6 ms·

Postmates Raises $80M in Push Toward $1 Deliveries

33 points by bavidar 11y ago

testingonprod 11y ago
Honestly if there is a bubble and if it does burst, I'm putting my money on Postmates as the first company that will go out of business.
- Plough_Jogger 11y ago
  What about Doughbies?
- mahyarm 11y ago
  Why? I find the service useful. It's basically generalized delivery service. Restaurants who don't want to manage delivery drivers can outsource it to postmates. For example I used it to get diet food deliveries from a local 'fitness food' cafe 30m away. It saved me an hour of time. And this place didn't do deliveries.
  - GigabyteCoin 11y ago
    > Restaurants who don't want to manage delivery drivers can outsource it to postmates. I don't see that as a viable option for most restaurants, unless postmastes can absolutely guarantee that a courier will be out delivering their orders within 10 minutes of them being completed by the kitchen and delivered within 30 minutes after pickup. And at that point, if you're basically paying postmates to constantly have a courier on call for your restaurant, why wouldn't you just hire a driver? They mostly make minimum wage and live off of tips, and they pay for their own car, insurance, gas, etc. I knew a delivery driver once, and he was not a happy man.
- dang 11y ago
  This kind of dismissal makes for a bad HN comment. There's nothing substantive here—just peevishness, and an implied desire to see others fail.
  - testingonprod 11y ago
    You're absolutely right, I kinda just posted the first thing that popped in my head. I actually question their business model because I think something like Sprig will be far more specialized to cut costs sustainably than something like a Postmates will ever be able to.
    - dang 11y ago
      We know that it's super easy to do and that there's usually no ill intent behind it. The trouble is that it compounds, and then you get a dismissive culture. For future reference, the specific thought in your second sentence is the kind of thing that makes for a substantive critique instead of a generic dismissal, and if you added a bit more detail about why you think this—something for people to consider and respond to—then you'd have a fine comment. We're certainly not trying to eliminate critique.
nodesocket 11y ago
I can't understand how Postmates is so big. I've tried them twice. Both times the food took over 1.5 hours to be delivered and was cold. Just order pizza or Chinese.
- 7Figures2Commas 11y ago
  > Both times the food took over 1.5 hours to be delivered and was cold. This is a feature, not a bug. > Just order pizza or Chinese. That's so 1999. The hip, ultra-efficient city-dwellers of 2015 have Soylent on tap.
  - mw67 11y ago
    please elaborate on how being so late is a feature please? i don't get it
    - telotortium 11y ago
      /s
pbreit 11y ago
The $1 is a bit misleading as it is apparently relying on tipping to make up the difference. Which strikes me as kinda weak. Getting something now is definitely better than getting it later which is definitely better than getting it tomorrow and on and on. But there are not a lot of things that I really need now or today. And I suspect most will be unwilling to pay for speed very much.
codezero 11y ago
On mobile this is giving me an internal server error, is it just me? :(
- kentt 11y ago
  Same for me.
jbuzbee 11y ago
One commenter on the article claims that prices are jacked up to hide the true delivery cost. Wonder if that's the case?
- gergles 11y ago
  Postmates charges exactly what the retailer charged you plus 9% (it's a transparent markup, not an opaque one like Instacart.)
  - erdle 11y ago
    Could you shed some more light on this? Instacart claims to offer in store prices for my local store. Although I have caught a few issues where they charged double for an avocado or something like that but it seems like more of a data entry error based on the current price of "2 for 1"
    - gergles 11y ago
      Oh, they don't have that feature in my area (yet?) - if I browse Instacart for Trader Joe's, I see "15%+ higher than in-store pricing" and it is generally on the plus side more than the 15% side. (The average markup seems closer to 25%, it is a really really poor deal.) I've never seen the in store pricing option here.
      - frankdenbow 11y ago
        In SF some of the stores (Whole Foods, BiRite, Smart & Final) all are listed with "Prices are same as in store"
    - aviv 11y ago
      IIRC Instacart also makes money from the price difference of products that are listed at their regular price yet are offered on sale at the store when actually bought by an Instacart shopper. That may have changed since their early days.
- DanFeldman 11y ago
jchicity 11y ago
Kozmo.com anybody.....
serve_yay 11y ago
Hmm, I paid $5 for delivery. They had some $2 burrito special but they picked the worst burrito place in my neighborhood and after the delivery charge and a decent tip, it didn't seem like a particularly good deal. They did do a good job of getting lots of napkins and sauces and utensils though. I am not sure about this style of food delivery, it's weird and off putting to me though I can't exactly say why.
- swozey 11y ago
  I use it (eat24 mostly) all the time. I love it. I usually eat dinner alone and it's nice to just be able to order whatever I want while watching Netflix. It's perfect for anxious people like myself.
nathancahill 11y ago
Ha, just finished reading this about delivery startups: https://medium.com/@alexschiff/dear-food-delivery-startup-dcb2f582e295 https://medium.com/@alexschiff/dear-food-delivery-startup-dc...
erdle 11y ago
My startup is bootstrapped and does deliveries. In fact we actually hired people that hated the old/current Postmates model. But basically, it's not an easy business model and it's not one that makes financial sense, no matter what the funding, city, tipping situation is. Deliveries = Time Time = Money If you want someone to have time to make deliveries, you have to pay them enough money to have that time. Until VERY EXPENSIVE robots and cars replace people, deliveries will always be expensive, and relatively dependent on the speed of traffic + production. And even once we have robots, we'll need to charge enough to cover the robots, the guy that repairs the robots and money to invest in the next robot. That probably will be more than an dollar... especially when you factor in energy for the robots.
- Plough_Jogger 11y ago
  I think the long-term hypothesis of many of these companies is that you can hit a critical mass where your logistics can be made significantly more efficient. The current efficiency bottleneck, both in terms of cost and time, results from the fact that deliveries are infrequent and relatively distant. If enough people were ordering in an area, the theory goes, you could efficiently route delivery drivers to minimize the amount of time spent between deliveries and restaurants. Whether this works in practice remains to be seen.
- prawn 11y ago
  I have a feeling that we'll solve self-driving cars to your driveway a long time before we solve getting the package from there to a person/porch/mailbox. I reckon for some time we'll see people sitting in self-driving cars just to take care of the final hand over. Actually, just struck me that what might work is an Amazon Locker on wheels plus an Uber-style app. You track the package drawing near via app (plus alerts) then go outside to grab it from an opening on the van before the vehicle recognises a completed transaction and drives off. You could take a delivery at a park, home, work, anywhere with a road nearby.
  - mahyarm 11y ago
    TBH, I think drone deliveries are possible today technologically, unlike self driving cars, and those can deliver to most porches.
rblatz 11y ago
I've used Postmates a couple of times at work when I've been too busy to actually go out to lunch. I can also see using them in a few other situations. I've been very happy with the service, but I'm not sure the market is as big as people are hoping. But interestingly, I see this as a huge win for people that may be home-bound due to age or injury. Specialty services that cater to this demographic are expensive and not nearly as responsive.

