Good day, and thank you for standing by. Welcome to the DoorDash Q3 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, press star zero. I would now like to hand the conference over to your speaker today, Mr. Andy Hargreaves. Please go ahead.
Thanks, Kaelan. Hello everyone, and thanks for joining us for our Q3 2021 earnings call. I'm pleased to be joined today by Co-founder, Chair, and CEO Tony Xu, and CFO Prabir Adarkar. I'm also pleased to be joined by special guest, co-founder and CEO of Wolt, Miki Kuusi. I would like to remind everyone that we'll be making forward-looking statements during this call, including statements regarding the recently announced acquisition of Wolt, including market opportunity, expected benefits of the transaction, accretion, time to close, strategies of the combined company, and benefits to customers in the markets in which we operate, our expectations of our business, future financial results and guidance, and strategy.
Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in our forward-looking statements, and some of such risks are described in our risk factors, including in our SEC filings, including our Form 10-K. You should not rely on our forward-looking statements as predictions of future events. We disclaim any obligation to update any forward-looking statements except as required by law. During this call, we will be discussing certain non-GAAP financial measures. Information regarding our non-GAAP financial results, including a reconciliation of such non-GAAP results to the most directly comparable GAAP financial measures, may be found in our investor letter, which is available on our investor relations website. These non-GAAP measures should be considered in addition to our GAAP results and are not intended to be a substitute for our GAAP results.
Finally, this call in its entirety is being audio webcast on our website. An audio replay of the call will be available on our website shortly after the call ends. We typically go straight into questions, but given the transaction announcement, we'll have Tony and Miki give some brief comments before going into the Q&A session. For the Q&A, please note that Miki is happy to answer questions about his approach to the industry and his rationale for the combination. Please don't ask questions about Wolt financials or our outlook or future integration plans. Our businesses will remain independent until the deal closes, so we won't be answering those ones at this point. I'll now pass it on to Tony.
Great. Thanks, Andy. Hey, everyone. Thanks for joining us today. At DoorDash, our mission is to grow and empower local economies. We started in food delivery logistics, and our vision was always to build a platform that supports all of local commerce and to do it on a global basis. To date, we have executed against this primarily on an organic basis. That's not because we believe it must be done organically, but because our framework for M&A sets a high bar. For those who haven't heard it before, our M&A framework is comprised of three core standards. First, it must be talent accretive. We look for teams of superbly talented people that share our vision as well as our approach to execution. Second, it must unlock product categories and/or new geographies.
This means that we look for opportunities that expand our TAM either in a way that we couldn't do so on our own or in a way that is much more efficient than we could do so ourselves. Third, it must increase our long-term profit potential and add to shareholder value. Wolt handily meets all three criteria. We believe Wolt brings extraordinary talent, a world-class product, and operational expertise that will accelerate our progress. We've gotten to know Miki and the Wolt team well over the last few months, in fact, years, and believe that they are truly exceptional. They share our ambition to build a global platform for all of local commerce. They've established a culture based on innovation, intense operational rigor, and a bias for action.
These characteristics match our own, and we believe our strategic and cultural alignment make them the best team in the world to lead our international efforts. From a market perspective, Wolt operates in 23 markets, of which 22 are new markets for DoorDash. By themselves, we believe these markets provide an opportunity to grow our international business to multiples of what it is today. This should allow us to invest and expand more efficiently than we could have done on our own and on a faster timeline. Finally, Wolt's product scales to multiple categories. In certain markets, the company has already established a strong presence in categories ranging as far as cosmetics and electronics. As we look to grow our non-restaurant categories globally, we expect their product vision and expertise will improve our execution. From a financial perspective, the opportunity in local commerce is enormous.
We believe the potential in our combined markets create a substantial opportunity to grow gross order value to multiples of its current level. We expect to invest aggressively behind the Wolt team and believe their capabilities will improve our efficiency internationally while allowing us to increase our focus in the United States. By building a large and profitable local commerce platform is difficult to do in any market. Doing so across many markets simultaneously is exponentially harder. Attacking hard problems is what we like to do at DoorDash, and we know that the same is true for Wolt. We couldn't be happier to be teaming up with Miki and the extraordinary team at Wolt to execute against our shared vision. With that, let me hand it over to Miki.
