“If you did a bad job with the delivery, all the other benefits are not that attractive,” he said. “The core value proposition is: Did you have a great experience across selection, quality and affordability using the underlying product? Are you using us for restaurants and other categories? That is what is going to differentiate us.”

DoorDash Inc. Chief Executive Officer Tony Xu has spent the past 11 years building the company that now owns more than two-thirds of the food delivery market in the US, far exceeding Uber Eats (26%) and Grubhub (6%). The app also has a loyal user base, with more than half of DoorDash users owning a DashPass subscription, according to YipitData. More importantly, for investors, the company finally became profitable from its operations in the third quarter this year.

But Xu says building out the product is only 80% of the work to keep the company successful. The rest will come from external partnerships, a strategy that his gig economy peers, including Uber Technologies Inc., the biggest company in the industry, have also increasingly leaned on as they seek new avenues of growth.

The latest effort to boost paid subscriptions is DoorDash’s partnership with Lyft Inc. announced last month. The tie-up is an example of two brands tapping into each other’s customer base to boost engagement without having to merge or make an acquisition. Uber has a restaurant-delivery partnership with Instacart, while Amazon.com Inc’s Prime membership offers a Grubhub subscription perk.

After spending about a decade offering habit-forming services —whether it’s hopping into a stranger’s car instead of hailing a taxi, or opening a door to someone who picked up a restaurant meal and a bottle of wine from the deli down the block — these companies now have a clearer understanding of the competitive landscape. Even as diners returned to restaurants in the post-pandemic era, take-out has become such an ingrained habit that companies know getting customers into a subscription will mean more dollars and time spent on their apps.

So now it’s about finding partners strategically to build a larger system and lock in a more diverse pool of customers. Lyft CEO David Risher had earlier this year rejected the idea of his company offering food delivery on its own because that would keep people at home and exacerbate the loneliness epidemic. But he sees value in joining with the largest food delivery app because it gives millions of DoorDash members “a reason to prefer Lyft” for their rides and provides Lyft a way to compete better with Uber, which offers rideshare and delivery.

For DoorDash, which launched its membership in 2018, three years earlier than Uber, the deal offers customers Lyft discounts in addition to the existing benefit of free access to the ad-tier version of the Max streaming service. DoorDash is also getting new customers through an expanded partnership that offers certain Chase card holders a free subscription and discounted orders. These external perks have helped it maintain a lead on user penetration over the Uber One subscription. (As of September, 42% of Uber Eats users were subscribers, per YipitData. That percentage is lower if all users including rideshare customers are counted.)

Keeping subscribers isn’t easy, however. According to Bloomberg Second Measure data, only 35% of annual DashPass subscribers who made their first membership purchase in September 2023 were retained after a year. Annual subscriptions to Instacart+ show similar numbers with a 32% retention rate. (These figures do not include free trials and free subscriptions through credit card or other partnerships.) The real challenge will be finding creative ways to retain paying users, or at least keep them in the ecosystem so it’s not as costly to acquire them again.

DoorDash Chief Financial Officer Ravi Inukonda said the data doesn’t reflect how membership really works. The company has increased the flexibility it gives to accommodate consumers’ lifestyles with monthly, annual and student plans. “If you’re traveling with young kids, or you’re traveling in the summer and you want to put the program on hold, that’s completely OK with us,” he said.

These people who churn off the membership program are not leaving DoorDash, Inukonda said. And the company is confident in earning their membership back through offering more benefits in the future, as well as through the core product delivery service, which includes not just restaurant takeout, but also alcohol, grocery, makeup and even mattress deliveries.

“If you did a bad job with the delivery, all the other benefits are not that attractive,” he said. “The core value proposition is: Did you have a great experience across selection, quality and affordability using the underlying product? Are you using us for restaurants and other categories? That is what is going to differentiate us.”

