• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

As Big Tech showers employees with perks to win the talent war, Nvidia built a nearly $5 trillion company by making people pay for their own lunch

2

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

3

Current price of oil as of July 1, 2026

1

As Big Tech showers employees with perks to win the talent war, Nvidia built a nearly $5 trillion company by making people pay for their own lunch

2

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

3

Current price of oil as of July 1, 2026
Techon-demand service

Why San Francisco is the wrong city to test the next Uber

By
Kia Kokalitcheva
Kia Kokalitcheva
Down Arrow Button Icon
By
Kia Kokalitcheva
Kia Kokalitcheva
Down Arrow Button Icon
May 22, 2015, 12:00 PM ET
TechCrunch Disrupt SF 2014 - Day 3
SAN FRANCISCO, CA - SEPTEMBER 10: DoorDash Co-Founder and CEO Tony Xu speaks onstage at TechCrunch Disrupt at Pier 48 on September 10, 2014 in San Francisco, California. (Photo by Steve Jennings/Getty Images for TechCrunch)Photograph by Steve Jennings — Getty Images
Add Fortune on Google for similar content.

I often roll my eyes when a new start-up premieres in San Francisco that promises to deliver meals, clean homes or shuttle people around town. The city is filled with young wealthy professionals with an aversion to laundry, cooking, and grocery shopping.

That’s exactly why entrepreneurs building these types of services often test them in San Francisco. But one startup took the opposite approach.

“We actually purposely avoided San Francisco,” Tony Xu, CEO of food delivery service Doordash, said on-stage at the On-demand Conference in San Francisco earlier this week.

Originally from the Midwest, Xu wanted to build a service his friends from back home would want to use too. In other words, he didn’t want to create a company only for young San Franciscans or New Yorkers.

Legions of so-called “on-demand” services, from ride-hailing giant Uber to the young shipping service Shyp, have used San Francisco as their test bed. The decision is understandable, of course. The city is small enough for startups to tackle and is filled with early adopters with lots of cash. San Francisco also happens to be home to many of those on-demand companies, and it is therefore a convenient first step.

But because of the techie influence, San Francisco is an anomaly in its appetite for superfluous apps. Any company using the city to gauge interest in its service is taking a multi-million dollar risk. This is also why companies from fast food chains to Hollywood studios test their products and hold focus groups anywhere but San Francisco. Instead, they opt for more “average” markets like Columbus, Ohio, and Sacramento, Calif.

After conquering the areas around his alma mater, Stanford University in Palo Alto, Calif., Xu and his team ultimately settled on San Jose, Calif. as their first market, he said. Located an hour south of San Francisco, San Jose is sprawling, filled with suburban neighborhoods and diverse demographics, according to Xu.

“Right away when you have a large territory like San Jose, your engineering has to change,” Xu said.

Granted, San Jose is hardly middle America. It too is a tech capital that is home to eBay, Cisco Systems, and Samsung’s North American headquarters. The real median household income in 2013 was $91,533, putting it in the upper echelon in terms of wealth. Residents seem to be as plugged in there as they are in San Francisco, albeit, with more children, swimming pools and bigger backyards.

In any case, the San Jose area provides a geography that’s more akin to the suburban sprawl found across the country. A city’s geography has a huge effect not only on the routing, but also on scheduling driving shifts to best match demand, both critical to businesses like Doordash.

Xu added that customers outside San Francisco’s bubble have priorities other than the usual food and product delivery apps. Companies really need to understand what is important to them so it can tailor its marketing and product design.

“In San Jose, a lot of our earliest users were young families,” he said. “The message may be less about the technology but the real world benefits that it provides.”

For example, Xu found that reliability was especially important to the many working mothers who use Doordash in San Jose because their busy schedules leave little room for “plan B.”

But Gagan Biyani, CEO of Sprig, a meal delivery service, disagreed. Middle America is just as interested in home delivery services and ordering a good-quality product for delivery as people living in San Francisco, he argued.

“I think it’s a bit condescending to say that other people have different values,” Biyami said. “I think the reality is that there are some things that are universal.”

Sprig, a two year-old company that operates in San Francisco, nearby Palo Alto, and Chicago, delivers meals to its customers within 15 minutes, according to the company’s website. The company cooks its own meals, unlike delivery services like Postmates, which merely shuttle restaurant take-out meals to customers.

While Biyani conceded that companies have to adjust their businesses depending on the location, he believes that most people want a better option when it comes to basic activities like eating.

“We’re all sick of eating shitty food,” he said.

For more about Uber, watch this Fortune video:

About the Author
By Kia Kokalitcheva
See full bioRight Arrow Button Icon
Add Fortune on Google for similar content.

Latest in Tech

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in Tech

Why build AI data centers in a cornfield when Saudi Arabia has cheap oil and cheaper power?
Big TechMeta
Why build AI data centers in a cornfield when Saudi Arabia has cheap oil and cheaper power?
By Catherina GioinoJuly 2, 2026
2 hours ago
Scott Bessent, US treasury secretary, during an Economic Club of New York (ECNY) event in New York, US, on Tuesday, June 23, 2026.
Economynational debt
Elon Musk says AI is the only way to fix the $40 trillion U.S. debt crisis—but a new study says even the most optimistic scenario won’t fill the hole
By Eleanor PringleJuly 2, 2026
4 hours ago
A test of Anduril's Altius drone.
NewslettersTerm Sheet
Defense tech could be entering its awkward teenage years. Is the boom a bubble?
By Allie GarfinkleJuly 2, 2026
4 hours ago
em
Commentary250 Years of Innovation
America’s 250th birthday has Elon Musk and a record IPO. Its 15th had Alexander Hamilton — and a stock market bubble
By Owen LamontJuly 2, 2026
5 hours ago
Meta CEO Mark Zuckerberg (left) and CTO Andrew "Boz" Bosworth in Menlo Park, California, on Wednesday, Sept. 17, 2025. (Photo: David Paul Morris/Bloomberg/Getty Images)
NewslettersFortune Tech
Meta prepares to join the cloud infrastructure fray
By Andrew NuscaJuly 2, 2026
5 hours ago
Sam Altman seeks new world order for AI as OpenAI slowly loses ground to Google and Anthropic 
AIMarkets
Sam Altman seeks new world order for AI as OpenAI slowly loses ground to Google and Anthropic 
By Jim EdwardsJuly 2, 2026
6 hours ago

Most Popular

As Big Tech showers employees with perks to win the talent war, Nvidia built a nearly $5 trillion company by making people pay for their own lunch
Big Tech
As Big Tech showers employees with perks to win the talent war, Nvidia built a nearly $5 trillion company by making people pay for their own lunch
By Marco Quiroz-GutierrezJuly 1, 2026
1 day ago
MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year
Success
MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year
By Sydney LakeJune 25, 2026
7 days ago
Current price of oil as of July 1, 2026
Personal Finance
Current price of oil as of July 1, 2026
By Joseph HostetlerJuly 1, 2026
1 day ago
Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster
Success
Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster
By Preston ForeJune 27, 2026
5 days ago
The Supreme Court's birthright citizenship ruling hands the U.S. economy a $7.7 trillion win
Newsletters
The Supreme Court's birthright citizenship ruling hands the U.S. economy a $7.7 trillion win
By Diane BradyJuly 1, 2026
1 day ago
Trump got a $78K pension from the Screen Actors Guild in 2025 because he appeared in Home Alone 2 in 1992
Politics
Trump got a $78K pension from the Screen Actors Guild in 2025 because he appeared in Home Alone 2 in 1992
By Sasha RogelbergJuly 1, 2026
22 hours ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.