"See you in the trenches": Uber's threat finally hits as Postmates surges to 10k deliveries a week
In early 2012, at the TechCrunch “Crunchies” awards, Bastian Lehmann approached Uber’s Travis Kalanick. Lehmann was a fan, and the two were both building transportation companies in the sharing economy. The difference: Uber transported people while Lehmann’s very young upstart, Postmates, was all about using slack courier supply to move packages around cities. One used fancy black cars; one used hipsters on bikes.
“I’m Bastian Lehmann of Postmates,” he said sticking out his hand. “Big fan.”
In true Kalanick fashion, the Uber CEO ignored the outstretched hand. Instead, a Machiavellian grin stretched across his face for a moment. Before turning on his heel and disappearing into the crowd of Crunchies hopefuls, he uttered just five words to Lehmann: See you in the trenches.
Last month, two years after his encounter with Kalanick, Lehmann was in our offices boasting about two facts.
The first one he had every right to boast about and hadn't been reported before: Postmates has reached 10,000 deliveries a week. That’s the same number of rides per week Lyft was doing when it raised its $15 million Series B. That makes little Postmates -- a company whose demo crashed and burned at TechCrunch Disrupt nearly three years ago -- suddenly the largest on-demand delivery startup, and the third largest in the entire on-demand transportation space, following Uber and Lyft. That's an intensely crowded space through which it has bobbed and weaved like so many of its couriers biking through rush hour traffic. And Postmates had achieved that milestone despite having launched in just four cities.
The second boast? His confidence that -- despite Kalanick’s threat two years ago -- Uber wasn't close to launching a courier service to rival Postmates.
Part of his logic was simply that Uber seems plenty busy with new city launches, wars with Lyft, pressures to improve background checks, and struggles to get more drivers on the system. But his confidence was rooted in an important fact: The two companies share a whopping seven investors. Investors don’t typically invest in competing companies for conflict reasons. Not only that, but Shervin Pishevar, who isn’t just an Uber investor but a deep personal friend and consigliere of Kalanick, had been given the green light to invest in Postmates by Kalanick himself. “Travis gave Shervin the OK to invest,” Lehmann told me, “At some point they may or may not get there, but I think he cares very little about what we doing.”
He also added this about that night at the Crunchies: “I think [Kalanick] is more mature now that he was two years ago. Not everything needs to be a big fight.”
As the world learned yesterday, Lehmann was wrong. All those experiments delivering kittens and puppies and flowers and BBQ weren’t just cute marketing stunts. Uber is launching UberRush, starting in Manhattan, and allowing users to request delivery of small packages for a fee of between $15-$20.
Travis Kalanick has just climbed into the delivery trenches and picked another huge fight. Game on.
While Uber’s starting price is higher than Postmates’ $5 minimum, the two services are otherwise directly competitive. And while Postmates has the first mover advantage, Uber benefits from a huge installed user base to which it can begin marketing the service.
Of course, there’s no reason why Uber and Postmates can’t share the field. As Lehmann points out, local delivery is a potentially huge business -- and one that could revolutionize ecommerce by helping brick-and-mortar retailers compete with the likes of Amazon. And Postmates couriers are mostly cyclists who don't want to chat it up with a passenger -- a different demographic than Uber's professional drivers in clean hybrids, town cars, and SUVs. But, as Lyft or Sidecar will tell you, Uber is unafraid to expand its brand to take out a competitor -- and this isn’t a company that likes to play nice.
During my conversation with Lehmann, weeks before Uber’s announcement, he explained, in emphatic terms, that he wanted Postmates’ biggest competitive edge to be how the company treats its couriers. Lehmann is German, and speaks intensely, creeping up on the edge of his chair as he speaks, and lobbing every quote with F-bombs once he gets going.
“I on-boarded at least 500 myself, and I try to be so fucking nice to them to try to understand what they are looking for," he says. "We have Facebook groups where we connect, every Postmate can come in to the office and grab a snack and hang out there. Every week is a courier social.”
Lehmann has even started to look part-courier. Gone is the more coiffed European style he displayed when he launched the company. When Lehmann showed up at our offices he had a plaid shirt, Giants hat, and a bushy hipster beard. "I thought you were delivering our sandwiches," Paul Carr joked.
While genuine, the comments about his big family of couriers were also a clear shot at Kalanick, who is famed for keeping Uber’s drivers at arm’s length, banning them from Uber’s offices and cutting them loose at a moment’s notice. It’s an approach that has made Kalanick’s company hugely profitable even as users complain about surge pricing and creepy, aggressive driver behavior.
“I don’t give a shit about money,” says Lehmann -- another shot against the fact most people know about Kalanick. “I care about having an awesome company”
Whether it happened two years ago, yesterday, or next year, this move was coming. Kalanick has always viewed his company as an algorithm-loaded transportation logistics player, even back when others saw it as little more than a town car service for the rich. Kalanick arguably did Lehmann a favor by waiting until it was the third largest transportation startup, with plenty of cash in the bank, and a following of loyal drivers who define themselves as being somewhat anti-Uber. Building an identity in between baller Uber and wacky Lyft is a challenge. Postmates has subtly done it, but it's taken two years. It's stronger than it's ever been to weather this threat.
And not only does Postmates have a nice lead, but Uber is struggling to manage growth and expand while it fights off scandals and continue to fight and woo regulators. Not to mention the battle with arch-rival Lyft will only get more intense: Lyft has just raised a $250 million mega round, finally giving it a war chest as big as Uber's. The news of Uber's new courier service may be better news for Lyft than anyone else.
None of this is to say Uber can't win in deliveries. Its biggest advantage will be the headstart in other cities, and its installed base of customers. A Postmates courier typically makes two-thirds that of an Uber driver, Lehman says. Uber won't be afraid to pad that up to get recruits.
At the end of our meeting, I make all these points, and argue that Lehman could be wrong.
Lehmann pauses and cracks an impish grin. “In that case,” he said, “I guess I’ll see him in the fucking trenches.”