Postmates

Postmates is a food delivery service, founded in 2011, and acquired by Uber in 2020. It offers local delivery of restaurant-prepared meals and other goods. It is headquartered in San Francisco, California.[2]

"Sam Street" redirects here. For the baseball player, see Sam Street (baseball).
Postmates Inc.
TypeSubsidiary
IndustryLogistics
FoundedMay 1, 2011 (2011-05-01)
FounderBastian Lehmann
Sam Street
Sean Plaice
HeadquartersSan Francisco, California, United States
Area served
Select cities in United States
Key people
Bastian Lehman (CEO)
Sean Plaice, Vivek Patel, Kristin Schaefer (Management Team)
Nabeel Hyatt, Brian Singerman, Scott Banister (Board Members)
ProductsMobile app, website
ServicesDelivery (commerce)
RevenueUS$1 billion (2018)
Number of employees
5,341 (2019)[1]
ParentUber
Websitepostmates.com

As of February 2019, Postmates operates in 2,940 U.S. cities.[3] Postmates primarily competes with Grubhub, DoorDash, and its sister service Uber Eats.

The company has been sued for alleged antitrust price manipulation.[4]

History

Postmates was founded in 2011 by Bastian Lehmann, Sean Plaice, and Sam Street.[5]

In December 2014, Postmates opened its application programming interface to merchants to allow small businesses to compete in the business of consumer goods delivery with larger companies such as Amazon.[6][7][8][9]

In November 2017, Postmates launched its service in Mexico City, its first location outside the United States.[10] It ceased operations in Mexico in December 2019, citing a lack of growth and a desire to focus more on the U.S. market.[11] In 2018, Postmates launched its service in 134 new cities in the United States, bringing its total number of cities in the United States up to 550.[12]

On December 13, 2018, Postmates announced the development of an autonomous delivery rover.[13]

Funding and acquisition

In 2011, Postmates raised over US$800,000 through involvement with the Angelpad accelerator.[14][15]

In September 2018, Postmates announced that it had raised US$300 million in additional funding, led by Tiger Global Management.[16] Fortune reported that the deal valued Postmates at US$1.2 billion.[17]

In January 2019, Postmates raised US$100 million in investments from BlackRock together with Spark Capital, Founders Fund, Uncork Capital, and Slow Ventures. The total valuation of the company reached US$1.85 billion.[18] In December 2020, Uber acquired Postmates for US$2.65 billion.[19][20][21]

Criticism

Pay structure

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 decreasing 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 efficiency and its policy of allowing workers to keep all tips without counting them against other compensation.[22]

Allegations of monopolistic behavior

In April 2020, a group of New York residents sued DoorDash, GrubHub, Postmates, and Uber Eats, accusing them of abusing their market power by only listing restaurants on their apps if the restaurant owners signed contracts which include clauses that require prices to be the same for dine-in customers as for customers receiving delivery.[23][24][25][26] The plaintiffs stated 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.[23][24][25][26] 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.[23][24][25][26] The case is filed in the federal U.S. District Court, Southern District of New York as Davitashvili v GrubHub Inc., 20-cv-3000.[27][23][24][25][26] A trial date has not yet been set.[28] In March 2022, U. S. District Judge Lewis A. Kaplan denied the defendants' motion to dismiss.[29]

