Uber Technologies Inc. announced this morning that its board of directors has agreed to buy one of its competitors in the meal delivery space, Postmates. The transaction is valued at approximately $2.65 billion. Uber’s CEO Dara Khosrowshahi said the following about the acquisition:
“Uber and Postmates have long shared a belief that platforms like ours can power much more than just food delivery—they can be a hugely important part of local commerce and communities, all the more important during crises like COVID-19. As more people and more restaurants have come to use our services, Q2 bookings on Uber Eats are up more than 100 percent year on year. We’re thrilled to welcome Postmates to the Uber family as we innovate together to deliver better experiences for consumers, delivery people, and merchants across the country.”
Before the deal with Uber, Postmates was looking to go public, confidentially filing for an initial public offering (IPO) in February. The IPO fell apart due to the Covid-19 pandemic. Even though the acquisition of Postmates strengthens Uber's delivery business, it still faces fierce competition from Grubhub and DoorDash. These 2 competitors have combined over 60% market share in the food delivery business.