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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

#81

Post by Spivak »

boomboomsubban wrote: post #72
BurningFrog wrote: post #61

Earlier quoted context omitted.

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.

Papa John’s is kinda unique in that they game themselves quite often and use it to their advantage. I will order pizza and have zero problem with the delivery or order and I’ll get one of those “we’re sorry” postcards. It’s just a better than average coupon and since they expire quickly there’s pressure to use it.

I’m kinda surprised (and happy) that all these delivery startups haven’t figured out that bs customer service can be a way to make money.

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

#82

Post by duxup »

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!

Generally people trying to scam customer service out of a free pizza doesn't seem to happen at scale at least based on my experience in the food industry.

Folks who demand free food do it regardless of if it can be done or not and most everyone else just shrugs their shoulders and doesn't want to talk to anyone about their experience.

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

#83

Post by MattGaiser »

ByteJockey wrote: post #78
bhl wrote: post #66

Earlier quoted context omitted.

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 b…

Yeah, but the delivery companies take 20-30% of the gross food order.

So while they aren’t technically vertically integrated, they have the pricing of vertical integration (assuming typical restaurant margins).

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

#84

Post by duxup »

badestrand wrote: post #55
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…

> Margins are terrible, if they’re ever positive. It’s just a bad business. That's simply false. A lot of profit is made in the space and as soon as you have some significant market share it becomes a cash cow. Yes, it might not always work to start up in a already saturated market, but that shouldn't be a surprise.

Are food delivery services cash cows?

I hadn't gotten that impression.

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

#85

Post by [deleted] »

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)?

[deleted]

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

#86

Post by airstrike »

sequoia wrote: post #60
Swizec wrote: post #49

Earlier quoted context omitted.

> Would not be surprised 30y from now most homes won't have kitchen anymore. You'll have an access where a drone can come in an deliver whatever you ordered. I suspect you vastly underestimate how cheap and time effective cooking at home can be. My girlfriend and I just mealprepped 8 meals for $30. Took 15min of active work. The whole week we both get a healthy balanced meal that takes 2min to prepare. No delivery co…

My interest is piqued. What 8 meals did you make in 15 minutes? Did you purchase already cooked food?

Get a bag of Atlantic Salmon from Whole Foods, season 6 fillets, wrap them in foil and throw them in an air fryer for 12 minutes. Boom, done!

In the meantime, you can microwave some frozen jasmine rice, veggies, or a mix of both. You can make baked sweet potatoes on the same air fryer though those take ~30 mins until they're nice and soft.

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

#87

Post by twelvechairs »

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)?

It worked as a vertical before technology allowed it to work as a horizontal.

Now it is just a value proposition. Dominos can still make it work because the delivery is bundled with incredibly cheap to produce food. Horizontals do work and aren't going away but right now there's many players making the bet that future market position is more important than current revenue so its not making great money today.

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

#88

Post by mardifoufs »

texasbigdata wrote: post #21
mardifoufs wrote: post #10

Earlier quoted context omitted.

Still surprising that they have managed a ~3x exit. They were raising money at a 1.3b$ valuation as recently as 2018 and to me it seems like Postmates is further behind it's competition in terms of growth and market share than it was 2 years ago.

Not sure you can do the division like that without knowing what percent of the company the contributed capital represented.

Oh, yeah that's an embarassing lapsus.To my defense,it seems like most of the equity is owned by investors and not founders, so the average return of the 900m$ is probably still around 3x~. It also seems like they have never been valued higher than the price Uber paid for them so odds are few investors got really burnt regardless of when they invested.

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

#89

Post by wiseleo »

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)?

Domino’s delivery is subsidized by tips.

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

#90

Post by xzel »

sequoia wrote: post #60
Swizec wrote: post #49

Earlier quoted context omitted.

> Would not be surprised 30y from now most homes won't have kitchen anymore. You'll have an access where a drone can come in an deliver whatever you ordered. I suspect you vastly underestimate how cheap and time effective cooking at home can be. My girlfriend and I just mealprepped 8 meals for $30. Took 15min of active work. The whole week we both get a healthy balanced meal that takes 2min to prepare. No delivery co…

My interest is piqued. What 8 meals did you make in 15 minutes? Did you purchase already cooked food?

Not OP but baked chicken, slow cooked pork shoulder and rice or another grain probably takes about 15 minutes of active work (cook time obviously is longer). Throw some corn or green with that combo and you've got a pretty healthy and balanced set of meals. Make larger portions, buy some re-usable takeout trays and you're on your meal prep jouney. The biggest annoyance with meal prepping is redundancy in your meals but if you're okay with repetition you'll be fine.

I personally air on the side of making large portion of a meat, say chicken, and just making different variations with that pre-cooked meat through out the week. Shouldn't take more than 10 minutes a night with pre-cooked chicken to do something like chicken and pasta, chicken quesadilla, chicken salad, chicken on top of salad, chicken sandwich etc. Unless you're making a multi dish or complicated meal cooking really doesn't take that long.

Last thing, I love doing sous vide and it takes actual prep time down a lot. I'll throw a steak in when I go to work, turn it on while I'm not home and it will be done when I get back; sear it for a minute and it is good to go.

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