5 million to the $9 million.
Yeah, I'll take the first one and maybe I'll, let <unk>.
Premier.
To follow on the second one so on.
On the first one with respect to just the opportunity.
In the U S.
We're still pretty early I know that obviously tell that it was a big accelerator into the business and in fact, you've seen a lot of the resilience of that consumer behaviors stay even though in store dining has returned to effectively all time highest according to the latest census Bureau step that I saw in Q3.
So there's just a lot of work still to do in the restaurants category alone.
Yes, we're seeing consumer engagement higher than pre COVID-19 levels as Premier mentioned, there are a lot of customers that have never used toward asset certainly have customers that used to order. So there's a lot of them that are not a part of desktop that's certainly an opportunity another big opportunity I would cite is really are working to other categories. We are.
Quickly marching into these other categories in the first quarter, we announced single digit percentages of our monthly active users having shop in a non restaurant category that number is now up to 12% in the third quarter.
But again these categories of convenience or grocery or alcohol.
They're very very very young.
There is a massive runway ahead and certainly a lot of work to do in order to invent to bring these categories online.
In for Brian on your question of cadence.
Not sure exactly what Youre looking for with your question is.
The speed at which we have added back about celgene, whether it was on for until the end of the pandemic.
This quarter.
Quarter on quarter growth in the plus membership program every single quarter since we launched the program.
Understood. Thank you.
Next one on the Q is Jason <unk> from Oppenheimer <unk> Company. Your line is now open.
Okay.
Taking you there.
Let's go on to Brad next question, and then I'll come back and lots of them.
Alright, so for the next question, we do have Brad Erickson from RBC capital markets. Your line is now open.
Thanks, So just a couple of I guess, one how should we think about the brands going forward here do you go with multiple brands.
The markets are kind of in her or his door dash, maybe eventually takeover in certain countries and then second.
Second.
When you look at the priorities here once the deal does close is it really to just focus on the existing countries, where both our operating or might you would also look to expand into new countries with either of the brand. Thanks.
Yeah, I'll take that one hey, Brad.
I guess crawl walk run like like I say, a lot internally and first we have to wait for the deal to close which we expect to happen in the first half of 'twenty two.
Second point around I think your question was around brand.
These are hydro local businesses.
And at.
At the same time, while they share the kind of global commonality that people, regardless of where they live eat three times, a day and shop in this category over 100 times, a month and are always seeking more marketing mediums.
And brands tend to be hyper local.
And so we're going to optimize for how do we serve customers merchants and careers in the best possible way and they're hyper local area. In fact that nothing is going to change in terms of the quality of service certainly day one.
I only expect that to increase over time.
With respect I think.
The second part of your question around.
The existing footprint versus adding footprint.
[laughter].
We have a lot of work on our plate I mean, there's 700 million people that post deal close we're going to have to continuously delight and.
While we have the benefit and the privilege of living in a high frequency category. We also recognize that it's an execution oriented business, where you have to earn every single order and every next order before we can earn the privilege of serving our customers. The next time, so not much more to say than that right now besides super excited.
The announcement today with a great team that shares our vision as well as the way we operate and there's a lot of work ahead of us.
Yeah.
That's great.
Excellent on a Q is Steven Fox from Fox Advisors LLC. Your line is now open.
Hi, good afternoon, two questions if I could just on the acquisition it sounds like theres areas, where.
You both have different kinds of.
Efficiency improvements versus the other I was wondering how you envision sort of getting best practices out of the two platforms and then secondary secondly can you just talk a little bit about the ads growth I understand your you said in the letter you're reinvesting profits from ads, but could you give us a sense for how it is growing and how successful it's been in the last quarter. Thank you.
Sure I'll take the first and I'll, let premier follow up on the ads question with respect.
To the first question.
On efficiency.
There are no silver bullets and this business, that's what I've learned I mean, there's literally efficiency everywhere from the consumer shopping experience itself to merchant operations to customer support to drive our efficiency, which I think sometimes.
Gets quite a lot of attention.
There is literally.
<unk> equation in which you have to look at every component part break it down into its inputs from first principles.
Build the best possible combination of selection of quality price and service for customers.
And Youre, absolutely right I mean, the voltage has done an amazing job with that the door asked team has as well.
And post deal close we certainly will.
[laughter].
Share best practices, but but there are no silver bullets here, it's an execution oriented business, where you really have to understand how the inputs translate into the outcome.
And you have to work every single variable.
Hi, Steven on the question about.
And so it's.
We're not disclosing AD revenue at this point, what I will say is.
We're being careful about how we build in Virginia and merchant service.
And it's not an EBITDA of <unk> and what it means.
But that is where we're taking our time to ensure.
<unk> remained strong franchises, while ensuring that the customer experience remains neutral.
To make it to the customer experience and as you pointed out you know as we.
As you make more progress gross profit dollars are going to be invested back into growth initiatives you I made the point and since joining the company from our perspective.
