DoorDash (DASH) stock jumped about 3% on Thursday after the food delivery company disclosed a new test program with Waymo, Alphabet’s (GOOGL) self-driving car company. Starting this month, DoorDash customers in Phoenix can choose to have their orders delivered by a fully driverless Waymo vehicle.
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Customers will be able to select the autonomous delivery option on the DoorDash app and use the app to unlock the vehicle’s trunk to retrieve their order. As a part of the deal, DashPass members in Los Angeles, San Francisco, and Phoenix can get $10 off one Waymo ride per month through the end of 2025.
At present, the service will include deliveries from DashMart, DoorDash’s own convenience and grocery store. The company plans to add more restaurants and stores later.
Deal Benefits to DoorDash and Waymo
The partnership is part of DoorDash’s broader push into automation, which also includes sidewalk robots such as Dot and collaborations with Serve Robotics (SERV) in other cities.
DoorDash is leaning on robots, drones, and self-driving cars to lower its reliance on human drivers. The key target is to reduce delivery costs and improve efficiency to compete better with its rival, Uber Eats (UBER).
For Waymo, the deal marks another way to generate revenue from its autonomous fleet beyond ride-hailing. The company already has a similar delivery arrangement with Uber Eats and sees logistics as a key growth area.
Also, the deal allows Waymo to use its cars to deliver packages during slow times for passenger rides, reducing “deadhead miles,” when vehicles would otherwise be idle.
Is DASH a Good Stock to Buy Now?
Turning to Wall Street, DoorDash stock has a Strong Buy consensus rating based on 24 Buys and eight Holds assigned over the past three months. Also, the average DASH price target of $306.54 suggests a 9.72% upside potential.
