3 Things You Need to Know About ‘Last-Mile’ Struggles and Gains

After months of speculation, Uber revealed in July that it had acquired on-demand delivery platform Postmates in a $2.65 billion deal. The news comes as another industry player, same-day delivery service Deliv, winds down operations after an eight-year stint.

Deliv, currently in the process of selling technology assets to Target, has raised over $80 million in venture capital funding. The company’s aggressive focus on enterprise deals – $5 deliveries from thousands of retail stores – made cost optimization challenging. Low-priced, high-volume, and low-density delivery commitments can make cost minimization difficult and erode profits.

Postmates reached a $2.4 billion valuation last year after raising $225 million in new capital. From being a ‘jack of all trades’, even offering IKEA and DIY product deliveries at one point, the company sharpened its market focus, joining forces with small food business merchants. However, despite having a headstart in a crowded market, Postmates has struggled to become a leader in food delivery.

Will Uber’s takeover will save Postmates? Will the food delivery company’s 10% market share make a big difference to both companies’ unit economics? It’s wait and watch for now.

Perhaps the player to benefit from Deliv’s fall and Postmates’ shaky state is B2B delivery company Rapidus, which has been flying under the radar since 2016. It has expanded to four states and found its sweet spot as the ‘best cost-effective local delivery solution’ by offering a multi-sided marketplace connecting business shippers in the medical, construction, engineering, retail, commerce, and other sectors, with delivery partners, which include both professional independent operators and courier companies.

The company has been growing its team size in an effort to onboard a new wave of SMB and mid sector customers. Last month, the company announced a partnership with Shopify to offer ‘multi-agency certified delivery partners, transparency, and a low-priced experience’.

deliv is shutting down
Contact-less delivery by Rapidus

Rapidus is steadily capturing the largely segmented and longtail market of professional courier delivery through technology, marketplace economy, and the elimination of middlemen: dispatchers, operators, and margin-eaters. The company looks poised to supersede established players and is one to track in the on-demand delivery space.