Great. That's all very helpful. Thank you.
Yeah.
Thanks, one on the line is James Lee from Mizuho. Your line is now open.
Thanks for taking my questions.
Hoping to get an update on dash Mara.
The key learnings that you guys are seeing so far.
And what do you need to see for this business to expand should we think about this business is a complementary business scale to a point into a main product. Thanks.
Thanks for the question James.
A building.
Unions business consists of <unk>.
<unk> and <unk> offerings in the centers from a customer's perspective altogether about is that they get the <unk>.
Section will be needed.
Quality in it.
In a falling price so to us it's a.
Hybrid strategy that involves both <unk> and can you be partnerships in order to ensure that the selections available and the best quality and price.
The latter part of your question.
At the end of the day.
Two one which are almost selection just like anything else and it allows us because it's first party to include not just food not just grocery, but potentially airports or other things that the customer wants and demands.
It's a core component of the strategy, where we're investing in it which is.
The second priority I mentioned earlier in the conversation and you can expect more updates as we make progress, but nothing would prevent because things can move.
Thank you.
Alright next one on the Q is Jason those team from <unk> Company. Your line is now open.
Thanks for letting me back in again the multitasking.
Sorry, guys just file the.
Well.
[noise] perspective, but maybe maybe I'll ask maybe it's in there but.
How did you think about valuation there I don't know if there is something.
We want to share as far as like.
Trailing 12 month revenue gross profit or just any thoughts how you thought about valuation.
And then in the first quarter, you mentioned, 7% of the business with some non restaurant orders if any.
Any update there.
Thanks.
Okay.
Just one on the Q is Brian Fitzgerald from Wells Fargo.
Line is now open.
Sorry.
To Jason's question.
Got it okay.
Thank you for the question.
So we didn't do excuse me automate some new verticals.
So what we did say is that the customers are any news at all due from categories outside of restaurants, we would be 8% in September and December was single digit back in back in Q1. That's the second question the loss on the question of.
Evaluation, we are disclosing anything other than the current Andre <unk> from.
From Fulton Bank as we thought about the valuation we looked at the nonprofit prevention of the good news is given the retention dynamics, you're seeing in the unit economics.
The market is one of the the runway Union volt currently is $2 5 million in the us.
The countries in which you don't put it in these countries have even.
And in 70 plus million people sort of another one with a group in.
I do believe in the team and I believe if we execute one of them.
We think regenerative agent that can return.
Sure.
Okay.
Okay.
Alright, Brian Fitzgerald Your line is open.
Thanks, guys, maybe a follow up on both can you talk about the level of batching that you've done there historically, if you track that how it has progressed and then.
On door Dash wanted to know if we give you update on the reception and the adoption levels of the more recent.
625, 30 commission levels, how thats progressing if youre seeing people move out of one bucket into another thanks.
Yes, maybe on the question of Batching as I said look the companies operating independently today, where we're not going to provide an update on boots batch numbers at this time.
On the adoption of the rest.
The centers.
We said last quarter with the majority of our restaurants have chosen the premium.
No real update on those metrics other than to say that the demand mix have outperformed our expectations in the question Julie unit driving your question maybe.
Maybe you said this was a smaller factor versus only the other movements given our investments.
Thank you Eric.
Yeah.
Thanks Robert.
Next question comes from Mark Mahaney from ISI. Your line is now open.
Thanks <unk>.
Presentation describes Finland as having one of the most difficult markets for last mile local logistics could you explain why what's particularly difficult about that market and I ask that because the follow up question is when you think about the.
The attractiveness of the European markets Eastern Northern European markets, where this acquisition.
If it's successful we'll take you is there something about those markets, that's more or less attractive than what you currently face in terms of regulation.
Hey, Bill.
Income requirements.
Some for workers for and classification of workers et cetera. So is there something about those markets that makes them more or less attractive that can still be it they can still be intrinsically attractive, but less attractive than the current markets that you're in thank you.
Yeah. So so I can maybe start so if you look at our type of a business like ultimately, it's the marriage of efficiency and customer experience.
Why it's been a difficult like Nordic countries have the lowest the company starting in the world and it means that are kind of blended R&D cost is going to be.
Surprising or close to our average order value. So when you connect them all to work by the way a question six there's not really tipping culture. So you have to survive on relatively low delivery fees.
<unk>.
There is not a very strong pre existing deliberate culture. So you have to basically educate consumers to use deliberate.
And then like cities are not very high high density.
Not very big so like you need to be able to do it.
Succeed in environments, where order density is not going to be very high for a very long time if ever.
I'm going to stop it off like we have very harsh winters. It's his stock for most of the year and so forth. So it's just it's difficult to do what can we do in the financing process that actually came out of the out of Finland. The nordics with realize that every other country. We saw was a lot easier for us to do bigger spike here like you used to get.