Thanks, Tony. Hi, everyone. I'm Miki Kuusi, Co-founder and CEO of Wolt. My co-founders and I founded Wolt back in 2014 with the mission to build a new layer of infrastructure that connected restaurants and retailers, couriers, and consumers in a way that made cities better and people happier. We wanted to build the digital version of the shopping mall, but with the convenience that a modern logistics engine can enable. We did our first delivery in Helsinki, Finland, back in 2015. When we started, we knew a few things would have to be true if we were going to build the scale of the business we envisioned. First of all, we were going to have to expand beyond Finland.
In Finland, we have fewer than six million people, so to build a large business, we were going to have to be international from day one. We built everything about the service from product logistics to customer service with the idea of being easily exportable. This allowed us to launch 22 new countries in the five years from 2016 to 2020. Secondly, we were going to have to be efficient. In the Nordics, we have a challenging combination of small cities, low population density, high labor costs, and no tipping culture. That meant we had to build a business to operate at incredible levels of logistical efficiency in order to generate room for profitability. Thirdly, we had to build a product that consumers loved.
There was no room in our margin structure or our bank account to make up for poo-poor quality product with a huge customer acquisition spend. We had to make our marketing spend work by using our product to retain consumers at higher levels than what we saw at competitors. We've been on an incredible journey so far, but believe we are only getting started. We have one chance to build a leading global platform for local commerce. By joining forces with the team at DoorDash, we expect to put our combined company on a path to accelerate our efforts and bring greater levels of value to consumers, merchants, and couriers around the world.
Great. Thank you, Miki and Tony. Operator, we can take questions now.
All right. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Again, that is star one on your telephone. Please stand by while we compile a Q&A roster. First question comes from the line of Ross Sandler from Barclays. You are now live.
Hey, guys. I guess we knew this day was gonna come eventually with the European Cold War kicking off. I guess, Tony, the first question is, it looks like Wolt is doing about the same drops per hour as some of the competitors over there, and our understanding is they're number two in most of their markets. I guess what are you guys bringing to the table and how might the combination change that and kind of advance them to the top of the league table? Thanks a lot.
Yeah. Hey, Ross. I'll start and I'll let others here, you know, follow. I would say there are three big things that we saw about Wolt that are just really incredible. You know, first and foremost, this is a team that executes in a very similar way to DoorDash. I cannot understate how important that is when we're talking about an execution-oriented business, which is what we find ourselves in. You know, they really competed by building a winning product by focusing on removing every basis point of inefficiency, finding every penny of savings, and building a business that has compounded its efforts in delighting the customer and doing so in a very capital efficient way. The second thing I would say is they've built a remarkable business.
I mean, as you saw in the investor relations deck that we uploaded, the business has grown to $2.5 billion in annualized gross order value. It's growing triple digits. It's done so while also growing its bottom line at the same time. It's become very, very efficient, not only in its, you know, drops per hour, which includes idle time, by the way, but also just in how it's thought about everything from the consumer experience in conversion to customer support to localization, and so forth. They've built an incredible business. When you look at this, you know, capital efficiency combined with just how early their markets are, you know, as a standalone business, they just have a very large scale to grow into.
The final thing I would say is it really represents an accelerated, you know, timeline and speed for DoorDash. Wolt, because of where they started in their home country of Finland, a relatively speaking smaller country, they knew from day one, in order to achieve the scale of their ambitions, they needed to expand into a lot of geographies. They've now grown to, you know, 23 markets, of which 22 will be new to DoorDash. The combined team will be able to serve over 700 million people. Not only does it grow our TAM, but it allows DoorDash to have single-threaded focus here in accelerating our ability to compete on a bigger global stage.
Hey, Ross, just to add to Tony's point. Deliveries per hour is obviously an important metric, but there are other aspects of the P&L, we were actually amazed at what we saw in terms of Wolt's capital efficiency. The retention is also superb. What I'm trying to say with that is learning from Wolt will help increase the efficiency of our own international investments. The second point I'll make is Wolt has 4,000 people, and so if you think about what that does to our international org and our ability to expand internationally, it just raises our level of focus outside the U.S.
Third, it preserves our existing management bandwidth to go after the large opportunity that exists in the U.S. It allows us to sharpen that focus, not in the restaurant category in the U.S., but also in terms of new categories like grocery and convenience.
