7 ms·

Postmates launches Amazon Prime-style subscription service

52 points by Spendar89 11y ago

ghayes 11y ago
> In order not to lose money, Postmates is limiting the free deliveries to orders over $30, which make up about 50% of the orders on Postmates. New employee here (just joined this week) -- one of the things that I find so compelling about Postmates is that it's focused on building a profitable business, without having to subsidize orders.
- mbesto 11y ago
  > one of the things that I find so compelling about Postmates is that it's focused on building a profitable business, without having to subsidize orders. So, like...ummm... a real business?
  - CPLX 11y ago
    Don't tell anyone but that's kind of unusual around these parts.
    - joshmn 11y ago
      This must be the secret sauce I keep hearing about!
  - MisterBastahrd 11y ago
    Well, it beats "let's build a pile of woo and then get rich people to throw money at us while we try to figure out how to make it into a business" which is common around here.
  - hemantv 11y ago
    You will be amazed at what our margins look like. To find out more send me your resume and I will tell you everything on your first day.
- deleted 11y ago
  [deleted]
- melvinmt 11y ago
  > without having to subsidize orders If there's another market player that is willing to subsidize orders and provide the same service as you (let's call them Amazon, Google, and Uber) then commanding a profit is not feasible, so I'm not sure if that's the right thing to be chasing at this moment, as Jeff Bezos famously said: "Your margin is my opportunity". On-demand delivery is increasingly becoming a commodity business, coupled with a labor-scarce market and big players that have more money to spend on their side project than your entire market cap. Don't get me wrong, I love Postmates, but won't use it for a while because UberEATS is providing free delivery to me for the next 3 months - and that's the problem!
  - seanplaice 11y ago
    I think there is a difference between chasing profits and requiring them. Postmates is a market place and platform, for us to be successful we have to drive value to everyone that participates. That means driving value to our Postmates, customers and merchant partners. This also includes us, Postmates, as a participant of the platform. Maintaining strong unit economics ensures that we are building the right products and operating the platform effectively. It is easy to subsidize if you have the capital but beyond just being expensive you also lose an important signal to running your platform. Our requirement for strong unit economics has made our work harder but I do believe that it has made us make better decisions and force us to innovate instead of spend. EDIT: This comment was made before it was edited. I would like to follow up to the edits. Specifically the Bezos mention on about margins. There is a difference between seeking strong unit economics and profits and having them. Postmates has always had them by choice. We can choose do whatever we wish with those margins. We have regularly reduced our pricing because we have made our platform more efficient. If you were subsidizing your growth you wouldn't have the motivation or signals to identify the efficiencies. If you are subsidizing your unit economics and your competition drops prices they are forcing you to lose more money. We prefer seek efficiencies and pass those savings on instead of just spending more money.
    - a_small_island 11y ago
      >If you are subsidizing your unit economics and your competition drops prices they are forcing you to lose more money. We prefer seek efficiencies and pass those savings on instead of just spending more money. Unless by subsidizing, this company takes more market share and causes the non-subsidizer to dip into their own margin, and the race to the bottom continues.
- choward 11y ago
  > without having to subsidize orders Now stop making me subsidize your employees by encouraging me to tip.
gkop 11y ago
The article mentions "merchant" over and over again and never "restaurant". Does this mean Postmates has shifted its focus away from restaurants? Edit: thanks for the replies below. Restaurants are the vendors where I most often find myself wanting something very specific delivered in a timely manner and been willing to pay a small premium - Postmates serves this use case better than any other service - glad to hear you will continue to support it even as you invest in other markets as well!
- seanplaice 11y ago
  No shift in focus, we have always supported more than restaurants. Our goal is to make everything in your city available on-demand. You are correct though, food has been a huge catalyst for our early growth.
- ananddass 11y ago
  Disclosure: I am on the B.D & partnerships team on Postmates. We haven't shifted focus away from restaurants. We have about 3000 Plus partners today of which a majority are restaurants. We've always done more than restaurants. Food is most of what we do but there are also grocery, apparel, electronics, essentials retailers on Postmates.
- deleted 11y ago
  [deleted]
stephenitis 11y ago
I feel like uber deliveries, postmates, amazon prime, google express are all converging towards similar business models.
- mmanfrin 11y ago
  If you can deliver one thing at cost, delivering a second thing to the same person is gravy. I think a lot of these companies are converting on the same location because a $5 delivery fee for a package will mean the $4.99 delivery fee for lunch is profit. They're trying to all capture a second delivery market.
- losteric 11y ago
  I'd say Amazon Prime is a different animal entirely, but Prime Now and all those other businesses are all focused on building a new "last-mile" delivery model (with some nuances around point-to-point delivery vs warehouse fulfillment)
- Dwolb 11y ago
  I dunno, I feel like this is a mash-up between GrubHub and Amazon. Postmates is cool because they have the logistics to get you your food but they ALSO have the integration with the store menu and ordering system (maybe in the future, real time inventory). It's more like Instacart, but the grocery is the restaurant, the shoppers are the food preparers, and the delivery people use bikes or walk instead of a car (important due to lower fixed costs for the delivery people).
