DoorDash files papers to go public

In the IPO prospectus filed with the Securities and Exchange Commission, DoorDash chief executive and co-founder Tony Xu said the company has sought to fill in the gaps for the restaurant industry, which has struggled since the coronavirus pandemic led to widespread stay-at-home orders and capacity restrictions.

“While small businesses are vital to our communities and created approximately two-thirds of net new jobs in the United States from 2000 to 2018, they now risk being left behind in the convenience economy where consumers have become accustomed to obtaining everything in a few clicks, a trend that has only accelerated in a covid world,” Xu said. “Helping brick-and-mortar businesses compete, succeed and flourish in these rapidly changing times is the core problem we are trying to solve.”

The San Francisco-based company reported $1.9 billion in revenue in the nine months ending Sept. 30 — more than tripling the $587 million posted during the same period a year ago, according to the filing. During the same nine-month time period year over year, it cut its losses from $533 million in 2019 to $149 million this year.

DoorDash employs 1 million drivers, called “Dashers,” who serve 390,000 merchants and more than 18 million customers in the United States, Canada and Australia, as of Sept. 30, the filing said.

DoorDash plans to list on the New York Stock Exchange under the symbol DASH. The company is offering three classes of common stock for sale. Owners of class A common stock will have one vote per share; class B common stock owners will be entitled to 20 votes per share; and class C common stock owners will have no voting rights.

DoorDash, like Uber, Lyft and other companies, helped power through California’s Proposition 22, a ballot measure that established gig workers as independent contractors. Their $200 million campaign pitched the change as necessary to improve working conditions for drivers. But labor groups and advocates say the protection isn’t enough for drivers, who still don’t have minimum wage, employer-provided health care or bargaining rights.

In Friday’s filing, the company acknowledged the risk for the company’s pay model and overall financial condition if the company can’t attract and retain Dashers or their status as contractors is reclassified under federal law or in other states.

“[While] we maintain that Dashers that utilize our platform are independent contractors, there is a risk that Dashers may be reclassified as employees under federal or state law,” the company said. “In such case, certain provisions regarding compensation, along with certain other requirements, will become applicable to us and Dashers in California, and our costs related to Dashers will increase in California, which could lead us to charge higher fees and commissions, which in turn could result in lower order volumes.”

Xu said he co-founded DoorDash in 2013 because he was inspired by restaurant industry employees like his mother, who worked as a server at a Chinese restaurant for 12 years while she saved up enough money to go back to school and return to her career as a doctor after immigrating to the United States.

“DoorDash exists today to empower those like my Mom who came here with a dream to make it on their own,” Xu said. “Fighting for the underdog is part of who I am and what we stand for as a company.”