Great. Thanks, guys.
Next question comes from the line of Deepak Mathivanan from Wolfe Research. Your line is now open.
Great. Congrats on the acquisition. Thanks for taking the questions. One for Tony and one for Miki. Tony, wanted to ask about the driver supply and utilization here in the U.S. Now it seems like the driver acquisition trends are still pretty healthy, but with various categories on the platform scaling, you know, with kind of different on-demand needs for now, curious on your thoughts on whether it would make sense to deploy a dual model with part-time, full-time, you know, model together with the on-demand workforce. What are the things that you're watching, you know, potentially to explore this model? Then, maybe as a follow-up to Ross's question, for Miki, you know, wanted to ask about your thoughts on the broader European market. You know, where do you see kind of near to medium-term opportunities to expand next?
You know, given that the competitive intensity in some of the Western European markets is very different.
Yeah. Hey, Deepak. I'll start on the Dasher question then. I think there's actually, you know, a couple of questions in there. I think the first part is, if you look at Dashers, they're actually no different from consumers in the sense that they all value choice. You know, one of the things that we've seen is, you know, with over 3 million Dashers who dashed in the quarter earning over $2.8 billion. I think what really goes to show is that when you offer flexible opportunities as a platform, it really can be complementary to the traditional labor market. That's why I think you've seen healthy levels of Dasher supply in the marketplace that has grown to meet the demand.
As we've gotten into other categories, this is even offering Dashers even more choice and more flexible opportunities, whether it's doing grocery deliveries, convenience deliveries, et cetera. You know, I think the second part of your question really is around Dasher preference. At the end of the day, you know, we're a platform that always has built, you know, what Dashers wanted. Then, you know, starting from that basis of offering and what we hear time and again, you know, not just actually in the U.S., but really in all of our markets, is how much they value the flexibility to earn.
you know, starting from that basis and then working backwards with local regulators, elected officials, and anyone else really who wants to create different frameworks that really meet the modern-day realities of what it is that workers want, that's what we stand for. Go ahead, Miki.
Yeah. On competition in Europe, like, you know, a lot of people say that it's very intense. From where I'm sitting, like it doesn't feel that intense. I guess it's because when you're sitting in the pressure kettle for seven years, you kinda get used to the pressure. Like, competition has always been intense in our industry, and I expect it always will be. Like, this is an industry that is ultimately about how you're able to marry efficiency with customer experience. Like, the easiest thing in the world is to spend money to have an amazing customer experience, that's not a long-term sustainable business. When it comes to competition, like our focus is not on competition.
Our focus is on the customer and providing value for the customer and building an amazing service for the customer, but doing it in a capital-efficient profitable manner, which allows us to keep on investing for a very long time into bringing more customers to the platform. If I look at Europe, it's still very early in all of our markets in most of the markets in Europe as well. Yes, there's competition. There will always be competition, but ultimately it's a game of execution of how you build value for the consumer.
Great. Thank you so much.
Next one on the queue is Eric Sheridan from Goldman Sachs. Your line is now open.
Thanks so much for taking the question. Just one really. When you think about what you framed as the potential for EBITDA looking out to 2022 and how Wolt fits into that broader framework, can you talk to us a little bit about your biggest priorities, including executing against this acquisition, about what would push you to the upper or lower band of some of those profitability outcomes as you look out over the next 12-18 months? Thanks.
Hi, Eric, it's Prabir. Thanks for the question. We're not formally providing 2022 guidance. Really the purpose of the $0-$500 EBITDA range was to signal that, you know, even post-acquisition, which, by the way, has to go through regulatory review and compete. Assuming the deal completes, we expect the combined company to have adjusted EBITDA that's basically neutral to what DoorDash would do on a standalone basis in 2022. You know, despite the combination, it doesn't change our priorities. Our priorities still remain, first, to build the number one food app in the U.S. Second, to continue adding multiple categories beyond food, you know, and expanding to convenience, grocery, pet food, retail and so on. Third, to continue building the platform side of our business with DoorDash Drive and Storefront.
Fourth, to continue building a global company. The Wolt conversation that we're having today is a huge part of that.
All right. Next one on the queue is Douglas Anmuth from JP Morgan. Your line is now open.