free2rhyme214 11y ago
I feel like Postmates will be acquired by Amazon or Google. Then again DoorDash intended to do more than food in the beginning, so I wouldn't be surprised to see them challenge Postmates soon.
bluetidepro 11y ago
> "Postmates is limiting the free deliveries to orders over $30, which make up about 50% of the orders" 1. I guess as a single person, I don't fall in this 50%. I never have orders that large, which makes this service something I'm obviously not that interested in. They should have made it appeal to all 100% of their users, like Amazon Prime. They could have made it so it was free delivery based on just select places where it made sense. Why cut off 50% of your user base for the subscription service? > "..free delivery on all orders from over 3,000 Plus merchants..." 2. This is incredibly misleading. "over 3,000" has to refer to their entire market because here in Chicago, I've only ever seen about 10-15 places that show up in the "Plus" section. That's a pretty limited amount of restaurants in the "Plus". That list has also only changed maybe once or twice in the months they have had "Plus". And it's a very small variety (of honestly, not that amazing places). I wonder with the addition of this service they actually end up beefing that number up in their various markets because right now, that stat is just marketing fluff. As you can see on my two points above, I'm not sold this is going to play out anywhere as well as Amazon Prime did. I bet they see a pretty slow adoption rate on this until they make it much more compelling. Or I also assume a lot of people are going to sign up for this only to be disappointed by the lack of options I mentioned in my 2nd note above. They are definitely marketing it in a misleading way. Also, it's worth mentioning that Postmates has one of the worst custom support teams I've ever seen. On two separate occasions I have sent an order issues support ticket to never get a response back. Which was even more frustrating when it said they always get back to you within 24 hours after I submitted the issues. I had to eventually complain about it on Twitter before I finally got a reply from them. Quite the bummer. EDIT: I do want to add a quick note to this. While I'm very critical above, I do indeed think Postmates has the best UX and app of the similar services available. Once they can just iron out some of the kinks I mentioned above, I think the potential of the service is indeed high.
- bastian 11y ago
  Postmates Co-founder here: 1. We will bring this down over time, give us a few weeks. ;) 2. We have over 3,000 Plus merchants across the markets we're operating in. I can't think of a direct competitor who has more and we're adding many, many every week. 3. Our customer service has been suffering lately - this is a totally valid point. At some point we didn't catch up well enough with our growth. I'm personally working with the team and we're doing many things to improve this. I hope we can move the needle here soon.
theapology 11y ago
Correct me if I'm wrong, but you can only upgrade to this service of PostMates if you have an iPhone? That seems kinda odd...
sshumaker 11y ago
Between my wife and myself, I've ordered from Postmates over a hundred times. But we barely use the service anymore because it has gotten so unreliable. Even aside from the frequent "No Postmates are available", a large number of orders have issues, from excessive delays to missing items to even orders that don't show up. And while they eventually get taken care of by customer support, after waiting for two hours for dinner only to find out it's not coming, getting a refund is small consolation. (I almost feel like sometime last year they switched to a model where the delivery person places the order instead of a call center. If that's true, it would help explain the drop in timeliness). So while the app UX is decent the overall user experience leaves a lot to be desired. I realize it's a different model, but we have way better luck with caviar.
- bastian 11y ago
  I 100% agree. We faced some pretty crazy challenges in scaling our support team. Placing orders from over 50K merchants (per month) is not a simple task BUT i'm not trying to find excuses here. We're doing the right things and they will hopefully move the needle. If you order from our Plus merchants, the order is placed electronically and this reduces the error rate drastically. Email me at: bastian@postmates.com and i will mark your account with a free subscription so you can try it out.
  - pbarnes_1 11y ago
    I say this having ordered probably 1000+ times through Postmates: It's not about the merchant. It's about the delivery. Your dispatch system needs an overhaul. It has improved again lately but there was a period of several months when not a single Postmates delivery went right for me, and I'm in SOMA, and only order from restaurants around here. I used to be 100% Postmates, spending maybe $2k/m but now I'm this: IF HOT FOOD REQUIRED: IS AVAILABLE ON UBER EATS: UBER EATS ELSE POSTMATES ELSE DOORDASH UberEats is unfortunately a much better experience than Postmates now. :/
    - bastian 11y ago
      I can guarantee you that we will be relentless in improving dispatch, ordering and customer service. Recent changes dropped our average delivery times. In April we will switch to an auto-accept mode for all deliveries and we will also aggressively target faster pick-up times. Sorry we've let you down pbarnes.
DanBlake 11y ago
Anyone have any math on how many orders / how much you would have to spend a month to make this worthwhile?
mrgoldenbrown 11y ago
I went to postmates.com and saw they supported Boston. Great! So I enter my address, and then get an error message saying they don't support my area, why don't I browse their list of current cities - which includes Boston. Is there a map somewhere of the subset of Boston they actually support?
- magerleagues 11y ago
  http://zones.postmates.com/ http://zones.postmates.com/

