Tue, May 21, 2024

Uber Bought Postmates for $2.65 Billion in Stock

Uber and food delivery business

Postmates is the fourth-largest U.S. food delivery service. The company has had success in specific urban areas of Los Angeles and Miami. Nevertheless, Postmates has struggled to compete nationally against DoorDash, GrubHub as well as Uber Eats. It is worth mentioning that, Uber eventually became the owner of its rival.

Nevertheless, even after this deal, Uber Eats will still trail behind DoorDash in the food delivery market share. This fact has a positive side as well, as thanks to this factor it will be easier to gain approval from regulators.

Uber and food-delivery service

This week, Uber, and Posmates made an important announcement. As stated above, Uber became the owner of Postmates.

Uber and coronavirus pandemic

From what they said, it is worth noting that the American multinational ride-hailing company has no intention to dismantle the Postmates app. Furthermore, this app will continue to operate supported by a more efficient, combined delivery network.

It is no secret that the coronavirus pandemic had a serious impact on Uber as demand for ride-sharing has plunged. According to the data, from Uber’s first-quarter earnings call, gross bookings revenue for its rides segment dropped by 80% in April compared to the same period of time last year. Nevertheless, the gross bookings revenue for food delivery grew by more than 50% during the period.

At one point, Uber wanted to buy a rival food delivery service called GrubHub. Nevertheless, Uber and GrubHub could not agree on a break-up fee. Moreover, the company grew frustrated with what it regarded as stalling tactics. After this, in the last month, European food delivery service JustEatTakeaway bought GrubHub.

Interestingly, Postmates had reportedly filed confidentiality for an IPO in 2019. Nevertheless, later that year, the company made the decision to delay its offering due to deteriorating market conditions and tough competition. However, the company also considered trying once again. Last but not least, in its last fundraising round in September, the company’s value stood at $2.4 billion reportedly.

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