[ghayes]

> In order not to lose money, Postmates is limiting the free deliveries to orders over $30, which make up about 50% of the orders on Postmates.

New employee here (just joined this week) -- one of the things that I find so compelling about Postmates is that it's focused on building a profitable business, without having to subsidize orders.

[mbesto]

> one of the things that I find so compelling about Postmates is that it's focused on building a profitable business, without having to subsidize orders.

So, like...ummm... a real business?

[CPLX]

Don't tell anyone but that's kind of unusual around these parts.

[joshmn]

This must be the secret sauce I keep hearing about!

[MisterBastahrd]

Well, it beats "let's build a pile of woo and then get rich people to throw money at us while we try to figure out how to make it into a business" which is common around here.

[hemantv]

You will be amazed at what our margins look like. To find out more send me your resume and I will tell you everything on your first day.

[melvinmt]

> without having to subsidize orders

If there's another market player that is willing to subsidize orders and provide the same service as you (let's call them Amazon, Google, and Uber) then commanding a profit is not feasible, so I'm not sure if that's the right thing to be chasing at this moment, as Jeff Bezos famously said: "Your margin is my opportunity".

On-demand delivery is increasingly becoming a commodity business, coupled with a labor-scarce market and big players that have more money to spend on their side project than your entire market cap.

Don't get me wrong, I love Postmates, but won't use it for a while because UberEATS is providing free delivery to me for the next 3 months - and that's the problem!

[seanplaice]

I think there is a difference between chasing profits and requiring them. Postmates is a market place and platform, for us to be successful we have to drive value to everyone that participates. That means driving value to our Postmates, customers and merchant partners. This also includes us, Postmates, as a participant of the platform.

Maintaining strong unit economics ensures that we are building the right products and operating the platform effectively. It is easy to subsidize if you have the capital but beyond just being expensive you also lose an important signal to running your platform.

Our requirement for strong unit economics has made our work harder but I do believe that it has made us make better decisions and force us to innovate instead of spend.

EDIT: This comment was made before it was edited. I would like to follow up to the edits. Specifically the Bezos mention on about margins.

There is a difference between seeking strong unit economics and profits and having them. Postmates has always had them by choice. We can choose do whatever we wish with those margins. We have regularly reduced our pricing because we have made our platform more efficient. If you were subsidizing your growth you wouldn't have the motivation or signals to identify the efficiencies.

If you are subsidizing your unit economics and your competition drops prices they are forcing you to lose more money. We prefer seek efficiencies and pass those savings on instead of just spending more money.

[a_small_island]

>If you are subsidizing your unit economics and your competition drops prices they are forcing you to lose more money. We prefer seek efficiencies and pass those savings on instead of just spending more money.

Unless by subsidizing, this company takes more market share and causes the non-subsidizer to dip into their own margin, and the race to the bottom continues.

[ssmoot]

There's enough opportunity to go around. There was 1 grocery delivery place I was aware of for us (Artizone.com) and they shut down.

Postmates doesn't even deliver to my Dallas address, despite claiming to deliver to Dallas. What they really mean (I guess) is that they'll deliver to within a 5 mile radius of down-town I guess.

That's cool and all I guess. Maybe they'll expand eventually. It was actually a surprise that this wasn't yet another SV-only delivery service on the front-page of HN.

[choward]

> without having to subsidize orders

Now stop making me subsidize your employees by encouraging me to tip.