52 points by Spendar89 11y ago

> In order not to lose money, Postmates is limiting the free deliveries to orders over $30, which make up about 50% of the orders on Postmates. New employee here (just joined this week) -- one of the things that I find so compelling about Postmates is that it's focused on building a profitable business, without having to subsidize orders.

mbesto 11y ago
> one of the things that I find so compelling about Postmates is that it's focused on building a profitable business, without having to subsidize orders. So, like...ummm... a real business?
- CPLX 11y ago
  Don't tell anyone but that's kind of unusual around these parts.
  - joshmn 11y ago
    This must be the secret sauce I keep hearing about!
- MisterBastahrd 11y ago
  Well, it beats "let's build a pile of woo and then get rich people to throw money at us while we try to figure out how to make it into a business" which is common around here.
- hemantv 11y ago
  You will be amazed at what our margins look like. To find out more send me your resume and I will tell you everything on your first day.
deleted 11y ago
[deleted]
melvinmt 11y ago
> without having to subsidize orders If there's another market player that is willing to subsidize orders and provide the same service as you (let's call them Amazon, Google, and Uber) then commanding a profit is not feasible, so I'm not sure if that's the right thing to be chasing at this moment, as Jeff Bezos famously said: "Your margin is my opportunity". On-demand delivery is increasingly becoming a commodity business, coupled with a labor-scarce market and big players that have more money to spend on their side project than your entire market cap. Don't get me wrong, I love Postmates, but won't use it for a while because UberEATS is providing free delivery to me for the next 3 months - and that's the problem!
- seanplaice 11y ago
  I think there is a difference between chasing profits and requiring them. Postmates is a market place and platform, for us to be successful we have to drive value to everyone that participates. That means driving value to our Postmates, customers and merchant partners. This also includes us, Postmates, as a participant of the platform. Maintaining strong unit economics ensures that we are building the right products and operating the platform effectively. It is easy to subsidize if you have the capital but beyond just being expensive you also lose an important signal to running your platform. Our requirement for strong unit economics has made our work harder but I do believe that it has made us make better decisions and force us to innovate instead of spend. EDIT: This comment was made before it was edited. I would like to follow up to the edits. Specifically the Bezos mention on about margins. There is a difference between seeking strong unit economics and profits and having them. Postmates has always had them by choice. We can choose do whatever we wish with those margins. We have regularly reduced our pricing because we have made our platform more efficient. If you were subsidizing your growth you wouldn't have the motivation or signals to identify the efficiencies. If you are subsidizing your unit economics and your competition drops prices they are forcing you to lose more money. We prefer seek efficiencies and pass those savings on instead of just spending more money.
  - a_small_island 11y ago
    >If you are subsidizing your unit economics and your competition drops prices they are forcing you to lose more money. We prefer seek efficiencies and pass those savings on instead of just spending more money. Unless by subsidizing, this company takes more market share and causes the non-subsidizer to dip into their own margin, and the race to the bottom continues.
choward 11y ago
> without having to subsidize orders Now stop making me subsidize your employees by encouraging me to tip.