See also

References
  1. "Postmates Company Profile". Craft. Retrieved December 9, 2019.
  2. "About Postmates". Postmates. Archived from the original on May 26, 2011. Retrieved February 11, 2015.
  3. "Postmates confidentially files for IPO". Reuters. February 7, 2019. Retrieved February 7, 2019.
  4. Stempel, Jonathan (March 31, 2022). "Grubhub, Uber Eats, Postmates must face diners' lawsuit over U.S. restaurant prices". Reuters. Retrieved June 13, 2022.
  5. Belton, Padraig (December 23, 2014). "Location services: How GPS delivery is changing shopping". BBC News. Retrieved February 11, 2015.
  6. Manjoo, Farhad (December 17, 2014). "Amazon Not as Unstoppable as It Might Appear". The New York Times. Retrieved February 11, 2015.
  7. Hahn, Esther (December 11, 2014). "Will Postmates Dominate Same Day Delivery with Its Open API?". sRacked SF. Retrieved February 11, 2015.
  8. "Postmates, Powering On-Demand Logistics". Postmates. Archived from the original on December 12, 2014. Retrieved February 11, 2015.
  9. Lawler, Ryan (December 9, 2014). "Postmates Is Launching An API To Let Third-Party Sellers Offer Local Delivery". TechCrunch. Retrieved February 11, 2015.
  10. Dickey, Megan Rose (November 15, 2017). "Postmates launches in first international city". TechCrunch.
  11. Ore, Diego; Alire, David; Adler, Leslie (December 4, 2019). "So long, Postmates: food delivery service leaves Mexico". El Universal English. Retrieved December 4, 2019.
  12. Hatmaker, Taylor (October 17, 2018). "Postmates launches food delivery in 134 additional US cities". TechCrunch. Retrieved October 18, 2018.
  13. Pardes, Arielle (December 13, 2018). "Postmates'Quest To Build The Delivery Robot Of The Future". Wired. Retrieved December 13, 2018.
  14. Lynley, Matthew (December 7, 2015). "Postmates To Roll Its Way Into London". TechCrunch. Retrieved March 23, 2022.
  15. Loeb, Steven (September 13, 2019). "When Postmates was young: the early years". VatorNews. Retrieved March 23, 2022.
  16. Ha, Anthony (September 18, 2018). "Postmates raises another $300M, reportedly valued at $1.2B". TechCrunch. Archived from the original on August 6, 2020. Retrieved March 31, 2020.
  17. Marinova, Polina (September 18, 2018). "Exclusive: Delivery Startup Postmates Raises $300 Million, Joins Unicorn Club". Fortune. Retrieved March 31, 2020.
  18. Clark, Kate (January 10, 2019). "Postmates lines up another $100M ahead of IPO". TechCrunch. Retrieved January 11, 2019.
  19. Fiegerman, Seth (July 6, 2020). "Uber to buy Postmates for $2.65 billion". CNN. Retrieved July 6, 2020.
  20. Hawkins, Andrew J. (July 6, 2020). "Uber acquires meal delivery service Postmates for $2.65 billion". The Verge. Retrieved July 23, 2020.
  21. Etherington, Darrell (December 1, 2020). "Uber officially completes Postmates acquisition". TechCrunch. Archived from the original on December 16, 2020. Retrieved December 1, 2020.
  22. Dickey, Megan Rose (May 20, 2019). "Postmates workers want minimum delivery guarantees and at least $15 per hour". TechCrunch. Retrieved April 21, 2019.
  23. Allyn, Bobby (May 14, 2020). "Restaurants Are Desperate — But You May Not Be Helping When You Use Delivery Apps". NPR. Archived from the original on May 17, 2020. Retrieved May 20, 2020. Frank points to a clause in the contracts restaurants and the food delivery apps agree to that prohibits owners from charging delivery customers more than people who dine in, even though delivery costs more. "By not forcing those purchasing on apps to bear the whole amount of the fees, instead forcing all menu prices to rise together, in-restaurant diners are effectively subsidizing Grubhub's high rates," said Frank, who argues such an arrangement is anti-competitive and illegal.
  24. Baron, Ethan (April 14, 2020). "DoorDash, Uber Eats, Grubhub and Postmates make restaurant meals cost more: lawsuit - Four firms' rise has 'come at great cost to American society,' suit claims". Mercury News. Archived from the original on April 20, 2020. Retrieved May 19, 2020. Each of the firms uses "monopoly power" to prevent competition, limit consumer choice and force restaurants to agree to illegal contracts that have "the purpose and effect of fixing prices," the suit claimed. ... The four companies give restaurants a "devil's choice" that requires them to keep dine-in prices the same as delivery prices if they want to be on the app-based delivery platforms, the suit claimed. And restaurants must pay commissions to the delivery firms ranging from 13.5% to 40%, the suit alleged. ... Establishments are forced to "calibrate their prices to the more costly meals served through the delivery apps," the suit alleged.
  25. Stempel, Jonathon (April 13, 2020). "Grubhub, DoorDash, Postmates, Uber Eats are sued over restaurant prices amid pandemic". Reuters. Archived from the original on April 17, 2020. Retrieved May 19, 2020. GrubHub, DoorDash, Postmates and Uber Eats were sued on Monday for allegedly exploiting their dominance in restaurant meal deliveries to impose fees that consumers ultimately bear through higher menu prices, including during the coronavirus pandemic. In a proposed class action filed in Manhattan federal court, three consumers said the defendants violated U.S. antitrust law by requiring that restaurants charge delivery customers and dine-in customers the same price, while imposing "exorbitant" fees of 10% to 40% of revenue to process delivery orders. The consumers, all from New York, said this sticks restaurants with a "devil's choice" of charging everyone higher prices as a condition of using the defendants' services.
  26. Dolmetsch, Chris (April 13, 2020). "GrubHub, Doordash Accused in Suit of Pushing Prices Higher". Bloomberg News. Archived from the original on April 19, 2020. Retrieved May 19, 2020. The New York customers, who seek class-action status, say the delivery services charge "exorbitant fees" that range from 13% to 40% of revenue, while the average restaurant's profit ranges from 3% to 9% of revenue, making delivery meals more expensive for eateries. "Restaurants could offer consumers lower prices for direct sales, because direct consumers are more profitable," the plaintiffs said. "This is particularly true of dine-in consumers, who purchase drinks and additional items, tip staff, and generate good will."
  27. Davitashvili v GrubHub Inc., Link from NPR article (2020).
  28. "Court Listener". July 28, 2020. Retrieved July 28, 2020.
  29. "Davitashvili v. Grubhub Inc., 20-cv-3000 (LAK)". S.D.N.Y. March 30, 2022. Retrieved June 24, 2022.
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