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Uber, Postmates Agree on $2.65B All-Stock Deal

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Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#71

Post by bhahn »

mardifoufs wrote: post #8

What's Postmates moat? Having never used it, I don't necessarily see the 2.6b$ value in a smaller delivery app that is only really used in some areas of the US. Though I'm sure there is something I'm missing and 2.6b$ is probably less expensive than the cost of pricing Postmates out of the market especially considering it's an all stocks deal. It's just that delivery seems to be easily scalable and easy to just dump…

To clarify, the total funding amount is a bit more than $700m. $903m according to Crunchbase.

https://www.crunchbase.com/organization/postmates

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#72

Post by boomboomsubban »

BurningFrog wrote: post #61
tyre wrote: post #42

Earlier quoted context omitted.

I had a few friends in customer support. This happened all the time. If you spend too long going back and forth with a customer, the salary-based calculation of what it costs the company doesn’t make sense. So you give it to them free. But then it’s not like you have any margins that those come out of.

But as your customers learn that wasting support time pays off, the game is surely over!

Every traditional delivery place will already do this, call Dominos and make up some way they got your pizza wrong and they'll send a new one. The benefit from gaming the system isn't worth it for most people.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#73

Post by mardifoufs »

acwan93 wrote: post #34
mardifoufs wrote: post #8

What's Postmates moat? Having never used it, I don't necessarily see the 2.6b$ value in a smaller delivery app that is only really used in some areas of the US. Though I'm sure there is something I'm missing and 2.6b$ is probably less expensive than the cost of pricing Postmates out of the market especially considering it's an all stocks deal. It's just that delivery seems to be easily scalable and easy to just dump…

I use Grubhub most of the time, and I’ve found the thing that keeps me on the platform is 1) The $10 monthly credit on American Express Gold cards and 2) The 2% cash back from the Rakuten portal, which stacks with the 4x points from the Amex card. Of course, a lot of restaurants end up increasing their prices on Grubhub to make up for their fees, and rightly so (I phone in using the number listed on Apple Maps). I st…

Exactly,those are amazing perks but they make for very expensive moat. As long as they need to bribe their users to stay with different financial incentives they will keep being glorified VC money redistribution schemes. My guess is that we will see a shift towards profitability when either cash dries out (which would mean Uber wins, they have deeper pockets and cashflow from ride sharing) or restaurants start to shift towards delivery optimized structures that would bring down delivery times and increase margins. I wouldn't bet on market domination from any player yet considering Just Eat's recent moves and deep pockets.

A little off topic, but wow it always amazes me how good credit card rewards are in the US.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#74

Post by manigandham »

selectodude wrote: post #45
manigandham wrote: post #12

Earlier quoted context omitted.

Grubhub is mostly big in NYC. Doordash has the most marketshare at around 45% and good coverage in the US. Postmates and Uber Eats were battling for 3rd place. Postmates seems to have more restaurants on board along with branching out into drinks and convenience stores, and I believe general shopping in certain regions.

GrubHub is huge in Chicago, in fact it was started at University of Chicago and is still based in Chicago.

Overall Doordash has beat them, especially now with the pandemic. Here's a breakdown: https://secondmeasure.com/datapoints/food-delivery-services-...

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#75

Post by hevelvarik »

xvector wrote: post #63
csours wrote: post #31

Earlier quoted context omitted.

I saw someone online saying how they didn't get their ranch with their pizza, so they called up customer service and eventually got a whole new pizza out of the deal. I understand it sucks to not get your ranch, but come on...

Perhaps because of this Doordash has been aggressively cutting their refund policies. If an item is not delivered you don't get a full refund and often don't even get a refund for the item price + tax on said item.

How is that legal? Is there something in the terms of use for the app that you have to accept

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#76

Post by nemothekid »

mardifoufs wrote: post #67
tyre wrote: post #24

Food delivery is a terrible business. M&A won’t make it better. I worked at LivingSocial in 2012/2013. We used to joke that “we lose money on every transaction but make it up in scale.” Takeout and Delivery was one of the last bets the company made. Basically food delivery. The customer service load is huge, the services aren’t really differentiated, and you have to both pay the driver enough for it to be worth it an…

Imo Netflix is much worst in that regard. At least in this case, you can hope to won a capital attrition war and become the really big player. But for Netflix, it's literally a never ending spring in a hamster wheel. You have users that can almost instantly leave your platform if you don't have interesting content, so you need to perpetually use whatever money subscriptions generate to produce even more content, even…

Not sure I understand - Netflix has the same problem as Disney and HBO, they must spend a ton on content to differentiate.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#77

Post by MattGaiser »

bhl wrote: post #66
tyre wrote: post #24

Food delivery is a terrible business. M&A won’t make it better. I worked at LivingSocial in 2012/2013. We used to joke that “we lose money on every transaction but make it up in scale.” Takeout and Delivery was one of the last bets the company made. Basically food delivery. The customer service load is huge, the services aren’t really differentiated, and you have to both pay the driver enough for it to be worth it an…

I think a questions that’s going to pop up is, why does delivery work for a company like Dominos’s (vertical integration) but not Postmates (horizontal)?

I am betting it is density.

I can order Chinese From halfway across the city for the same price as delivery by Dominos. The closest Dominos is 5 minute walk away. The next is a 5 minute drive. The Chinese food is 25 minutes away.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#78

Post by ByteJockey »

bhl wrote: post #66
tyre wrote: post #24

Food delivery is a terrible business. M&A won’t make it better. I worked at LivingSocial in 2012/2013. We used to joke that “we lose money on every transaction but make it up in scale.” Takeout and Delivery was one of the last bets the company made. Basically food delivery. The customer service load is huge, the services aren’t really differentiated, and you have to both pay the driver enough for it to be worth it an…

I think a questions that’s going to pop up is, why does delivery work for a company like Dominos’s (vertical integration) but not Postmates (horizontal)?

You're assuming that domino's makes a profit on food delivery rather than breaking even on it.

But domino's also makes the food, so if they break even on the deliver, that's fine, they made money on the food. Scaling the delivery part of the business also scales the food part.

If you aren't making the food, you have to make money on the delivery alone because scaling your delivery service scales someone else's food business. You're essentially competing with your suppliers (restaurants with their own delivery), and they don't need to make money on the product. That's a hard position to be in.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#80

Post by hardtke »

0zymandias wrote: post #18

I am bullish on this as a recent shareholder. We are now in the consolidation phase of delivery service where fewer companies mean less competition, more efficiency and better economics. This is where Dara’s strength is. He has a history of great dealmaking and acquisitions. I expect Uber to thrive as the industry consolidates.

This merger might trigger an antitrust case. Although people who order stuff might have lower fees through economies of scale, restaurants and drivers could be negatively impacted (more of a monosopy). At some point we need to start considering gig workers as part of antitrust considerations.
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