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|Founded||May 1, 2011|
|Headquarters||San Francisco, California, United States|
|Select cities in United States|
|Bastian Lehman (CEO)
Sean Plaice, Vivek Patel, Kristin Schaefer (Management Team)
Nabeel Hyatt, Brian Singerman, Scott Banister(Board Members)
|Products||Mobile app, website|
|Revenue||$1.0 billion (2018)|
Number of employees
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.
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 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.
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- Allyn, Bobby (2020-05-14). “Restaurants Are Desperate — But You May Not Be Helping When You Use Delivery Apps”. NPR. Archived from the original on 2020-05-17. Retrieved 2020-05-20.
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.
- Baron, Ethan (2020-04-14). “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 2020-04-20. Retrieved 2020-05-19.
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.
- Stempel, Jonathon (2020-04-13). “Grubhub, DoorDash, Postmates, Uber Eats are sued over restaurant prices amid pandemic”. Reuters. Archived from the original on 2020-04-17. Retrieved 2020-05-19.
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.
- Dolmetsch, Chris (2020-04-13). “GrubHub, Doordash Accused in Suit of Pushing Prices Higher”. Bloomberg News. Archived from the original on 2020-04-19. Retrieved 2020-05-19.
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.”
- Davitashvili v GrubHub Inc., Link from NPR article (2020).