Thanks for taking the questions. I wanted to ask about DashPass. You talked about the 9 million+ members. I was hoping you could share a little bit more just on their characteristics, in terms of frequency and order size, and perhaps around new vertical adoption relative to non-DashPass members. You mentioned Canada and Australia share gains, but obviously early, in some of the international markets. Just curious if you expect the offering to work the same way, you know, as you expand more internationally going forward. Thanks.
Yeah, Doug. Hi, Doug. Thanks for the question. Yeah, I mean, we're excited about DashPass. It's our primary affordability play, as you think about it, because there's zero delivery fees as well as reduced service fees for DashPass members. The interesting thing about DashPass is it actually helps with overall retention. DashPass members have higher retention compared to those that do not use DashPass. Engagement levels are significantly higher. We haven't disclosed exactly how much, but they are significantly higher. Third, we see DashPass members have a greater tendency to adopt across not just multiple types of products, so delivery and pickup, but also across multiple categories. You know, to me, I view DashPass membership increases as a leading indicator in terms of future growth.
Really the opportunity for us, as you think about the size of the membership base today with 9 million, there's millions of other MAUs that currently use DoorDash that aren't DashPass members, and we've got, you know, work to do in order to convert them to DashPass members. Beyond that, there's millions of other people that don't use DoorDash at all. For us, you know, as we continue making advances in terms of selection, both on the restaurant side as well as other categories, improve the quality of the delivery experience and continue to work on affordability, you know, our hope is that membership base grows, which will drive future growth. On the question on Canada and Australia, look, it's a slog like it was in the U.S.
It comes down to the same three vectors of selection, quality and affordability. There's no other secret sauce, and we're continuing to make progress improving in all three dimensions, which is translating into retention gains and category share gains.
Great. Thank you, Prabir.
Next one on the queue is Michael McGovern from Bank of America. Your line is now open.
Hey, thanks for taking my question. Just a couple on Wolt. I was wondering, pretty surprising to see such high growth this year in 2021 when we're, you know, kind of more post-pandemic, and there should be higher mobility having, you know, presumably some deceleration on growth. Can you talk about what's driving the outsized growth for Wolt? It doesn't look like geographic expansion. Is there, you know, maybe non-restaurant expansion or category expansion that Wolt is seeing that's contributing to higher growth?
Mike, thanks for the question. It's actually a variety of things. Again, I don't want to go into a lot of detail there until the deal closes, but it's not because of adding new countries. It's because of strong retention. It's because of customer acquisition strength. It's because of category expansion into beyond food. Yeah, we like exactly the point that you just observed, which is this continued strength despite the fact that we're now sitting here towards the end of 2021, you know, two years after the pandemic began. You know, all those data points are things that we saw, we were excited by, and frankly, it's a testament to the great product experience and the great product that Miki and his team have built.
Yeah. I mean, people eat 80-100 times a month. If you're talking about, like, an average monthly frequency of three-four, like, the reality is that, like, we're still a very small part of, you know, our customers' lives. If you look at the broader population, most people have never even, you know, tried a service like us. We're only getting started when you look at, like, you know, the markets we operate in, expanding to new cities, bringing new merchants on the platform, you know, and increasingly being much more than, you know, a restaurant food delivery service, you know, expanding to retail and other categories. Ultimately, you know, it's an execution game.
If you're the best possible provider for the customer, you know, you will have customers using you more frequently, more often than and new customers coming to the platform, and that's what we're focused on.
Got it. Thanks so much.
Next one on the queue is Youssef Squali from Truist Securities. Your line is now open.
Great. Thank you very much. Two questions for me, please. First, on the acquisition, can you maybe just speak to the level of integration needed for you guys to deliver on the vision? Just trying to understand what are the low-hanging fruits versus things that may take longer to execute on, just considering the large footprint of the acquired company. Second, maybe if you can comment on the Albertsons partnership that you've announced last quarter. Any learnings from that for grocery delivery? I think you had initially talked about a couple thousand stores. Do you anticipate any more partnerships by year-end? Thank you.
Sure. I'll take both of those. You know, on the first question, you know, this partnership is really about acceleration and expansion to play for a bigger prize on an even larger global stage. You know, I mean, I think both Wolt and DoorDash have done a remarkable job in building the best product possible in their respective markets. And really, you know, when I think about the combination now serving over 700 million people once the deal is closed in the H1 of next year, we have a lot of work to do. We have a lot of work to keep delighting our customers and offering the best combination of selection, quality, price, and service. That's true in the restaurants category. That's also true beyond restaurants. There's a lot of work to do.
