Delivery-on-Demand Company Raises $16

Million, Questions About Safety and

Outsourcing

| 02/20/2014 11:05am | 0

Nancy Scola | Next City[1]

Through the Postmates app, you can place an order from any business you want, and

someone will deliver it within an hour. Credit: AP Photo/Pat Wellenbach

The public policy turbulence facing companies like Uber and Lyft has not, it seems,

dampened the flow of money from tech funders to other firms aimed at perfecting

"urban logistics," the au courant term for using networked technologies to move things

around cities more easily. To wit, the New York Times’ Nick Bilton reports on a

successful funding round[2] just concluded by one such company, Postmates[3], whose

ambition is to become "the on-demand delivery infrastructure for every major city in

the world."

Here’s Bilton:

The company said on Tuesday that it was raising $16 million in its series B round of

financing and Nabeel Hyatt, a partner with Spark Capital, the Boston-based venture

firm which led the new financing round, will be joining the company’s board. This will

bring the company’s total financing since it began to $22 million.

If you’re not familiar with Postmates, you’re not alone. The company, founded in 2011,

is up and running only in San Francisco, New York, Seattle and, as of December,

Washington, D.C. (Presumably, this new round of cash should help its expansion

plans.)

Using an app, a Postmates customer places an order from any business that strikes his

or her fancy. The request is then matched in real time with a courier, who goes to said

establishment, buys the item and delivers it in an hour or less. This, of course, expands

the definition of what counts as delivery-able. On the courier side of the equation,

what it takes to become eligible is a bike/car/scooter/motorcycle and an iPhone, though

one can be leased from the company. There’s a background check and a three-minute

orientation, after which the courier is eligible to pick up jobs. Postmates tells couriers

that they might make up to $30 an hour on a good day, based on tips and the bulk of a

$5 per-delivery fee, deposited in their accounts on a weekly basis.

Couriers, as is often the case in the "sharing economy," seem to occupy that space

between “casual worker” and “professional,” though where they stand on this

spectrum can shift even within a single career. The Postmates site quotes Chris Hicks[4]

(1,401 deliveries): "I started out thinking I would do Postmates part-time, in between

jobs, but I fell in love with Postmates. The first thing I did was upgrade my bike. Now I

keep switching out new parts, feels like a video game. I’m addicted to it."

On the civic side of things, the Postmates model raises at least two key questions. One

has to do with safety. The "within an hour" guarantee incentivizes speed and raises

what we might call the Domino’s conundrum[5]: Is it too much to ask a worker to

balance speed and the protection of their job?

The other question has to do with the outsourcing effect on existing delivery people. If

a restaurant, say, can rely on a third-party service whose workers are paid on a per-

delivery basis, could we see the end of full-time delivery folk — who, it’s probably fair

1. http://nextcity.org/daily/author/9074

2. http://bits.blogs.nytimes.com/2014/02/18/postmates-closes-new-funding-round-and-passes-

10000-deliveries-a-week/

3. http://postmates.com/

4. http://postmates.com/apply

5. http://articles.chicagotribune.com/1993-12-22/news/9312220035_1_thomas-monaghan-delivery-

guarantee-delivery-people

6. http://nextcity.org/sharedcity

7. http://knightfoundation.org/

8. http://nextcity.org/daily/tags/tag/shared+city

9. http://nextcity.org/daily/tags/tag/civic+tech

10. http://nextcity.org/daily/tags/tag/tech

11. http://nextcity.org/daily/tags/tag/apps

12. http://nextcity.org/daily/tags/tag/new+york+times

13. http://nextcity.org/daily/tags/tag/uber

14. http://nextcity.org/daily/tags/tag/lyft

15. http://nextcity.org/daily/tags/tag/postmates

16. http://nextcity.org/daily/tags/tag/nick+bilton

17. http://nextcity.org/daily/tags/tag/sharing+ecoomy

to say, are often immigrants?

Such are the times we live in, but it seems as though funders don’t find these questions

so off-putting as to make their investments unattractive.

The Shared City[6] column is made possible with the support of The Knight Foundation[7].

Tags: shared city[8], civic tech[9], tech[10], apps[11], new york times[12], uber[13], lyft[14],

postmates[15], nick bilton[16], sharing ecoomy[17]

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