McDonald’s struck a delivery deal with DoorDash, the companies announced Tuesday, putting an end to the fast-food giant’s exclusive setup with Uber Eats.
McDonald’s was one of Uber Eats’ first big grabs when the company launched U.S. meal delivery two years ago. The platform is currently offered at more than 9,000 McDonald’s locations in the U.S.—more than half of its domestic footprint of 14,000 or so locations. It’s a $3 billion business for the chain.
Per The Wall Street Journal, McDonald’s had recently opened up discussion with other delivery providers, including Grubhub in addition to DoorDash. McDonald’s Senior Vice President of Operations Bill Garrett told the WSJ McDonald’s wasn’t closing the door on partnerships with other delivery services and knows “customers are very loyal to particular apps. We want to provide that level of convenience,” he told the publication.
The DoorDash deal is launching first in the Houston area with more than 200 restaurants on July 29. “In a few short years, McDelivery, has become an important part of our growth and our customer-centric strategy,” Chris Kempczinski, president of McDonald's USA, said in a statement. “Building on the success of McDelivery in the US, we're excited to make McDelivery accessible to customers on DoorDash, which is available in all 50 states and reaches 80 percent of Americans, making it even more convenient for our customers to enjoy their favorite McDonald's menu items on their terms.”
McDonald’s will also be a part of DashPass, it said. DoorDash’s subscription program offers members unlimited zero-dollar delivery fees on orders of $12 or more to select DoorDash merchants for a $9.99 monthly fee. It has nearly a million members signed up.
“McDonald's is a customer favorite and a leader in its craft, and it's an honor to offer their loyal fan base more ways to enjoy McDelivery through DoorDash,” added Christopher Payne, chief operating officer of DoorDash, in a statement. “Our leading U.S. market share and best-in-class operations paired with McDonald's scale makes this an attractive, win-win partnership. We're thrilled to add McDonald's to our robust selection of DashPass restaurants to allow customers premier access to their favorite foods without delivery fees.”
McDonald’s and DoorDash integrated their systems so orders could be sent directly to restaurant’s point of sale, the company said.
DoorDash was most recently valued at $13 billion after a $600 million funding round in May.
According to the WSJ, the partnership will likely expand nationally this year if it succeeds in Houston. Garret said, “it was the reach that was really appealing to us,” citing the claim DoorDash’s fleet works within delivery distance of 80 percent of U.S. households.
Last year, McDonald’s negotiated down the commission paid to Uber to handle its orders. The aggregator also agreed to funnel more resources into marketing and promotions. The new deal ended their exclusive partnership as well.
Many of the changes came as franchisees pushed McDonald’s to renegotiate the deal over margin and profitability concerns.
Having multiple partners—a strategy deployed by many chains—could allow McDonald’s to expand the service and reach additional customers where certain platforms dominate regional share, as well as have enough operators involved to satisfy marketing efforts.
It recently introduced a National French Fry Day (July 13) offer that offered free medium fries with any order, exclusively on Uber Eats.