In a sea of food delivery apps, Postmates stands out not because of its business or employment model, but because of its tentativeness towards food delivery. Postmates CEO Bastian Lehmann has repeatedly said he runs an on-demand logistics platform, and “food to Postmates is what books were to Amazon”.
At launch, Postmates marketed itself as the new Craigslist. Buyers in San Francisco could have anything, from flowers to refrigerators, delivered in two to four hours. It was primarily targeted at small businesses, and took a few years to pivot to consumers.
For the first two years, Postmates survived payment to payment, without the yearly billion dollar funding rounds we see today. In 2013, the Founder’s Fund invested $5 million, which legitimized the industry and caused a wave of further investments. A few months later, DoorDash and Instacart would both land large series A rounds.
Food delivery shouldn’t have worked on Postmates. It had a flat $9.99 delivery fee, while its rivals Grubhub and DoorDash offered delivery for $3-6, depending on the area. However, in California people were more than willing to pay the delivery charge to have their favourites delivered.
In 2015, Postmates finally lowered its delivery fee to $3.99 for preferred merchants, who would be featured prominently on the platform. It also was the first to launch a pro service, Unlimited, which would waiver the delivery charge for all orders over $30 for $9.99 a month.
Due to its start as more of a logistics platform, Postmates has been more well received by drivers than DoorDash and Uber Eats. Drivers have said Postmates pays more per hour, although others have said there is less work to be had compared to rival platforms.
Postmates has courted some controversy for its ‘deliver everything’ mantra, often going against the wishes of restaurants and businesses. In 2015, several business owners complained about Postmates taking delivery orders without receiving permission.
As more on-demand delivery services launched, Postmates saw its market share tumble, as Uber Eats and DoorDash supplanted Grubhub. It continued to see growth in some cities, like Los Angeles and Charlotte, NC, but was far behind the leaders in total US market share.
Two years later, Postmates sided with Uber, when it was acquired for $2.65 billion.
Postmates is still available on the app store and, for the time being, will remain a separate entity. Whether Uber folds it into Eats, or launches a new app focused on non-food items, remains to be seen.
|Launch date||1 May 2011|
|HQ||San Francisco, California|
|People||Bastian Lehman (CEO), Sean Plaice (CTO), Dara Khosrowshahi (Uber CEO)|
Postmates Total Raised
Note: Uber paid $2.65 billion to acquire Postmates in 2020.
Postmates Deliveries Per Month
Postmates Market Share
Note: Percentages may be inflated due to Postmates also delivering non-food goods.
Postmates US competitors: Food Delivery Market Share
Postmates other stats:
- Postmates has approximately 10 million monthly active users (NYT)
- It surpassed $1 billion in total sales volume in 2018 (CNBC)
- Postmates completes five million deliveries every month (TechCrunch)
- Postmates has 500,000 merchants on its platform, more than current market leader DoorDash
- 17 percent of Postmates customers subscribe to its Unlimited service (Second Measure)
- Postmates is responsible for eight percent of all food deliveries in the US (Second Measure), making it the fourth largest supplier in the country
- Uber Eats acquired Postmates for $2.65 billion in July 2020 (The Verge). DoorDash had discussed merging with Postmates in 2018 (Re/Code) to fend off Uber Eats
- Combined, Uber Eats and Postmates control 36 percent of the US food delivery market, which makes them the second largest distributor
- Postmates is available in 4,200 cities in the US. It ended operations in Mexico in 2019 (Reuters)