AmazonFresh and Instacart Have A New Competitor: Postmates

November 8, 2017, 3:48 PM UTC
Close-up of sign for the popular app-based food and supplies deliver service Postmates, in the Gourmet Ghetto (North Shattuck) neighborhood of Berkeley, California, October 6, 2017. (Photo by Smith Collection/Gado/Getty Images)
Smith Collection/Gado/Getty Images

Postmates wants to deliver your groceries, and it’s not being shy about its intentions to go head-to-head with Amazon Fresh or Instacart.

The San Francisco-based logistics and delivery startup announced Postmates Fresh, putting it in more direct competition with AmazonFresh and Instacart. The service launched in Manhattan, Los Angeles, and San Francisco on Tuesday, boasting an average wait of 30 minutes to get your order — a shorter time than the two or three-hour windows offered by competitors.


The catch? Offerings from Postmates are more limited than AmazonFresh or Instacart and the faster service comes with higher prices. This may not be a problem, though, since the Postmates customer base tends to include users with higher incomes.

The company wants customers to think of Postmates Fresh “like an on-demand Farmer’s Market,” and so asking affluent users to pay a little more for locally-sourced, high-quality groceries seems like a natural next step.

Postmates has partnered with FarmStead in San Francisco, East Village Farm in New York City, and Urban Radish in Downtown Los Angeles to provide locally-grown produce for its new service.

There are already signs that the Postmates Fresh business model, centered on big cities and high earners, may be more viable than the challenge of bringing on-demand groceries to suburban and rural areas. Last week AmazonFresh cut back its deliveries in five states.

Meanwhile, Instacart been busy itself. The company raised $400 million in series D funding in March and continues to partner with new retailers, including Whole Foods, Target, Costco and Safeway, while insisting that the Amazon acquisition of Whole Foods is a “blessing in disguise.”