I don't understand why DoorDash is valued so highly. IMO food delivery is a bad business

I noticed that DoorDash trades at around **5.2x EV/Sales**, which seems incredibly high to me. Swiggy in India is at roughly **2.5x**, while Meituan in China is only around **0.83x**.

As a Chinese investor, I find this hard to understand because, based on my experience with the Chinese market, **food delivery looks like a terrible business**.

China's food-delivery market has been around for more than a decade. By 2024, Meituan had about 65% market share and appeared to have a dominant position. But in 2025, Alibaba and [JD.com](http://JD.com) launched a new price war. After the battle, Meituan's share reportedly fell to around 50%, with Alibaba at 40% and JD at 10%.

The key lesson for me was that **even the market leader couldn't effectively defend itself against a price war, and new entrants weren't driven out afterward.** The market therefore significantly lowered its valuation of Meituan.

Why is the moat in food delivery so weak?

First, **customers are extremely price-sensitive**. Unlike ride-hailing, where people may pay more to get a car faster, food-delivery customers are generally more willing to wait and care more about price.

Second, **restaurants can easily multi-home**. A restaurant can use Meituan, Alibaba, and JD at the same time. Ride-hailing drivers, however, can only serve one passenger after accepting a trip.

Third, **food delivery has weaker network effects**. Ride-hailing has city-level network effects, while food delivery is much more local. Multiple platforms can therefore coexist in the same city.

In short, **neither customers nor merchants are strongly locked into a single food-delivery platform**, making it relatively easy for a well-funded competitor to disrupt the market with a price war.

And I don't see why DoorDash should be fundamentally different. If Uber or another well-funded competitor launched an aggressive price war, what's stopping DoorDash's revenue and margins from being seriously hit?

**So what am I missing? Is the U.S. market structurally different, or is DoorDash simply being valued too optimistically?**