Postmates is an American company that offers local delivery of restaurant-prepared meals and other goods., Postmates operates in 2,940 U.S. cities. The service relies on mobile phone applications and their Global Positioning System capabilities to match inventories and consumer demand. Launched in 2011, Postmates is one of many on-demand delivery companies in the United States providing delivery from restaurants and stores that previously did not offer goods delivery. Postmates is an example of an on-demand company. Postmates co-founder Bastian Lehmann calls the company "anti-Amazon". On July 6, 2020, Uber announced it would buy Postmates for $2.65 billion dollars.
History
Postmates was founded in 2011 by Bastian Lehmann, Sean Plaice, and Sam Street and is headquartered in San Francisco, California. Postmates was part of Angelpad's first accelerator cohort.. Postmates early investors include from Uncork Capital, Russell Cook, Naval Ravikant, Matrix Partners, David Wu, AngelPad, Thomas Korte, Carine Magescas and Andy McLoughlin.. In December 2014, Postmates opened its application programming interface to merchants to allow small businesses to compete for delivery of consumer goods with larger companies such as Amazon. In the same month, the company announced that it had completed its millionth delivery and that it had over 6,000 drivers in its network. In June 2015, Postmates announced that it had surpassed 2.5 million deliveries across 28 markets and expanded its fleet to 13,000 couriers. In September 2015, Postmates updated the app, which added the ability to track delivery, gift meals to others, and the estimated delivery time. In November 2017, Postmates launched service in Mexico City, its first location outside the United States. It ceased operations in the country in December 2019, citing a lack of growth and desire to focus more on the U.S. market. In 2018, Postmates launched service in 134 new cities in the United States, bringing its total number of cities in the United States up to 550. In September 2018, Postmates announced that it has raised $300 million in additional funding led by Tiger Global Management. Fortune reported that the deal valued Postmates at $1.2 billion. On December 13, 2018, Postmates unveiled Serve, its internally developed autonomous delivery rover. In January 2019, Postmates raised $100 million investment by BlackRock together with Spark Capital, Founders Fund, Uncork Capital, and Slow Ventures. The total valuation of the company reached $1.85 billion. In May 2019, Postmates changed its pay structure for delivery workers, removing a $4-per-job minimum pay guarantee, changing the base rate per job, and changing the per-mile rate in some markets. Working Washington, a labor activism group affiliated with the SEIU labor union, urged couriers to refuse jobs with Postmates. The company defended its modified pay structure, citing improved efficiencies and its policy of allowing workers to keep all tips without counting them against other compensation.
Controversy and Criticism
Allegations of monopolistic behavior
In April 2020, a group of New Yorkers sued DoorDash, GrubHub, Postmates, and Uber Eats, accusing them of using their market power monopolistically by only listing restaurants on their apps if the restaurant owners signed contracts which include clauses that require prices be the same for dine-in customers as for customers receiving delivery. The plaintiffs state that this arrangement increases the cost for dine-in customers, as they are required to subsidize the cost of delivery; and that the apps charge “exorbitant” fees, which range from 13% to 40% of revenue, while the average restaurant’s profit ranges from 3% to 9% of revenue. The lawsuit seeks triple damages, including for overcharges, since April 14, 2016 for dine-in and delivery customers in the United States at restaurants using the defendants’ delivery apps. The case is filed in the federal U.S. District Court, Southern District of New York as Davitashvili v GrubHub Inc., 20-cv-3000. Although a number of preliminary documents in the case have now been filed, a trial date has not yet been set.
