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DoorDash and Postmates Discussed Merger

Food-delivery apps DoorDash and Postmates previously discussed merging, per Recode. It sounds like a case of “1+1=1,” as dealmakers might say. That is, not a game-changer. Like with some other on-demand services, it’s been difficult to understand how much value DoorDash and Postmates create for customers (have you ever ordered food from one of them and not been surprised by the fees they impose?). The question is whether their business models will last, given how expensive it is to recruit delivery drivers compared to other driver-dependent services. What fundamental inefficiencies do these apps solve? Apparently enough for DoorDash to get a $500 million-plus financing round led by SoftBank earlier this year. Until we see DoorDash’s detailed financials, it will be hard to think it can capture greater share of the growing delivery market than, say, UberEats, which appears to have some structural advantages.

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