Uber Buys Postmates

We all had this on the bingo card right?

Welcome to Expedite, a (mostly) weekly newsletter by Kristen Hawley covering what’s important in restaurant technology. 


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Uber Buys Postmates

On Sunday night, news broke that Uber would acquire Postmates for $2.65 billion in an all-stock offer, which the company officially confirmed on Monday morning. 

Uber plans to keep Postmates running on its own, reminiscent of DoorDash’s approach to Caviar after buying the company from Square last summer. (Has it really only been a year? Sheesh.)  

Whether or not this is a long-term strategy, it’s a good one. Caviar got its start among the sort of smaller independent restaurants that wouldn’t typically offer delivery. I remember when it launched in San Francisco and the idea of getting an $18 fancy cheeseburger delivered to your house still felt  novel. UberPostmates (my word not theirs) can maintain that vibe with a smaller, targeted app that features indie spots, especially in a pandemic when we’re willing to throw down more cash for this kind of fine dining at home. The Postmates logo depicts a courier on a bicycle — not exactly the food delivery image that Uber has cultivated here in the U.S, but one that feels decidedly local, even if, more often than not, your order arrives in a car anyhow. 

This distinction becomes further important when you consider the next bit of news out of Uber this week: the company is launching grocery delivery in Latin America and Canada, and it’ll come stateside a little later. Importantly, the Information’s Amir Efrati notes that Uber faces a potential big challenge to domestic grocery delivery: Instacart. The well-funded company has exclusive deals with many grocery retailers (and we’ll assume that exclusivity in grocery means more than exclusivity in restaurant delivery.) Uber says grocery orders on the platform are up 197 percent since March. 

The pandemic has certainly expedited these services, and the way we are living today underscores their future importance. I think I used Postmates to pick up a prescription from the pharmacy in 2012, and it’s still incredibly useful for services like this (in my house, we use Postmates for pints of ice cream and Papalote burritos.) Also in San Francisco right now I can get plenty of sundries delivered by DoorDash from real places like CVS, or from somewhere like Everyday Essentials Corner Store which lists its location as the same address linked to Travis Kalanick’s CloudKitchens startup in 2019. 

On the playing field where customer acquisition — that’s diners, not restaurants — matters more than anything, these third party apps must be perceived by consumers as useful in a variety of situations. (Uber’s stated goal in its own press release is “bringing you closer to the things you need, all in one place.”) And for all the negative press, restaurants are paying for these services because they bring them business. (Grubstreet reported this out nicely.) 

As Uber’s Postmates press release notes, Postmates was a “pioneer” in on-demand delivery — it launched waaaay back in 2011, a few years before Uber Eats but after Uber’s ridesharing business. It was also early to launch a monthly subscription plan that offers customers free order delivery for a flat monthly fee, the Amazon Prime of local businesses. Uber maintains its own subscription service, though currently Eats Pass is only available in some locations. With all of this consolidation, I’d expect that to change, with diners/riders/consumers outsourcing their local logistics to Uber — or someone like Uber — for a flat monthly rate. 

Ratings Rankings Reviews

Last week, The Infatuation announced it would eliminate numerical rankings from its reviews, a choice its CEO called it a huge decision, noting that the ratings had been a cornerstone of The Infatuation’s reviews for over a decade. 

Supporters of rankings argue that numbers or stars or some other way of quantifying how a restaurant does its job provide an easy way to compare A with B. But, as Infatuation CEO Chris Stang noted on Twitter, “We need to be supporting the restaurant industry during this time in every way possible, and we're confident this will also help us better serve our readers.” Other reviewers have ditched numbers in the past; notably the LA Times under critic Jonathan Gold, and, more recently, the San Francisco Chronicle

Cheesy Title Here

A spate of Chuck E. Cheese tributes poured out on the internet after the restaurant’s parent company filed for bankruptcy. The brand became briefly relevant to many of our adult lives again after news surfaced that it was listing itself under a different name — Pasqually’s Pizza — on delivery apps to get business during the pandemic. The chain isn’t likely to go anywhere just like J.Crew, which also filed, will stick around for some time. If you’re curious how Chapter 11 filings work (and, by extension, what’s likely to happen to Chuck E. Cheese and its ilk), I like this Marker piece, which explains why Chuck E. Cheese fans need not yet fret — though don’t tell your mom what’s going to happen to Pier One.

Expedite is produced by Kristen Hawley, a San Francisco-based journalist with over six years of experience covering the restaurant technology industry. Previous iterations of this content were available via Chefs+Tech and Skift Table. Thanks for reading. 

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