gkop 11y ago

The article mentions "merchant" over and over again and never "restaurant". Does this mean Postmates has shifted its focus away from restaurants? Edit: thanks for the replies below. Restaurants are the vendors where I most often find myself wanting something very specific delivered in a timely manner and been willing to pay a small premium - Postmates serves this use case better than any other service - glad to hear you will continue to support it even as you invest in other markets as well!

seanplaice 11y ago
No shift in focus, we have always supported more than restaurants. Our goal is to make everything in your city available on-demand. You are correct though, food has been a huge catalyst for our early growth.
ananddass 11y ago
Disclosure: I am on the B.D & partnerships team on Postmates. We haven't shifted focus away from restaurants. We have about 3000 Plus partners today of which a majority are restaurants. We've always done more than restaurants. Food is most of what we do but there are also grocery, apparel, electronics, essentials retailers on Postmates.
deleted 11y ago
[deleted]

stephenitis 11y ago

I feel like uber deliveries, postmates, amazon prime, google express are all converging towards similar business models.

mmanfrin 11y ago
If you can deliver one thing at cost, delivering a second thing to the same person is gravy. I think a lot of these companies are converting on the same location because a $5 delivery fee for a package will mean the $4.99 delivery fee for lunch is profit. They're trying to all capture a second delivery market.
losteric 11y ago
I'd say Amazon Prime is a different animal entirely, but Prime Now and all those other businesses are all focused on building a new "last-mile" delivery model (with some nuances around point-to-point delivery vs warehouse fulfillment)
Dwolb 11y ago
I dunno, I feel like this is a mash-up between GrubHub and Amazon. Postmates is cool because they have the logistics to get you your food but they ALSO have the integration with the store menu and ordering system (maybe in the future, real time inventory). It's more like Instacart, but the grocery is the restaurant, the shoppers are the food preparers, and the delivery people use bikes or walk instead of a car (important due to lower fixed costs for the delivery people).

free2rhyme214 11y ago

I feel like Postmates will be acquired by Amazon or Google. Then again DoorDash intended to do more than food in the beginning, so I wouldn't be surprised to see them challenge Postmates soon.

