Key facts
- DoorDash CEO Tony Xu was surprised by the high prices consumers are willing to pay for food delivery.
- Xu's skepticism was evident during DoorDash's initial partnership with Taco Bell in 2015.
- He believed that delivery fees and increased item costs would deter customers from ordering fast food.
- DoorDash now offers Taco Bell delivery across the U.S. and partners with numerous other national chains.
- Xu attributes the continued demand for delivery to consumers valuing their time for other activities.
DoorDash CEO Tony Xu admitted that he was surprised by the extent to which consumers are willing to pay a premium for food delivery. In an interview on the Uncapped with Jack Altman podcast, Xu revealed his initial skepticism about the viability of such a business model, particularly for inexpensive fast-food items.
He pointed to DoorDash's first national partnership with Taco Bell, launched in 2015, as a prime example of his doubts. At the time, Xu worried that the added costs associated with delivery, including fees and higher item prices, would deter customers from ordering. However, the widespread adoption and continued demand for food delivery, even for budget-friendly meals, have exceeded his expectations.