Uber acquires rival postmates for $2.65 billion in all equity deals failing to get Grubhub.
Last month, Uber tried and failed to acquire Grubhub, a leading competitor in the food delivery market. But the heartbeat did not last long. On Monday, Uber announced it would acquire rival Postmates for $2.65 billion in an all-stock deal.
Why does Uber focus on food delivery?
Most consumers know the Uber as a ride-hailing app. But during the Coronavirus, Uber’s primary service has dried up. Amid government restrictions and general uncertainty about sitting in a stranger’s car amid global epidemics, the demand for ride-hailing has been minimal since Uber began in early 2010.
Fortunately, the company has already launched Uber Eats, a secondary service.
As the demand for ride-hailing has decreased, the demand for food supplies has only increased. Amid the epidemic, restaurants that are unable to accommodate customers are forced to feed their hungry hosts. But Uber Eats is not without competition. The food supply field is already very crowded.
As a result, rival companies have to keep prices relatively low to remain competitive.
What are Postmates?
Postmates provides distribution in thousands of US cities in Los Angeles, Las Vegas, San Diego and Phoenix. This is one of the few players on the field, as some consider it a pioneer in the field of need.
In May, Postmates made up only 8% of national food delivery sales.
Uber CEO, Dara Khosrowshahi, said he has always admired Postmates for “begging from afar. He was able to compete aggressively because it was a competitor.” He called the start-up “a leader in some of the most important markets with a smaller capital base than its competitors, including us.”
Although subject to regulatory approval, the acquisition is expected to close in the first quarter of 2021. As of Monday morning, shares of Uber were up 5%.
The acquisition will be concluded in the first quarter of 2021, although subject to regulatory approval.