bluetidepro 11y ago

> "Postmates is limiting the free deliveries to orders over $30, which make up about 50% of the orders" 1. I guess as a single person, I don't fall in this 50%. I never have orders that large, which makes this service something I'm obviously not that interested in. They should have made it appeal to all 100% of their users, like Amazon Prime. They could have made it so it was free delivery based on just select places where it made sense. Why cut off 50% of your user base for the subscription service? > "..free delivery on all orders from over 3,000 Plus merchants..." 2. This is incredibly misleading. "over 3,000" has to refer to their entire market because here in Chicago, I've only ever seen about 10-15 places that show up in the "Plus" section. That's a pretty limited amount of restaurants in the "Plus". That list has also only changed maybe once or twice in the months they have had "Plus". And it's a very small variety (of honestly, not that amazing places). I wonder with the addition of this service they actually end up beefing that number up in their various markets because right now, that stat is just marketing fluff. As you can see on my two points above, I'm not sold this is going to play out anywhere as well as Amazon Prime did. I bet they see a pretty slow adoption rate on this until they make it much more compelling. Or I also assume a lot of people are going to sign up for this only to be disappointed by the lack of options I mentioned in my 2nd note above. They are definitely marketing it in a misleading way. Also, it's worth mentioning that Postmates has one of the worst custom support teams I've ever seen. On two separate occasions I have sent an order issues support ticket to never get a response back. Which was even more frustrating when it said they always get back to you within 24 hours after I submitted the issues. I had to eventually complain about it on Twitter before I finally got a reply from them. Quite the bummer. EDIT: I do want to add a quick note to this. While I'm very critical above, I do indeed think Postmates has the best UX and app of the similar services available. Once they can just iron out some of the kinks I mentioned above, I think the potential of the service is indeed high.

bastian 11y ago
Postmates Co-founder here: 1. We will bring this down over time, give us a few weeks. ;) 2. We have over 3,000 Plus merchants across the markets we're operating in. I can't think of a direct competitor who has more and we're adding many, many every week. 3. Our customer service has been suffering lately - this is a totally valid point. At some point we didn't catch up well enough with our growth. I'm personally working with the team and we're doing many things to improve this. I hope we can move the needle here soon.

theapology 11y ago

Correct me if I'm wrong, but you can only upgrade to this service of PostMates if you have an iPhone? That seems kinda odd...

sshumaker 11y ago

Between my wife and myself, I've ordered from Postmates over a hundred times. But we barely use the service anymore because it has gotten so unreliable. Even aside from the frequent "No Postmates are available", a large number of orders have issues, from excessive delays to missing items to even orders that don't show up. And while they eventually get taken care of by customer support, after waiting for two hours for dinner only to find out it's not coming, getting a refund is small consolation. (I almost feel like sometime last year they switched to a model where the delivery person places the order instead of a call center. If that's true, it would help explain the drop in timeliness). So while the app UX is decent the overall user experience leaves a lot to be desired. I realize it's a different model, but we have way better luck with caviar.

bastian 11y ago
I 100% agree. We faced some pretty crazy challenges in scaling our support team. Placing orders from over 50K merchants (per month) is not a simple task BUT i'm not trying to find excuses here. We're doing the right things and they will hopefully move the needle. If you order from our Plus merchants, the order is placed electronically and this reduces the error rate drastically. Email me at: bastian@postmates.com and i will mark your account with a free subscription so you can try it out.
- pbarnes_1 11y ago
  I say this having ordered probably 1000+ times through Postmates: It's not about the merchant. It's about the delivery. Your dispatch system needs an overhaul. It has improved again lately but there was a period of several months when not a single Postmates delivery went right for me, and I'm in SOMA, and only order from restaurants around here. I used to be 100% Postmates, spending maybe $2k/m but now I'm this: IF HOT FOOD REQUIRED: IS AVAILABLE ON UBER EATS: UBER EATS ELSE POSTMATES ELSE DOORDASH UberEats is unfortunately a much better experience than Postmates now. :/
  - bastian 11y ago
    I can guarantee you that we will be relentless in improving dispatch, ordering and customer service. Recent changes dropped our average delivery times. In April we will switch to an auto-accept mode for all deliveries and we will also aggressively target faster pick-up times. Sorry we've let you down pbarnes.

DanBlake 11y ago

Anyone have any math on how many orders / how much you would have to spend a month to make this worthwhile?

mrgoldenbrown 11y ago

I went to postmates.com and saw they supported Boston. Great! So I enter my address, and then get an error message saying they don't support my area, why don't I browse their list of current cities - which includes Boston. Is there a map somewhere of the subset of Boston they actually support?

magerleagues 11y ago
http://zones.postmates.com/ http://zones.postmates.com/