Every signal out of the model to work out a little bit more efficiently to be able to operate.
Yeah, Mark what I would say or what I would add to that is.
I think with the whole team has really proven is regardless of market people eight three times a day.
And they're always seeking convenience options and what's been really attractive about frankly, they're markets or even.
Larger market with just how early the runway is both in the food category as well as beyond.
Okay. Thanks, a lot.
Okay.
Next question comes from the line of Ralph <unk> from William Blair. Your line is now open.
Good afternoon, and thanks for taking the question just on the driver supply just curious what are the trends that you're seeing now that some of the government subsidies are starting to win I know in the letter you talked about the average active hour increasing by about 9% or so so just curious more on the supply if youre sort of attract and retain drivers in this current environment.
Okay.
Yeah.
I can start.
Okay.
Dasher supply I think has been very very healthy.
In the second and the third quarter and I think again, what you see is just.
Again over 90% of these bashers worked fewer than 10 hours a week and the average dasher is under five hours a week and so if you think about just the nature of that work. It truly is very different and frankly very complementary to traditional.
Job as a result of which that.
That's why we saw over 3 million bachelors in the quarter.
That has earned.
Over $2 8 billion.
And dasher pay has actually increased by over 30% per active out there and so.
It's been it's been very healthy, but this is again a business, where it's very very dynamic as we head into Q4 with seasonality, we're going to have to make certain preparations and changes and we saw that also with exogenous.
As well in Q1 with some of the stimulus money coming in and driving up demand and so but in general, though because of the nature of the work and how flexible it is a dasher supply has been relatively healthy.
Okay, great. Thanks, Dan.
Next question comes from the line of Alex Potter from Piper Sandler Your line is now open.
Great. Thanks, very much was hoping you could give an update on drive I know historically, you haven't wanted to disclose specifics there, but maybe just qualitatively.
How is drive been going and then a follow up question also related to drive is there an analogous sort of white label service with bolt I know that historically the European markets, maybe have been more mom and pop less for large franchises.
Just curious the extent to which you would consider a white label offering.
In Europe as well.
Sure I'll start on drive you're absolutely right I mean, it's.
Drive is a business that we've launched now for over five years in it which really started in 2016 and it really started as a service to help restaurants and build their own digital business for on demand delivery, but since it's really growing into.
The last mile logistics system for all retailers I mean, it's a.
Privilege to get to work with businesses really across every category, whether it be grocery or health and beauty or general merchandise.
And we've seen it across the board and so the drive business.
<unk> has really diversified as well.
But we have a long ways to go in building our platform services business in which we not only want to create the largest local commerce marketplace.
Also want to build the largest local commerce platform. We have to help these businesses certainly with logistics, that's one component, but everything from a customer acquisition, the customer service or things that you're going to have to do as a business owner in order to build a digital business and so we're quite a long ways to go on a platform services roadmap drive is a huge part of it.
And we're excited to the brand.
Most places.
Okay, great. Thanks.
Again, if you would like to ask a question. Please press star one.
Next one on a Q is Robert <unk> from Gordon Haskett Research. Your line is now open.
Thank you Tony when you look at the heavy users that arent.
<unk> Paas members what are some of the recent those consumers haven't signed up and what levers can you pull to change that.
Yes, it's a great question.
So.
Again customers value or are evaluating us.
Across four dimensions right the selection.
Of stores.
The quality of the delivery experience as measured by speed timeliness and accuracy.
Certainly the affordability of the program, which youre referencing dash crafts and customer support and so.
Those are all of the things that we have to get right to be a valuable enough service, where we can earn the privilege.
Getting that dash Paas number.
<unk>.
And you can see that we're doing and working all of these areas there isn't necessarily one thing that we can do to drive up.
Membership, it's really working on all of the inputs I mean big.
A big part of selection in addition to adding more and more restaurants and different ways of interacting with those restaurants are not only the leading platform for delivery and that's where also the leading platform for pick up for example in the U S.
As other categories.
And as mentioned both in our.
In our shareholder letter.
Progression from low single digits or single digit percentages in Q1 of our active user base trying a non restaurant category to now 12% in the third quarter, I mean, thats showing some of that progression, but we have a long ways to go there. The quality is something that we're constantly obsessing over constantly trying to shave seconds and minutes of inefficiency out.
This system, which constantly trying to improve our accuracy.
As well as just making it easier also for deliveries to be completed on our platform.
And with respect to service and affordability, we're always trying to deliver more value to consumers more value to merchants and more value to doctors. So a lot of work remains to be done no single silver bullet, but it's really about working the inputs to offer the best combination so that we can earn that.
Privilege of having more members into dashboards.
Great. Thank you very much.
Alright that was our last question I will now turn the call over back to Andy.
Thank you everybody for joining us and thank you Tony Nikki and Premier We will talk to you all soon.
Good evening.
Okay.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
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Yes.
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