Uber cuts 3 000 more jobs, closes 45 offices
Postmates, a startup specializing in delivery of food, groceries and other goods, will be integrated into Uber Eats, which has seen its business double during the global health crisis.
The San Francisco rideshare giant made an unsuccessful US$6 billion bid for Grubhub, which ended up merging with Dutch-based Just Eat Takeway.
Postmates holds about 8% of the US food delivery market, making it the number four operator behind DoorDash (45%), Grubhub (23%) and Uber Eats (22%), according to the research firm Second Measure.
San Francisco-based Postmates, which reportedly had been on track for a public share offering this year, has also been testing robot delivery, tieing in with Uber's efforts to develop autonomous technology.
"Clearly this is an aggressive move by Uber to take out a competitor on the Uber Eats front and further consolidate its market position, especially as the COVID-19 pandemic continues to shift more of a focus to deliveries vs. ride-sharing in the near-term," said analyst Daniel Ives of Wedbush Securities.
Ives called the deal "both a defensive and offensive acquisition in the food delivery space for Uber at a time with its core ridesharing business seeing massive headwinds in this COVID-19 pandemic."
Independent analyst and investor Benedict Evans said that in the low-margin food delivery business "reducing capacity and bolting customer pools together (hence paying in stock) instead of fighting for them has obvious logic," but added: "You still need the underlying unit economics to work."
The companies said the boards of both firms approved the transaction, and that they expect to close the deal pending regulatory approval early next year.
Postmates co-founder and CEO Bastian Lehmann said the tie-up would create a stronger player in the delivery segment.
"Over the past eight years we have been focused on a single mission: enable anyone to have anything delivered to them on-demand," he said.
"Joining forces with Uber will continue that mission as we continue to build Postmates while creating an even stronger platform that brings this mission to life for our customers."