DoorDash will spend more than $50 million in the second quarter on gas price relief for its delivery drivers, the company announced, as elevated fuel costs driven by geopolitical tensions continue to squeeze gig economy workers across South Florida and the nation.
The San Francisco-based company first announced extra compensation for U.S. and Canadian drivers in March as part of a temporary program to offset a sharp increase in gas prices. The national average for a gallon of gasoline stood at $4.53, up 44% from a year ago, according to AAA data released last week.
DoorDash chief financial officer Ravi Inukonda told investors the company had to defer other investments to fund the relief. “We did have to push out some investments in order to make room for this,” Inukonda said on a conference call. “If we do decide to extend the program, our goal is to find offsets.”
The company’s first-quarter results showed demand for deliveries remained strong despite higher fuel prices, with total orders rising 27% to 933 million. That fell short of Wall Street’s forecast of 954 million, partly due to winter storms that dampened demand in some markets. Revenue rose 33% to $4.0 billion, shy of the $4.15 billion analysts expected.
DoorDash reported net income fell 5% to $184 million for the quarter, partly due to a 30% increase in research and development costs. Still, the per-share profit of 42 cents beat analyst forecasts, and the stock rose more than 11% in after-hours trading.
For Miami’s sizable gig workforce, the gas relief program provides a critical buffer. South Florida’s sprawling metropolitan geography means delivery drivers log significantly more miles per shift than their counterparts in denser cities. The relief program comes as rival Uber expands its own offerings, recently adding hotel bookings through a partnership with Expedia Group.
Source: NBC Miami | Business of Miami
