• About
  • Advertise
  • Careers
  • Write for us
  • Contact
  • Terms of service
Saturday, May 28, 2022
The Millennial Source
TMS
Home WORLD

Uber to buy delivery service Postmates for $2.65 billion in stock

byAnanta Agarwal
July 6, 2020
in WORLD
Uber to buy delivery service Postmates for $2.65 billion dollars in stock

Source: News Search Engine

Share on FacebookShare on TwitterShare on Linkedin




Uber Technologies, Inc. has agreed to buy delivery service Postmates Inc. in a US$2.65 billion all-stock deal, the companies announced in a statement on Monday. 

The deal is expected to close in the first quarter of 2021, subject to the approval of Postmates stockholders and other regulatory approvals.

The deal will allow Uber to expand its meal delivery business, UberEats, which as of now only delivers meals directly from restaurants. Postmates, on the other hand, delivers a wide variety of goods such as groceries, party supplies, alcohol and pharmacy products.

Uber’s chief executive officer Dara Khosrowshahi said in the statement, “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.”

Because of the current COVID-19 pandemic, the acquisition is especially beneficial for Uber which in April saw its ride-hailing business drop by 80% compared to the same period last year. Uber’s delivery services, on the other hand, have increased by 54% in the first quarter as more people have been at home.

The companies stated that under the deal the Postmates app will run separately, “supported by a more efficient, combined merchant and delivery network.”

“The vision for us is to become an everyday service,” Khosrowshahi told Uber executives in a conference call on Monday. “Postmates is a great step along that vision. Anyplace you want to go, anything you want delivered to your home, Uber is going to be there with you, and we think these everyday frequent interactions create a habit, create a connection with customers.”

Considered to be a pioneer in the on-demand delivery service industry, Postmates has been successful in urban areas such as Los Angeles, Miami and Las Vegas, with 10 million active customers.

However, compared to other delivery services, it remains a small company, with an 8% market share in delivery sales for the month of May, according to analytics firm Second Measure.

Meanwhile, Uber, with a 22% market share in May, remains second only to DoorDash which, with a 45% market share in the same month, leads sales in the United States.

Khosrowshahi said in the conference call to Uber executives that Postmates has been able to make efficient use of technology to group together orders

“We’ve always admired Postmates, I guess, begrudgingly from afar in that it was a competitor who was able to compete aggressively and to be a leader in some very important markets with a much smaller capital base than a lot of its competition, including ourselves.”

Following the announcement on Monday, shares of Uber increased by 5% in early trading. 

Both Uber and Postmates would have a 37% combined market share of food delivery sales in the US, still behind DoorDash, according to Edison Trends, which provides e-commerce data and industry insights. 
Last month, Uber lost a deal to buy meal-delivery service Grubhub amid antitrust concerns, as an acquisition would have meant that Uber would control approximately 55% of the US meal delivery market share. Grubhub was instead acquired by Dutch company Just Eat Takeaway.

Have a tip or story? Get in touch with our reporters at [email protected]

Like TMS? Subscribe to our free daily newsletter

Related

Tags: BusinessNorth AmericaShort read
ShareTweetShare

Latest Posts

Cathay Pacific

Cathay Pacific seeks to rehire ex-staff as part of airline’s “anticipated recovery”

May 27, 2022
HSBC Indonesia

HSBC is said to be considering IPO of Indonesian business

May 27, 2022
Uvalde shooting

Texas shooting: 21 people confirmed dead; Biden says he’s “sick and tired” of US gun violence

May 26, 2022

Airbnb closing domestic operations in China to focus on outbound travel

May 24, 2022

Google to declare bankruptcy in Russia

May 19, 2022

The US SEC investigates Wall Street over use of unapproved messaging apps

May 19, 2022

India is banning wheat exports – here’s why that might be a big problem

May 17, 2022

There is a “very, very high risk” of a US recession, says Goldman Sachs Chairman Lloyd Blankfein

May 17, 2022

After 30 years of business, McDonald’s leaves Russia for good

May 17, 2022

SUBSCRIBE TO THE TMS NEWSLETTER

By providing your email, you agree to our Privacy Policy

The Millennial Source Ltd. 2021

No Result
View All Result
  • Your daily briefing
  • About us
  • Explore
    • Startups
    • Climate change
    • Tech giants
    • Crypto
    • The future of work
    • Banking giants
    • Economy
  • Lifestyle
  • TMS archives
  • Write for us
  • Contact
  • Privacy Policy & Terms

© 2022 The Millennial Source Ltd.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

We are using cookies to give you the best experience on our website.

You can find out more about which cookies we are using or switch them off in settings.

string(24) "jsonld single post debug"
The Millennial Source
Powered by  GDPR Cookie Compliance
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.