Uber finally got its food delivery company by acquiring the food delivery start-up Postmates for $2.65 billion following the failure of buying Grubhub.
Postmates will continue to operate under its own name but it will be merged with merchant and delivery system joined with Uber Eats.
According to Uber, this will increase the restaurant options to the customers and a more efficient delivery system for the riders who pick up numerous orders at a time. The deal will be completed in the first quarter of 2021.
Before Postmates, earlier this year Uber was interested in buying Grubhub but the deal did not go through due to antitrust scrutiny, and Grubhub was sold in June to European food delivery company Just Eat Takeaway for $7.3 billion.
Since the start of the coronavirus, the hotels and restaurants were closed for dine-in but their delivery service surged. Similarly, the company’s company’s core ride-hailing service performed badly during the pandemic.
Uber is hoping with the restaurant being closed people will order their food through the online channel. As validated by the fact that in May revenue for Uber Eats rose by 53 percent.
In the month of May, the company posted a $2.9 billion loss for the first three months of the year, which is an 80 percent decline and Uber will continue to get affected this as there are many areas that still have a high number of coronavirus patients.
Market Share of Uber after Postmates
While Uber Eat is definitely a great choice but it faced massive competition from DoorDash and Grubhub. Uber Eats saw an 89 percent increase during the lockdown period but still lagging behind the market leader DoorDash.
In the month of June DoorDash covered 45 percent of the food delivery market. After the completion of the acquisition, Postmates and Uber Eats would control around 37 percent of US food delivery sales. Currently, Uber Eats makes 29 percent of the market.
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