DoorDash said Wednesday it expects to spend more than $50 million in the second quarter on gas price relief for its delivery drivers.
The San Francisco-based company said in March that it would offer extra compensation to U.S. and Canadian drivers as part of a temporary program to offset a sharp increase in gas prices due to the Iran war. The national average for a gallon of gas on Wednesday was $4.53, up 44% from a year ago, according to AAA.
DoorDash said demand for deliveries remained strong in the January-March period despite higher gas prices. Total orders rose 27% to 933 million. But that fell short of Wall Street’s forecast of 954 million, according to analysts polled by FactSet.
Revenue also fell short of expectations. DoorDash said its revenue rose 33% to $4.0 billion, which was shy of the $4.15 billion analysts were forecasting.
The company said the gas price relief is being funded by adjusting investments in other areas. DoorDash said in November that it would be investing heavily in new products and services this year, including the addition of restaurant reservations in its app and robot deliveries.
DoorDash said its net income fell 5% to $184 million, or 42 cents per share, for the January-March period. That was partly due to a 30% increase in research and development costs compared to the same period last year.
That beat analysts' forecast of a 36-cent per share profit, according to FactSet.
DoorDash's shares rose more than 11% in after hours trading Wednesday.
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