Uber Technologies, the rideshare company founded in 2009 in San Francisco as UberCab, launched Uber Eats in 2014. The gig-style delivery platform launched in Santa Monica, California, and spread to most major cities in North America and Europe by 2018, working via contracts with restaurants.
Postmates works in a similar manner, though without contracts. Drivers are hired on a per-case basis to deliver orders from restaurants, grocery stores, or other retail. Postmates was founded in 2011, also in San Francisco, and has been in direct competition with UberEats since its launch, with both lagging slightly behind delivery giant DoorDash.
As of early last year, Postmates was planning to acquire a fourth competitor, GrubHub, and go public in the same motion. But their bid for the company lost to the European company Just Eat Takeaway, which scooped up GrubHub for a mere $7.3 billion. The loss has changed plans all across the industry, dramatically. Now,instead of growing to dominate the field, Postmates will be bought by UberEats in a $2.65 billion all-stock takeover, informally announced on Monday, July 6th. It will continue to be managed by its current executive branch, remaining as a separate service under the Uber umbrella.
The rideshare part of Uber’s business has been hit critically hard by the pandemic crisis, reporting their first-ever decline in revenue in the first quarter of this year after an April that saw an 80% decline in business. But UberEats saw a 52% increase in bookings, and Postmates saw similar numbers. The company likely sees this move as a strong investment in the most profitable like of their services, as well as eliminating their closest rival. Together, the two companies are considered likely to move to the head of the back, trumping DoorDash neatly.
Both companies have as yet declined to comment on the takeover, but the news has been put out by reliable channels.
Source: Bloomberg
Editorial credit: Piotr Swat / Shutterstock.com