After all, partners won’t matter if the main product isn’t drawing members. Case in point: Grubhub hasn’t been able to reverse a streak of losses in orders and users, ceding market share to DoorDash and Uber even as it has been offering free food delivery to hundreds of millions of Amazon Prime members since 2022. That is one of the reasons parent company Just Eat Takeaway.com NV announced this week it will be selling Grubhub to startup Wonder Group for $650 million, a steep discount to the $7.3 billion price tag at its peak during the pandemic.—Natalie Lung

Jeremy Barnes Chief Executive Officer of Future Energy Source Company Limited (“FESCO” or the “Company”) has released the Company’s unaudited first (1st) quarter financial statements as at June 30, 2024 for the financial year April 1, 2024 to March 31, 2025.

Executive Summary

We are pleased to report that the Company has achieved its best quarter to date as it relates to gross profit (J$412.3 million, up 38.71% or J$115.1 million), operating profit (EBIT) (J$185.8 million, up 16.28 % from J$159.8 million), and earnings before interest, taxes, depreciation and amortization (EBITDA) (J$250.2 million up 26.56% or J$52.5 million). Net profit for the quarter was also strong totalling $148.4 million up 28.19% or J$32.6 million.

For the quarter, the Company was able to achieve its main targets which were to:
1. Increase brand awareness for FESGAS™ as well as maintain and enhance its market share (measured in litres of LPG) for both domestic and commercial usage;
2. Increase its company-operated service station footprint (FESCO Hayes) and increase overall fuel sales measured in litres;
3. Increase profitability, specifically as it relates to operating profit (EBIT), operating cash flow (EBITDA) and net profit;
4. Acquire additional service station and LPG assets to enhance its retail and commercial distribution going forward; and
5. Establish additional filling plants to further enhance its LPG distribution.

The Company’s quarterly performance reflects an increase in fuel sales in litres. The network of FESCO branded service stations remains twenty-one (21) island-wide; an addition of a DOCO service station, FESCO Hayes, and a separation from the network of a DODO service station in Whithorn, Westmoreland.

Financial Highlights:

For the quarter ended June 30, 2024, FESCO recorded Turnover/Revenues of J$7,780.0 million which reflects an 18.56% or J$1,217.8 million year over year increase. Several factors affect revenue/turnover with the supply price of fuel being a major component.

For the quarter, fuel prices increased slightly for gasoline (87 Octane: J$6.08 and 90 Octane J$9.12)1 and remained relatively flat for both ADO and ULSD (ADO +J$1.06 and USLD -J$0.91). FESCO has no control over the supply price of fuel and, instead, focuses more on quantity of fuel sold and gross profit.

Accordingly, FESCO’s year over year growth in Turnover reflects significant increase in litres of fuel sold (all fuels including LPG).

Operating Expenses of J$226.5 million, for the quarter, is up J$89.9 million versus last year or 65.83%.
This expansion of expenses directly reflects the expanded:

1. Operating locations including the additions of: FESCO Kitson Town, FESCO Hayes, FESGAS Bernard Lodge and FESGAS Naggo Head;
2. Asset base which includes increased operating LPG and service station assets;
3. Operational scope (which now includes increased retailing and manufacturing);
4. Early stage new business costs including but not limited to:
a. business acquisition;
b. property acquisition and development costs; and
c. business integration costs.

For the quarter, staff costs of J$75.0 million, up J$25.7 million from J$49.3 million last year, reflects the expansion of our staff complement and is consistent and reflective of our expanded operations (company operated locations and range of operations).

These costs are relatively efficient as they are only 33.1% of overall expenditure (2024: 33.1% vs 2023: 36.1%) and only 18.2% of gross profit (2024: 18.2% vs 2023: 16.6%).

Security expense totalling J$10.3 million versus $6.6 million last year reflects additional operating locations and increased security rates. Motor vehicle expenses of J$11.1 million versus J$1.5 million last year reflects a fleet size growth to facilitate, in the main, haulage and distribution of LPG.