In that vein, you know, we really could use all the talented teammates possible. I mean, this partnership is not about cost synergies. This partnership is about acceleration and expansion, and we're very, very excited for the long runway ahead. You know, your second question, I think, was with respect to Albertsons. It's been a fantastic partnership with Albertsons. You're right. We've now launched, you know, across their entire footprint, over 2,000 stores. We continue actually to see other partners added into this category. In fact, in the Q3 , we announced over 40,000 non-restaurant stores now, including recent additions of Total Wine & More, Weis Markets and Cardenas Markets in the grocery category, if that's what you're focused on, and also Bed Bath & Beyond.
Even beyond food and liquor, as we discussed, I mean, there are four big areas of work right now at DoorDash. We're building the number one food app. We are getting into new categories such as convenience and grocery. I mean, those are relatively new categories. I know we're the leading platform in the U.S. in convenience delivery, but we have a long way to go there. We're continuing to invest in services to help merchants build their own digital business with products like DoorDash Drive and Storefront. Obviously, we're making a big announcement today on our international business.
Again, you know, the theme even in both of your questions is how do we make sure we have single-threaded leadership in order to have both speed and quality of execution across all of these priority areas?
Yep. All right. Thanks, Tony.
Next one on the queue is Bernie McTernan from Needham & Company. Your line is now open.
Great. Thanks for taking the question. Just two for me. Tony, as you think about the next, you know, 12-24 months and isolating the US, what do you see as the greater near-term opportunity for either increasing the frequency of usage from the base, and as a result, driving more DashPass members, or just continue to expand the total number of customers on the platform? And then just to follow up on DashPass, the 9 million customers, certainly more than we were expecting, and it's been a while since you provided, I think it was last year you provided the 5 million. Can you talk about the cadence of getting from the 5 million to the 9 million?
Yeah. I'll take the first one, and maybe I'll let Prabir on to follow on the second one. On the first one, you know, with respect to just the opportunity, in the U.S., I mean, we're still pretty early. I know that obviously tailwind was a big accelerator into the business. In fact, you've seen a lot of the resilience of that consumer behavior stay, even though in-store dining has returned to effectively all-time highs, according to the latest Census Bureau stat that I saw in Q3. There's just a lot of work still to do in the restaurants category alone.
Yes, we're seeing consumer engagement higher than pre-COVID levels, but as you know, Prabir mentioned, there are a lot of customers, I mean, that have never used DoorDash, and certainly customers that have used DoorDash, there's a lot of them that are not a part of DashPass. That's certainly an opportunity. Another big opportunity I would cite is really our work into other categories. You know, we are you know, quickly marching into these other categories. In the Q1 , we announced single-digit percentages of our monthly active users having shopped in a non-restaurant category. That number is now up to 12% in the Q3 . But again, you know, these categories of convenience or grocery or alcohol, they're very young.
We think there's a massive runway ahead and certainly a lot of work to do in order to invent to bring these categories online.
Bernie, on your question of cadence, I'm not sure exactly what you're looking for with the question. You know, the speed at which we've added DashPass subs and whether it was all front-loaded into the pandemic? You know, let me put it this way. We've had quarter and quarter growth in the DashPass membership program every single quarter since we launched the program.
Understood. Thank you.
Next one on the queue is Jason Helfstein from Oppenheimer & Co. Your line is now open.
Jason, you there? Let's go on to Brad, or the next question, and then we'll come back if you hop back on.
All right. For the next question, we do have Brad Erickson from RBC Capital Markets. Your line is now open.
Thanks. Just a couple, I guess. One, you know, how should we think about the brands going forward here? Do you go with multiple brands across the markets they're kind of in, or does DoorDash maybe eventually take over in certain countries? Then second, when you look at the priorities here, once the deal does close, is it really to just focus on the existing countries where both are operating or might you also look to expand into new countries with either of the brands? Thanks.