33 points by bavidar 11y ago

Honestly if there is a bubble and if it does burst, I'm putting my money on Postmates as the first company that will go out of business.

Plough_Jogger 11y ago
What about Doughbies?
mahyarm 11y ago
Why? I find the service useful. It's basically generalized delivery service. Restaurants who don't want to manage delivery drivers can outsource it to postmates. For example I used it to get diet food deliveries from a local 'fitness food' cafe 30m away. It saved me an hour of time. And this place didn't do deliveries.
- GigabyteCoin 11y ago
  > Restaurants who don't want to manage delivery drivers can outsource it to postmates. I don't see that as a viable option for most restaurants, unless postmastes can absolutely guarantee that a courier will be out delivering their orders within 10 minutes of them being completed by the kitchen and delivered within 30 minutes after pickup. And at that point, if you're basically paying postmates to constantly have a courier on call for your restaurant, why wouldn't you just hire a driver? They mostly make minimum wage and live off of tips, and they pay for their own car, insurance, gas, etc. I knew a delivery driver once, and he was not a happy man.
dang 11y ago
This kind of dismissal makes for a bad HN comment. There's nothing substantive here—just peevishness, and an implied desire to see others fail.
- testingonprod 11y ago
  You're absolutely right, I kinda just posted the first thing that popped in my head. I actually question their business model because I think something like Sprig will be far more specialized to cut costs sustainably than something like a Postmates will ever be able to.
  - dang 11y ago
    We know that it's super easy to do and that there's usually no ill intent behind it. The trouble is that it compounds, and then you get a dismissive culture. For future reference, the specific thought in your second sentence is the kind of thing that makes for a substantive critique instead of a generic dismissal, and if you added a bit more detail about why you think this—something for people to consider and respond to—then you'd have a fine comment. We're certainly not trying to eliminate critique.

nodesocket 11y ago

I can't understand how Postmates is so big. I've tried them twice. Both times the food took over 1.5 hours to be delivered and was cold. Just order pizza or Chinese.

