We live in an age where everybody can order all kinds of products online and have them delivered to their doorstep. In this digital age people are more and more getting used to the on-demand phenomenon, like Netflix or Spotify, where products or services are made directly available to the consumers.
Postmates is operating in the on-demand scene as well, not for digital products but for every tangible product or food-dish available in the regions they operate in. The idea behind this organization is to not make people wait for the products they order but to have the products delivered within the hour. This also helps the small bricks-and-mortar stores compete with big giants like Amazon.com because they can now offer same day delivery as well against low prices. Partnering up with Shopify, the online platform for creating your own web shop, Postmates amplified this movement. Small retailers can now outsource their same day deliveries to local contractors. These local contractors get notification for jobs in the area where they deliver and can respond to them via the platform, and get small fees from Postmates when a delivery is successful, and let us not forget the tips they receive from customers.
They are currently operating only in the U.S. but in more than 100 cities where thousands of individual couriers are delivering ready-to-eat food, groceries and other products to consumers within the before mentioned one-hour timeframe. Besides partnering up with Shopify, they also signed partnerships with MacDonald’s, Apple and a lot of other businesses to extend their brand name and services.
Some local restaurants owners are not happy with the way Postmates operate, because Postmates does not ask for permission from the restaurants to deliver their food to costumers. They just let individual couriers pick up and deliver the desired food-dish, but many restaurant owners do not trust Postmates’ couriers handling their food properly. This way the delivery can result in low customer satisfaction without the restaurants to blame.
The delivery industry is also very competitive, companies like UberEats (Ubers’ food delivery service) and GrubHub (also offering a food delivery service) are also growing rapidly. It is Postmates’ challenge to keep their business attractive not only for customers but also for their couriers. Because of the presence of fierce competition it is not unthinkable that an independent courier delivering for Postmates, can switch to a competitor when the courier can make more money per delivery when switching.
Postmates recently raised over a hundred million dollars of funding and they are going to need additional financing if they want to expand internationally, keep their couriers and customers happy but also invent new business models to compete in this industry.
Sources:
Postmates is raising at least $100 million to fuel its on-demand ambitions
http://www.sandiegouniontribune.com/business/sdut-shopify-postmates-same-day-delivery-small-2016may03-story.html