Yeah, I'll take that one. Hey, Brad, I guess crawl, walk, run, like I say a lot internally, and first we have to wait for the deal to close, which we expect to happen in the H1 of 2022. The second point around, I think your question was around brands. These are hyper-local businesses. At the same time, while they share the kind of global commonality that people, regardless of where they live, eat three times a day and shop in this category over 100 times a month and are always seeking more and more convenience, brands tend to be hyper-local.
We're gonna optimize for how do we serve customers, merchants, and couriers in the best possible way in their hyper-local area. In fact, nothing is gonna change in terms of the quality of service, certainly day one, we only expect that to increase over time. With respect, you know, I think to the second part of your question around the existing footprint versus adding footprint, we have a lot of work on our plate. I mean, there's 700 million people that post-deal close we're gonna have to continuously delight.
While we have the benefit and the privilege of living in a high-frequency category, we also recognize that it's an execution-oriented business, where you have to earn every single order and every next order before we can earn the privilege of serving our customers the next time. Not much more to say than that right now, besides super excited about the announcement today with a great team that shares our vision as well as the way we operate, and we have a lot of work ahead of us.
That's great. Thanks.
Next one on the queue is Steven Fox from Fox Advisors . Your line is now open.
Hi, good afternoon. Two questions, if I could. Just on the acquisition, it sounds like, there's areas where you both have different kinds of efficiency improvements versus the other. I was wondering how you envision sort of getting best practices out of the two platforms. Secondly, can you just talk a little bit about the ads growth? I understand you said in the letter you're reinvesting profits from ads, but can you give us a sense for how it's growing and how successful it's been in the last quarter? Thank you.
Sure. I'll take it first, and I'll let Prabir follow up on the ads question. You know, with respect to the first question on efficiency, there are no silver bullets in this business. That's what I've learned. I mean, there's literally efficiency everywhere from the consumer shopping experience itself to merchant operations, to customer support, to driver efficiency, which I think sometimes you know gets quite a lot of attention. But there is literally a systemic equation in which you have to look at every component part, break it down into its inputs, and from first principles you know build the best possible combination of selection, quality, price, and service for customers. You're absolutely right.
I mean, the Wolt team has done an amazing job with that. The DoorDash team has as well. You know, post deal close, we certainly will, you know, share best practices, but there are no silver bullets here. It's an execution-oriented business where you really have to understand how the inputs translate into the outcomes, and you have to work every single variable.
Hi, Stephen. On the question about ads and so on, I mean, we're not disclosing ad revenue at this point. What I will say is we're being careful about how we build it. It's really a merchant service, and it's not an EBITDA play. What I mean by that is we're taking our time to ensure that the ROAS remains strong for advertisers while ensuring that the customer experience remains neutral or ideally it's additive to the customer experience. As you pointed out, you know, as we make more progress, those profit dollars will get reinvested back into growth initiatives, which is why I made the point that it's not an EBITDA play from our perspective.
Great. That's all very helpful. Thank you.
Next one on the line is James Lee from Mizuho. Your line is now open.
Great. Thanks for taking my questions. I was hoping to get an update on DashMart and, you know, what are the key learnings that you guys are seeing so far, and what do you need to see for this business to expand? Should we think about this business as a complementary business, or can it scale to a point into a main product? Thanks.
Thanks for the question, James. I mean, the way I view it is, our convenience business consists of 1P and 3P offerings. Frankly, from a customer's perspective, all they care about is that they get the selection that they need at the right quality and at affordable prices. To us, you know, it's a hybrid strategy that involves both 1P and 3P partnerships in order to ensure that the selection's available at the best quality and price.
On the latter part of your question, you know, at the end of the day, it's a form of selection just like anything else, and it allows us, because it's first party, to include not just food, not just grocery, but potentially AirPods or other things that the customer wants and demands. You know, it's a core component of the strategy. We're investing in it, which is part of, you know, the second priority I mentioned earlier in the conversation. You can expect more updates as we make progress, but nothing we're prepared to disclose today.
Thank you.
Right. Next one on the queue is Jason Helfstein from Oppenheimer & Co. Your line is now open.
Thanks for letting me back in again, multitasking. I saw you guys just filed the prospectus, but maybe I'll ask because maybe it's in there. How did you think about valuation there? I don't know if there's you know something you want to share as far as like trailing twelve-month revenue or gross profits or just any thoughts how you thought about kind of valuation. In the Q1 , you mentioned 7% of the business was from non-restaurant orders. Just any update there? Thanks.