7Figures2Commas 11y ago
> Both times the food took over 1.5 hours to be delivered and was cold. This is a feature, not a bug. > Just order pizza or Chinese. That's so 1999. The hip, ultra-efficient city-dwellers of 2015 have Soylent on tap.
- mw67 11y ago
  please elaborate on how being so late is a feature please? i don't get it
  - telotortium 11y ago
    /s

pbreit 11y ago

The $1 is a bit misleading as it is apparently relying on tipping to make up the difference. Which strikes me as kinda weak. Getting something now is definitely better than getting it later which is definitely better than getting it tomorrow and on and on. But there are not a lot of things that I really need now or today. And I suspect most will be unwilling to pay for speed very much.

codezero 11y ago

On mobile this is giving me an internal server error, is it just me? :(

kentt 11y ago
Same for me.

jbuzbee 11y ago

One commenter on the article claims that prices are jacked up to hide the true delivery cost. Wonder if that's the case?

gergles 11y ago
Postmates charges exactly what the retailer charged you plus 9% (it's a transparent markup, not an opaque one like Instacart.)
- erdle 11y ago
  Could you shed some more light on this? Instacart claims to offer in store prices for my local store. Although I have caught a few issues where they charged double for an avocado or something like that but it seems like more of a data entry error based on the current price of "2 for 1"
  - gergles 11y ago
    Oh, they don't have that feature in my area (yet?) - if I browse Instacart for Trader Joe's, I see "15%+ higher than in-store pricing" and it is generally on the plus side more than the 15% side. (The average markup seems closer to 25%, it is a really really poor deal.) I've never seen the in store pricing option here.
    - frankdenbow 11y ago
      In SF some of the stores (Whole Foods, BiRite, Smart & Final) all are listed with "Prices are same as in store"
  - aviv 11y ago
    IIRC Instacart also makes money from the price difference of products that are listed at their regular price yet are offered on sale at the store when actually bought by an Instacart shopper. That may have changed since their early days.
DanFeldman 11y ago

jchicity 11y ago

Kozmo.com anybody.....

serve_yay 11y ago

Hmm, I paid $5 for delivery. They had some $2 burrito special but they picked the worst burrito place in my neighborhood and after the delivery charge and a decent tip, it didn't seem like a particularly good deal. They did do a good job of getting lots of napkins and sauces and utensils though. I am not sure about this style of food delivery, it's weird and off putting to me though I can't exactly say why.

swozey 11y ago
I use it (eat24 mostly) all the time. I love it. I usually eat dinner alone and it's nice to just be able to order whatever I want while watching Netflix. It's perfect for anxious people like myself.

nathancahill 11y ago

Ha, just finished reading this about delivery startups: https://medium.com/@alexschiff/dear-food-delivery-startup-dcb2f582e295 https://medium.com/@alexschiff/dear-food-delivery-startup-dc...

erdle 11y ago

My startup is bootstrapped and does deliveries. In fact we actually hired people that hated the old/current Postmates model. But basically, it's not an easy business model and it's not one that makes financial sense, no matter what the funding, city, tipping situation is. Deliveries = Time Time = Money If you want someone to have time to make deliveries, you have to pay them enough money to have that time. Until VERY EXPENSIVE robots and cars replace people, deliveries will always be expensive, and relatively dependent on the speed of traffic + production. And even once we have robots, we'll need to charge enough to cover the robots, the guy that repairs the robots and money to invest in the next robot. That probably will be more than an dollar... especially when you factor in energy for the robots.

Plough_Jogger 11y ago
I think the long-term hypothesis of many of these companies is that you can hit a critical mass where your logistics can be made significantly more efficient. The current efficiency bottleneck, both in terms of cost and time, results from the fact that deliveries are infrequent and relatively distant. If enough people were ordering in an area, the theory goes, you could efficiently route delivery drivers to minimize the amount of time spent between deliveries and restaurants. Whether this works in practice remains to be seen.
prawn 11y ago
I have a feeling that we'll solve self-driving cars to your driveway a long time before we solve getting the package from there to a person/porch/mailbox. I reckon for some time we'll see people sitting in self-driving cars just to take care of the final hand over. Actually, just struck me that what might work is an Amazon Locker on wheels plus an Uber-style app. You track the package drawing near via app (plus alerts) then go outside to grab it from an opening on the van before the vehicle recognises a completed transaction and drives off. You could take a delivery at a park, home, work, anywhere with a road nearby.
- mahyarm 11y ago
  TBH, I think drone deliveries are possible today technologically, unlike self driving cars, and those can deliver to most porches.

rblatz 11y ago

I've used Postmates a couple of times at work when I've been too busy to actually go out to lunch. I can also see using them in a few other situations. I've been very happy with the service, but I'm not sure the market is as big as people are hoping. But interestingly, I see this as a huge win for people that may be home-bound due to age or injury. Specialty services that cater to this demographic are expensive and not nearly as responsive.