Depreciation expense of J$56.8 million reflects Plant Property and Equipment (PPE) expansion of both LPG and service station assets. The Company’s LPG operation is capital intensive as it relates to its fixed asset requirements to establish and fulfil the business’ services and operation. Accordingly, depreciation and interest expense will in the forming period outweigh its medium and long term “weight” relative to gross profit exemplified by depreciation for the quarter totalling J$56.8 million versus J$37.0 million last year.

It is important to note that operating expenses relative to gross profit is trending downwards. For the quarter, operating expenses were 54.9% of gross profits compared to 57.0% of the entire Audited financial year ended March 2024, and Operating expenses excluding depreciation was 41.2% of gross profits compared to 44.5% for the entire Audited year ended March 2024.

In summary, staff costs, bank charges, advertising, and asset-based expenses including but not limited to depreciation, insurance, and security continue to be FESCO’s main expense items. FESCO’s operations continue to be efficient, represented by our total operating expenses being approximately 54.9% of gross profit. Notably, for this stage of LPG business development, the Company’s total operating expenses excluding depreciation is just 41.2% of gross profits. The Company’s expense profile is changing and will reflect its expanded and evolving range of operations. The Company’s expenditure and revenue targets are in line with its internal forecast and mix of established and early stage business expenses.

A look ahead

FESCO continues to monitor economic factors such as moderating inflationary forces, indicative expectations that interest rates will reduce in the short to medium term, and the near full employment in many sectors of the economy.

The Company is also watchful of hurricane Beryl recovery efforts in southern and western parishes and the resilient and expanding tourism sector, among other factors affecting consumer spending.

The Company is navigating industry-related margin contractionary forces and consolidation within the industry.

The Company is selective in its allocation of investment capital but remains mindful of opportunities for growth and further investment. Internal or self-funding via profit generation, profit retention, at this time, has proven to be the most efficient and cost-effective source of capital to fund growth.

The Company has commenced construction of its service station on Spanish Town Road, FESCO Oval. FESCO Oval will be a company-owned company-operated service station (COCO) for increase retail presence within the Kingston and St Andrew (KSA) region. Completion will take approximately fifteen (15) months and
we anticipate opening in the month of September 2025.

The development will represent the Company’s commitment to community and showcase the creativity and mindfulness of the Company’s Jamaican project team, which we believe, generally, exemplifies our tagline and motto, “Proudly Jamaican”.

Finally, the Company will continue to make investments in real assets and equipment to support expanding its service station businesses and network, its industrial client base, and LPG business.

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The Postal Corporation of Jamaica (PCOJ/PostCorp) is, this year, looking to continue work to further modernise and build out client service delivery.

The targeted engagements include expanding facilities from which Klick ‘n’ Ship, Zip Mail and FastTrack international courier services can be accessed.

Details of this and other programmed engagements are outlined in the Jamaica Public Bodies Estimates of Revenue and Expenditure for the Year ending March 2025.

Klick ‘n’ Ship, which is currently being accessed at 81 locations, will be deployed to another 12.

FastTrack International’s service, which is currently offered from 65 locations, is being targeted for expansion to an additional 12.

Zip Mail, which provides next-day courier service in 115 locations islandwide, will see reduced processing times with planned increase in the use of technology.

PostCorp is also looking to commence bill payment services at selected locations, and provide reliable internet service to 30 additional post offices islandwide.

Internet service is currently available at more than 115 of the 237 post offices islandwide.

PostCorp continues to maintain a strong relationship with the

Universal Service Fund (USF), which ensures that major locations have network redundancy.

Meanwhile, PCOJ is in the process of reviewing proposals for the Counter Automated Software Project’s implementation, which commenced in 2016 and remains a priority for the entity.

Its implementation will bolster the introduction of modern technology, which is anticipated to replace inefficient and manual processes throughout the postal network.

The Corporation anticipates that a submission will be made to Cabinet for approval of the preferred bidder during fiscal year 2024/25.

The Postal Corporation of Jamaica was incorporated in 1995 to effect the postal system’s reform and modernisation. PostCorp commenced operations in 2000.

By: Britney Stevens, JIS