Here's why Uber Eats and Deliveroo rival DoorDash chose Melbourne over Sydney for its Australian launch

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  • US-headquartered food delivery app DoorDash will officially launch in Australia on Wednesday in its first international expansion outside North America.
  • DoorDash Australia general manager Thomas Stephens told Business Insider Australia that Melbourne’s “vibrant, diverse food scene” attracted the company to the Victorian capital over other Australian cities.
  • DoorDash claims to be the “largest” food delivery app in the US with 700,000 drivers and 310,000 restaurants across 4,000 cities on its books. The company declined to release its total number of users.

Australia’s on-demand food delivery market will heat up from Wednesday as the largest platform in the US officially launches in Melbourne.

DoorDash — which claims to have 700,000 drivers and 310,000 restraurants across 4,000 cities on its books — has confirmed Australia will be its first international expansion outside of North America, as first reported by The Sydney Morning Herald and The Age.

The platform will launch in Melbourne across inner-city locations before rolling out in the greater metropolitan area later in September, a statement from DoorDash announced. Users will be able to order from outlets including Nando’s, Betty’s Burgers, Bay City Burrito, Il Gusto, Misschu and Cedar Bakery.

Asked why the company chose Melbourne for its Australian pilot, DoorDash Australia general manager Thomas Stephens told Business Insider Australia that Melbourne’s reputation as a food destination attracted the company to the Victorian capital over other Australian cities.

“Melbourne has an incredibly vibrant, diverse food scene, yet to date Melburnians living in the suburbs have had limited delivery options,” Stephens said in an email.

“This combination made Melbourne an attractive international opportunity for us, as closing selection gaps has become a core competency of ours at DoorDash.

A statement announcing the official launch described the city as “Australia’s foodie capital” and said its decision to bring the “CBD luxury” of on-demand food delivery to the outer suburbs was an “Australian first”. A DoorDash spokesperson clarified to Business Insider Australia that it believes it will be the delivery app with the widest selection of restaurants available to customers in outer metro areas.

To entice customers in an already competitive market, DoorDash is launching with a number of promotions in Australia. Its ’30 or $30′ guarantee will see customers earn a $30 voucher if their meal is not delivered within 30 minutes.

And in the first 30 days from launch, DoorDash will be waiving its delivery fee on orders more than $10. After that, delivery prices will depend on the restaurant, the spokesperson told Business Insider Australia.

It also says its offering to drivers is compelling, describing it as an “Australian-first on-demand transparency model, providing upfront earnings per delivery, enabling them to accept or reject delivery jobs at their own discretion”.

DoorDash talks a good game on its “flexible contracting opportunities” for drivers. But so does its competitor Deliveroo — and it faces a lawsuit in the Federal Circuit Court over alleged exploitation of one of its Canberra drivers.

German delivery service Foodora’s industrial relations woes got so bad it packed up and left Australia in 2018 as the Fair Work Ombudsman pursued it over sham contracts.

If DoorDash can keep drivers — and the regulators — happy, it could provide a much-needed competitive advantage for the US challenger.

But ultimately, it’s customers — not drivers — who will determine whether DoorDash can establish itself as a permanent presence in Australia and avoid Foodora’s fate.

And for that it might have to look beyond just Melbourne.

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