Postmates CEO: Rival GrubHub's debacle is not a warning sign on overall food delivery business

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GrubHub's terrible earnings and more than 40% stock plunge last week is a GrubHub problem, says Postmates co-founder Bastian Lehmann.

"The right way to think about the space is not a winner take all market," Lehmann said. "You will have different brands in the space that appeal to very different customer bases, based on the merchants that they provide access to."

Taking a veiled swiped at GrubHub, Lehmann said, for example, that millennials who like Postmates may be turned off by delivery companies that cater to people over 50 years old. After reporting worse-than-expected earnings and dismal guidance on Oct. 29, shares of GrubHub plunged more than 43% in a single day, prompting an avalanche of downgrades from Wall Street firms including Bank of America Merrill Lynch and Oppenheimer. As of Wednesday's close, the stock recovered about 9% of that huge drop, but GrubHub has still lost more than half of its market value this year alone.

"We had a window earlier in the year, but, you know, after somewhat lukewarm reception of tech companies, specifically after WeWork and their losses, I think we're ready to go when we feel that the market conditions are right," Lehmann said. "We have the time to figure out when we want to go out." Looking at the arch of the third-party food delivery business through GrubHub's spectacular rise and fall on Wall Street, the stock went public in 2014 at $26 per share. It rose to all-time highs around $145 in August 2018. But it's been on a rather steady decline since then, dropping about 75% as of Wednesday close of $36.14 per share.

 

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