A half-dozen American food-delivery companies are battling for dominance.
Consolidation seems inevitable. The US doesn’t need so many venture-backed companies in an industry defined by low margins, similar services, and fickle customer loyalty. And yet no end has appeared in sight.
But Recode has learned that one of the most prominent of these startups, Postmates, has explored a sale instead of becoming a standalone public company, which it announced plans to do so in February.
Why does this matter? Well, an acquisition could affect the prices that Americans pay for food delivery. On one hand, it could allow for dominant players like UberEats to achieve cost savings that would make your dinner cheaper. Or maybe it would remove needed competition and allow middlemen to raise your prices.
It could also shape the reinvigorated conversation around labor rights in Silicon Valley. Delivery startups like Postmates have drawn recent criticism for their relationships with couriers, who deliver more than food and technically are contractors rather than employees. That classification has been criticized by workers’ right groups because it deprives them of certain benefits that full-time employees enjoy. If Postmates sold to a competitor like DoorDash or Uber, both with their own controversial workers’ practices, the situation for their workforce of contractors might get worse rather than better.