Ron Josey: Hey, thanks for taking the question. Tony, I wanted to ask a little bit more about just take rates on a year-over-year basis. They continue to expand and roll down a little bit sequentially. Just talk just a little bit more on the progress you’re making to keep and/or drive take rates higher. So progress around wait times, incentive spend, how you see advertising fit in there? Any insights on where take rates might go? And then we are now a quarter into Dash’s new app and layout and heard some of the comments around grocery prior, but any change in behavior that you’ve seen from the new app now that we are a quarter in? Thank you.
Ravi Inukonda: Let me take the first one on take rate and then I’ll let Tony chime in on the second one. Look, I mean, we are not managing the business to a specific margin target, let alone a margin across any line of the P&L. What you’re seeing on the take rate side is, if you actually look at the underlying drivers of the business across the various lines of business, the net revenue margin has actually increased sequentially as well as year-on-year. What you’re seeing on the output is really the mix shift of various lines of business. If you recall the comments that we made earlier, new verticals, our international business is actually growing faster than our restaurant business. And you’re really seeing the mix shift of those two businesses, which are still early in terms of their journey starting to take impact from an overall take rate perspective.
That said, our goal is always how do we find efficiencies across every line of the P&L and using that efficiency to continue to reinvest back in the business to drive growth. And we did that exactly the same in this quarter, right. We found a lot of efficiencies as was a good contributor to the revenue upside that you’re seeing in the business, we use that to continue to drive efficient growth, which gave a result of some of the accelerated growth that you’re seeing in the business.
Tony Xu: And in terms of your second question about consumer behavior, given some of the app changes that we announced earlier this summer. I mean we continue to see, I guess, more confirmatory evidence that consumers really like the changes. And I think it’s usually pretty rare to see this because whenever you make a pretty sizable change like the one that we made to our consumer app, you tend to get a, who moved my cheese reaction. And I think instead, we actually saw behavior that suggested the opposite where customers were naturally shopping across different categories. And I think one of the drivers of this was that we actually made sure that our progress within each vertical was fairly robust in terms of the level of product market fit that we wanted to achieve before we actually redesigned the entire app experience such that we weren’t reorienting consumers to something that we were pushing upon them, but rather it was meeting them where they want it to be given that they were pulling us in terms of the demand that they naturally suggested and showed across each line of business.
So we are seeing, as I mentioned before, customers continuing to cross-shop across different categories quite naturally and those numbers continue to increase. We are seeing many — for many consumers, the first interaction with DoorDash actually tends to be sometimes outside of the restaurant category. And I think these are some of the factors that have contributed to the fact that when you look outside of restaurants and you look at the convenience, grocery, alcohol segments, customers that are adopting eCommerce in these categories for the first time, about half of them are coming to DoorDash first.
Ron Josey: Thank you, Tony.
Operator: Our next question comes from the line of Eric Sheridan with Goldman Sachs. Please go ahead.
Eric Sheridan: Thanks so much for taking the question. Maybe just one on a broader topic. We’ve seen a ruling in New York City on compensation and investors continue to ask a lot about how the Department of Labor might play out. Any updated thoughts on the regulatory environment overall? And how are you thinking about aligning investments against that potential for nuance in the regulatory environment in the quarters ahead? Thanks so much.
Tony Xu: Yes. Hey, Eric, it’s Tony. I’ll start and feel free, Ravi, to chime in. I think in general, we have the same point of view on the regulatory landscape today as we had shockingly even 10 years ago, which is that, by and large, governments, lawmakers, regulators, they actually want to work productively with companies like ourselves to really co-create, I think, what the future of work and future of labor will be. And if you think about it, the reason why tens of millions of Dashers have come to the DoorDash platform over time or millions come to our platform every single month or the fact that the DoorDash Dasher app is actually one of the most downloaded consumer apps on the Apple iTunes store is because they simply don’t earn enough income from the full time jobs that they do have.
90% of our Dashers Dash fewer than 10 hours a week. The average Dasher does 3 to 4 hours a week, over 80% plus of them have full time jobs. And so they’re really seeing DoorDash as a bridge between what income they earn today and the income that they hope to earn to meet the cost of living. And so — and I think that most regulators actually understand this point, but we — our hypothesis 10 years ago and kind of our views updating to this day has always been that there might be a handful of jurisdictions, who probably don’t want to work productively with businesses and support this new paradigm and instead, candidly create policy that’s just bad policy that will achieve unintended consequences that go counter to their goals. And when we think the New York City legislation or proposed legislation is one of those bodies, we see similar activities in Seattle.
But when you, again, count up all of the regulatory discussions, I think it still favors kind of our original hypothesis, which is outside of a handful of jurisdictions. Most governments, lawmakers and regulators want to work productively with companies like DoorDash to do the right thing for Dashers.
Ravi Inukonda: Eric, just to add to what Tony said, really on the New York City, one, we’ve gotten a couple of questions about this as well. That is not live yet. We do expect 2 year back from the judge at any point, just like everybody else. Our goal and philosophy and how do we respond to some of these changes has always been the first and foremost priority is to drive efficiency in every market that we operate in because our goal is to ensure we have sustainable unit economics. To the extent we are not able to meet our goals around unit economics, we do realize there’s going to be increased cost in the system. Like Tony talked about, we don’t think it’s great because that just reduces the transaction activity across the ecosystem, which means lower sales for merchants as well as internal lower earnings for Dashers.
And from the financial impact perspective itself, any impact from New York City ruling in Q4, we’ve included that in our EBITDA guidance that we’ve given. Our goal is to manage the business to be within that range that we’ve talked about.
Eric Sheridan: Great. Thank you for the color.
Operator: Our next question comes from the line of Doug Anmuth with JPMorgan. Please go ahead.
Douglas Anmuth: Thanks for taking the questions. Recognize that product improvement factors are outweighing macro, but we’ve heard a number of companies call out some early 4Q volatility from either macro or geopolitical. Just curious if you can get anything has changed there at all into 4Q? And then, Ravi, can you talk a little bit more about your improvements to GAAP profitability and just how we should think about that path in upcoming quarters? Thanks.
Tony Xu: Sure. I can start on the first question, and Ravi, feel free to chime in and also take the second question. With respect to the macro dynamics, again, I think it’s just really, really hard to size any one of these things. And I think when you sum it all up and as you mentioned, there’s lots of things going on in the world today, with the economy, with other events across the globe. And there’s certainly puts and takes, I think, to each one of these things. And I think that when — it’s not just the fact that we have product improvements that I think that has helped out way and helped execute very efficiently and continue to grow at higher rates even at our increased scale. It’s also the fact that, when you look at every category of spend, food is one that everyone has to spend in.
