DoorDash leapfrogged its rivals to command more than half of the U.S. food-delivery market in January, up from one-third a year ago, thanks to a strong footprint in the suburbs that drove large, family-style orders, a wider selection of restaurants and better operational efficiency that helped it win business from consumers.

An open question is whether its suburban footprint will continue to serve as an advantage. Drivers have more ground to cover, but deliveries can be faster because of less traffic and shorter wait times, such as less time spent trying to find parking or taking elevators to restaurants or customers' apartments. Labor is cheaper too.

Another way the companies burn money is by refunding consumers. Sometimes, small product changes can make a big difference.

Uber's Mr. Gore-Coty was struck at how many consumers complained about missing combo meals during the early months of the pandemic. When he dug into the problem, he found that in fact, major parts of the combos generally arrived, but often missed items like a side salad or dessert.

The app didn't allow consumers to say that one of the items within the combo was missing, leaving Uber to refund the cost of the entire meal. Last summer the company began allowing consumers to break down items missing from a combo.

To minimize errors, apps are tweaking the technology they provide restaurants, too. Before the pandemic, the item most commonly missing from Cheesecake Factory Inc. delivery orders was cheesecake itself. Restaurant staff would pack hot food but leave cold cheesecakes to be packed later. That increased the likelihood that staffers would forget about the cheesecake.

DoorDash's solution was to integrate reminders into the restaurant's delivery tablets so orders with cheesecakes displayed notes in big, bold letters. The change reduced missing desserts as staffers were less likely to overlook them when they handed orders to Dashers. DoorDash says cheesecake is no longer its most-forgotten item.

DoorDash used what it learned from the Cheesecake Factory to minimize errors at other restaurants as orders surged. It began placing instructions from customers, such as no cucumbers on a salad, in a larger font above the order so kitchens saw it before preparing meals.

"A lot of it has to do with tech placement -- bold versus red versus other things," said Toby Espinosa, a DoorDash vice president who previously worked with restaurants on the technology. "A small little thing like this can drive a crazy amount of operational output."

Grubhub is developing a customer guarantee for its orders. If a delivery is late, for example, Grubhub will cover the cost and offer customer credits, even if it's the restaurant's fault, Mr. Maloney said. Mr. Maloney said he expects his business to make money once restaurants are operating at full capacity and profitable again, allowing them to spend more on advertising services such as Grubhub.

Seeking new customers and clients

Apps are seeking ways to attract new users without overspending on advertising dollars -- another drag on their bottom lines.

Uber's Mr. Gore-Coty is relying on its ride-sharing app to attract new Eats users. Last month, Uber introduced new features that further entwined its ride app with its delivery business so it could drive up Eats orders as people begin moving around again.

One feature enables passengers to book and pick up meals while en route somewhere in an Uber. The company began pinging passengers requesting trips from airports, asking whether they would like food delivered to their destination through the Eats app.

Some 13% of Uber Eats' new users in the fourth quarter navigated to it from the rides app, making executives confident that the number would accelerate after the latest changes.

Apps are also trying to find ways to convert more users into monthly subscribers. Subscribers pay the apps a fixed monthly fee in exchange for reduced fees on orders. They tend to order more frequently and have bigger basket sizes compared with nonsubscribers.

Both Uber and DoorDash are offering free trial subscriptions, hoping consumers stick around once they buy into the convenience. Deutsche Bank estimated in January that if DoorDash doubled its monthly subscribers this year, it would post yearly growth, even if order sizes and frequency fell to pre-Covid levels.

DoorDash's shares are up nearly 50% from its IPO listing price in December. Uber's shares crashed in mid-March of last year, when widespread lockdowns crushed its core ride-sharing business, but have more than doubled since then. Grubhub's stock lept after the Just Eat acquisition announcement last year and continued to grow last year, but has cooled since.

One strategy that is helping Uber and DoorDash drive more profitable deliveries is handling the logistics for businesses beyond restaurants. While the companies struck some partnerships before the pandemic, they doubled down on the offering as many kinds of businesses grew more reliant on delivery during the pandemic. Customers order directly on those businesses' websites, which then turn to apps like Uber and DoorDash to fulfill them. DoorDash now provides delivery services for Walmart Inc., Macy's Inc. and Petco Health and Wellness Co., among others.

These orders are more profitable because apps don't need to refund consumers for errors, nor do they need to spend money on marketing. Clients like Walmart bring big business, meaning drivers typically carry more than one order at the same time, lowering apps' delivery cost.

Deutsche Bank's Mr. Walmsley estimates that DoorDash makes a profit of $2 on such a delivery, as opposed to the 90 cents it made on the average food order in the middle of last year.

In such setting, even minor gains in efficiency can mean the difference between losing and making money: "It's a game of seconds and inches," Mr. Walmsley said.

Write to Preetika Rana at preetika.rana@wsj.com and Heather Haddon at heather.haddon@wsj.com

(END) Dow Jones Newswires

05-28-21 0544ET