Image via Postmates.
It’s an exciting time to be alive.
Technology and competition are providing endless convenience options to the point that it’s hard to complain about not getting what you need delivered to your doorstep, whenever and wherever you need it.
From Starbucks Corp. building on its partnership with UberEats to deliver coffee to around 150 cities this year, to DoorDash announcing plan to deliver to 500 US cities by end of 2018, and Postmates, doing 4 million deliveries per month in 550 US cities, the on-demand delivery scene is surely bustling.
Launched in 2011, Postmates handles delivery and pickup of food, beverages and groceries and works with 300,000 merchants and 250,000 carriers across the US. It has recently raised $300 million in additional funding led by Tiger Global Management and is now reportedly valued at $1.2 billion.
This on-demand delivery unicorn might also be filing for an IPO in 2019, according to its CEO, Bastian Lehmann.
“We have a beautiful path to an IPO in 2019,” he said in an interview with Fortune magazine.
During a Holiday dinner event organized by LebNet in San Mateo California on December 10, 2018, Vikrum Aiyer, Vice President Global Public Policy at Postmates and former Senior Advisor at the White House with Sami Arayssi, Business Strategy Lead at Postmates and LebNet former board member, mentioned that the company is serving 60 percent of US households and explained how it is creating an impact on the local economy while being socially responsible.
Fighting food poverty: In an attempt to provide healthy food to shelters and help restaurant owners donate food leftovers, Postmates launched four months ago the Food Fight program, in partnership with the Mayor’s Operations Innovation team in Los Angeles, the creative talent community Working Not Working and Vice Media. Via a button featured on Postmates merchants’ platform in LA, restaurants can click and have someone pick up their food leftover and drop it off at one of the three shelters Postmates is partnering with.
Decreasing carbon footprint: Postmates may be in the logistics business but it doesn’t rely solely on cars to pick up and drop off goods. In New York, where they have the largest fleet, all their deliveries are done by bikes or on foot but in LA, it’s still almost entirely done by automobiles. They recently started testing with automated electric rovers on sidewalks in Washington DC, LA, Miami and other places, which will further decrease the company’s carbon footprint.
“The US spends 400 million hours going to and from grocery stores,” said Aiyer referring to a study by Brooklyn Institute. “We can minimize this and optimize pick up.”
Additionally, Postmates, through its multiple platforms (one for merchants, one for customers and one for carriers), helped local businesses sell over $1.2 billion worth of goods in 2017, according to Aiyer, and carriers earn an extra income.
“In the era of amazon, when more retailers are struggling to compete with it, more local businesses are now able to plug in and sell,” he explained.
On the other hand, the 250,000 carriers Postmates is working with have earned last year alone about $217 million in total, said Aiyer. This number also means that they are earning about $18.32 per hour.”
That said, their network of couriers include students and women over 52 years old, with most of their customers between 18 and 34 years old (60 percent of them are female) and 99 percent of them living in urban areas.
Collaborating with big names
In order to test how people would react to having the goods delivered using a driverless car, Postmates partnered with Ford and Walmart to test a grocery delivery service in Miami.
“When Walmart wants to deliver groceries in Miami they’re using a platform that we [developed] with Ford. This allows us to focus on how to test the future of the workforce and how we make sure that we’re not only investing in the wellbeing of this workforce, but if more jobs were to be automated, how do we make sure we’re developing the skill sets for those workers,” explained Aiyer.
What started with three guys trying to figure out how to get a surfboard delivered to them has now grown to a company of 850 people in the US. In the last four to six months alone, Postmates went from few hundred cities to 550 cities. Despite competition, Sami Arayssi believes there’s room for everyone. They’re operating in an industry worth $550 billion with a 1.3 percent penetration rate, he said. “That’s a huge opportunity for a lot of players,” he said.
By making all these deliveries, Postmates is adding additional jobs to the economy and creating a bigger effect beyond having your food delivered to you on a lazy Sunday.