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Uber to Buy Postmates for $2.65 Billion

  • July 06, 2020

Food delivery apps, which connect drivers, restaurants and customers, have grown quickly in recent years, fueled by venture capital and armies of contract workers. But the services they offer are not very different from one another, leading to heavy competition and pressure to keep fees low. While more people have been using delivery services during the pandemic, profits have been elusive.

As a result, delivery app companies have circled one another, aiming to make deals to gain scale. Postmates previously discussed possible deals with DoorDash, the largest service in the United States, and another rival, GrubHub, according to two people with knowledge of the talks.

In recent months, Uber also discussed buying GrubHub. But last month, GrubHub was instead sold to Just Eat Takeaway, a European delivery company, for $7.3 billion.

Together, Postmates and Uber Eats would have a 37 percent share of food delivery sales in the United States, according to Edison Trends, which tracks credit card spending. DoorDash would remain the largest player with 45 percent, while GrubHub would have 17 percent.

Uber is looking for growth as more people stay home during the pandemic and its core ride-hailing business has struggled. In May, Uber posted a $2.9 billion loss for the first three months of the year and announced it was laying off 14 percent of its work force. But revenue for its Uber Eats division rose 53 percent.

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