Okay. Next one on the queue is Brian Fitzgerald from Wells Fargo. Your line is now open.
Sorry, can we-
Thanks, guys.
Answer Jason's question?
Yeah, go ahead.
Okay. Can I answer Jason's question real quick? Great. So we didn't disclose the order mix from new verticals, but what we did say is that the customers or MAUs that ordered from categories outside of restaurants grew 12% in September, and this number was single digits back in Q1. That's the second question you asked. On the question of valuation, we aren't disclosing anything other than the current run rate GMV from Wolt. Frankly, as we thought about the valuation, we looked at the long-term profit potential of the business is given the retention dynamics we're seeing in the unit economics in various other markets as well as the runway.
I mean, Wolt currently has 2.5 million MAUs in the countries in which it operates, and these countries have 370+ million people, so there's a lot of runway for growth. You know, I do believe in the team, and I believe if we execute well, we think we'll generate a very attractive return.
All right, Brian Fitzgerald, your line is now open.
Thanks, guys. Maybe a follow-up on both. Can you talk about the level of batching that you've done there historically, if you tracked that, how it has progressed? On DoorDash, wanted to know if we could get an update on the reception and the adoption levels of the more recent 15, 25, 30 commission levels, how that's progressing, if you're seeing people move out of one bucket into another. Thanks.
Yeah, maybe on the question of batching, as I said, look, the companies are operating independently today. We're not gonna provide an update on both batching levels at this time. On the adoption of the rest of pricing tiers, you know, we said last quarter that the majority of our restaurants have chosen either premium or plus. No real update on those metrics, other than to say that the premium mix allowed to form their expectations. If the question was really a unit revenue question, like I said, this is a smaller factor versus all of the other movements given our investments that hit our take rate.
Thanks, Prabir.
Next question comes from Mark Mahaney from ISI. Your line is now open.
Thanks. The presentation describes Finland as having one of the most difficult markets for last mile local logistics. Could you explain why? What's particularly difficult about that market? I ask that because the follow-up question is, when you think about the attractiveness of the European markets, Eastern, Northern European markets, where this acquisition, you know, if it's successful, will take you. Is there something about those markets that's more or less attractive than what you currently face in terms of regulation, you know, income requirements, and there are some for workers and classification of workers, et cetera. Is there something about those markets that makes them more or less attractive? They can still be intrinsically attractive, but less attractive than the current markets that you're in.
Thank you.
I can maybe start. If you look at our type of a business, like, ultimately it's a marriage of efficiency and customer experience. Why is Finland difficult? Like, Nordic countries have the lowest income disparity in the world. It means that our kind of blended hourly cost is gonna be surprisingly close to our average order value. We need to make the model work by way of efficiency. There's not really tipping culture, so you have to survive on relatively low delivery fees and commissions. There's not a very strong pre-existing delivery culture, so you have to basically educate consumers to use delivery. Then, like, cities are not very high density, and they're not very big.
Like, you need to be able to, you know, succeed in environments where order density is not gonna be very high for a very long time, if ever. To top it off, like, we have very harsh winters. It's dark for most of the year and so forth. It's just a difficult place to do what we do. The funny thing for us is that, you know, as we came out of Finland and out of the Nordics, we just realized that every other country we saw was a lot easier for us to do because, like, you know, here, like, you know, you need to get every single ounce of the model to work out a little bit more efficiently to be able to operate.
Yeah. Mark, what I would say or what I'd add to that is I think what the whole team has really proven is, you know, regardless of market, people eat three times a day, and they're always seeking convenience options. You know, what's been really attractive about, frankly, their markets or even, you know, larger markets is just how early the runway is, both in the food category as well as beyond.
Okay. Thanks a lot.
Next question comes from the line of Ralph Schackart from William Blair. Your line is now open.
Good afternoon. Thanks for taking the question. Just on driver supply, just curious what are the trends that you're seeing now that some of the government subsidies are starting to wane. I know in the letter you talked about the average active hour increasing by about 9% or so. Just curious more on the supply, if it's easier to sort of attract and retain drivers in this current environment.
