Delivery

Postmates Expands Delivery To 1,000 More Cities

Postmates

Delivery company Postmates announced on Tuesday (April 23) that it is expanding and adding 1,000 more cities, bringing the total number of cities it serves to 3,500 across all 50 states, according to report by Fortune.

Postmates said it’s now available to upwards of 70 percent of households in the country, which is up from 26 percent in the middle of 2018.

Postmates is currently preparing an initial public offering (IPO), for which it filed quietly in February. The company will join a slew of high-profile tech companies that have filed for IPOs this year, including Uber and Lyft.

The company is in a crowded market and has many competitors, including Grubhub, Uber Eats and DoorDash.

The company is the fourth-biggest food delivery service by user spending, and has had two huge investments recently to the tune of $400 million, which has allowed for expansion.

“We weren’t able to spend that much money in 2018 because we weren’t the most capitalized player,” said Postmates CEO Bastian Lehmann, in reference to DoorDash and Uber Eats. “We are now putting the money we have raised to great use.”

Postmates has a valuation of $1.85 billion, compared to $7.1 billion for DoorDash. Postmates, however, doesn’t only deliver food. It will deliver anything from a toothbrush to alcohol.

Lehmann co-founded the company with Sean Plaice and Sam Street in 2011.

“We wanted to enable anyone to have anything on-demand,” Lehmann said.

Postmates leans toward millennials, which make up about 75 percent of its customer base, and it’s been introducing new services to help increase its business and efficiency.

It debuted Postmates Unlimited, which lets customers get free delivery for orders over $15, in 2016. Lehmann said the service makes up a third of all orders and triples the numbers of orders a customer will make, on average.

Postmates has also avoided some of the blowback other delivery companies have faced over covering workers’ wages with tips.

“I think it’s horrible to subsidize the earnings with tips,” Lehmann said. “We have never even entertained the thought that we could disguise the pickup fee from you, so we can subsidize it with the tips you’re getting.”

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