Food delivery giant DoorDash announced Wednesday that it anticipates allocating over $50 million during the spring quarter to assist its drivers with escalating fuel expenses.
The California-based company launched a temporary compensation program last month for drivers across the United States and Canada to help counter the dramatic surge in fuel costs linked to the conflict in Iran. Current gas prices average $4.53 nationally, representing a 44% jump from the previous year, based on AAA data.
Despite elevated fuel costs, DoorDash reported that customer appetite for delivery services stayed robust during the first quarter. Order volume climbed 27% to reach 933 million transactions, though this figure came in below Wall Street projections of 954 million orders tracked by FactSet research.
Financial performance also missed analyst targets. The company reported quarterly revenue growth of 33% to $4.0 billion, falling short of the anticipated $4.15 billion that market experts had predicted.
DoorDash indicated it will finance the fuel assistance program by reallocating funds from other planned initiatives. Last fall, the company outlined ambitious expansion plans for this year, including integrating restaurant booking capabilities into its platform and launching automated delivery services.
Quarterly profits decreased 5% to $184 million, equivalent to 42 cents per share, during the three-month period ending in March. This decline was partially attributed to research and development expenses that increased 30% compared to the same timeframe last year.
However, earnings performance exceeded analyst predictions of 36 cents per share, according to FactSet data.
Following the earnings announcement, DoorDash stock prices jumped more than 11% during after-hours trading Wednesday.