Yeah, I mean, I can start. You know, Dashers supply, I think, has been very healthy, you know, in the second and the Q3 . I think, again, what you see is just, you know, again, over 90% of these Dashers work fewer than 10 hours a week, and the average Dasher is under five hours a week. If you think about just the nature of that work, it truly is very different and, frankly, very complementary to a traditional, you know, job. As a result of which, you know, that's why we saw, you know, over 3 million Dashers in the quarter, that have earned, you know, over $2.8 billion.
Dashers, you know, pay has actually increased by over 30% per active hour. It's been very healthy. This is, again, a business where it's very dynamic. You know, as we head into Q4 with seasonality, we're gonna have to make certain preparations and changes. You know, we saw that also with exogenous influence as well in Q1 with some of the stimulus money coming in and driving up demand. In general, though, because of the nature of the work and how flexible it is, Dashers supply has been relatively healthy.
Okay, great. Thanks, Tony.
Next question comes from the line of Alex Potter from Piper Sandler. Your line is now open.
Great. Thanks very much. I was hoping you could give an update on Drive. I know historically you haven't wanted to disclose specifics there, but maybe just qualitative, you know, how has Drive been going? And then a follow-up question also related to Drive, is there an analogous sort of white label service with Wolt? I know that historically the European markets maybe have been more mom-and-pop, less sort of large franchises. So I'm just curious the extent to which you'd consider a white label offering in Europe as well. Thanks.
Sure. I'll start. On Drive, you're absolutely right. I mean, it, you know. The Drive is a business that we've launched now for, you know, over five years and which really started in 2016. It really started as a service to help restaurants build their own digital business for on-demand delivery. Since, it's really grown into the last mile logistics system for all retailers. I mean, it's. We're privileged to get to work with, you know, businesses really across every category, whether it be grocery or, you know, health and beauty or general merchandise. And we've seen it across the board. So the Drive business has really diversified as well.
We have a long ways to go in building a platform services business in which we not only want to create the largest local commerce marketplace, we also want to build the largest local commerce platform. We have to help these businesses, you know, certainly with logistics, that's one component, but everything from customer acquisition to customer service are things that you're gonna have to do as a business owner in order to build a digital business. We've quite a long ways to go on the platform services roadmap. Drive is a huge part of it. We're excited to bring it to most places.
Okay, great. Thanks.
Again, if you would like to ask a question, please press star one. Next one on the queue is Robby Mollins from Gordon Haskett Research Advisors. The line is now open.
Thank you. Tony, when you look at heavy users that aren't DashPass members, what are some of the reasons those consumers haven't signed up, and what levers can you pull to change that?
Yeah, it's a great question. Again, you know, customers value or are evaluating us across four dimensions, right? The selection of stores, the quality of the delivery experience as measured by speed, timeliness, and accuracy, certainly the affordability of the program, which, you know, you're referencing DashPass and customer support. Those are all of the things that we have to get right to be a valuable enough service where we can earn the privilege of getting a DashPass member. You can see that, you know, we're doing work in all of these areas. There isn't necessarily one thing that, you know, we can do to drive up, you know, membership. It's really working on all of the inputs.
I mean, a big part of selection in addition to adding more and more restaurants and different ways of interacting with those restaurants, you know, we're not only the leading platform for delivery in the U.S., but also the leading platform for pickup, for example, in the U.S., is other categories. You know, as mentioned both in our in our shareholder letter, you know, the progression from low single digits or single digit percentages in Q1 of our active user base trying a non-restaurant category to now 12% in the Q3 , I mean, that's showing some of that progression. We have a long ways to go there. You know, the quality is something that we're constantly obsessing over, you know, constantly trying to shave the seconds and minutes of inefficiency out of the system.
Constantly trying to improve our accuracy, as well as just making it easier also, you know, for deliveries to be completed on our platform. You know, with respect to service and affordability, we're always trying to deliver more value to consumers, more value to merchants, and more value to Dashers. A lot of work remains to be done. No single silver bullet, but it's really about working the inputs to offer the best combination so that we can earn the privilege of having more members into DashPass.
Great. Thank you very much.
All right. That was our last question. I will now turn the call over back to Andy Hargreaves.
Thank you everybody for joining us, and thank you Tony Xu and Prabir Adarkar. We will talk to you all soon. Have a great evening.
This concludes today's conference call. Thank you for participating. You may now disconnect.