Uber is extending its market reach in the booming food delivery segment with the $2.65 billion acquisition of San Francisco’s Postmates.
Prior to the all-stock transaction, Postmates was a direct competitor of the Uber Eats food delivery platform. Following the deal, Postmates will continue to operate as its own app.
Although coronavirus has led to a spike in food deliveries – with Q2 bookings on Uber Eats up more than 100% year on year – the pandemic has resulted in the company’s flagship ride-hailing businesses suffering a downturn.
It’s therefore unsurprising that, after significantly reducing customer support for its ride-hailing business, it would look to bolster its food delivery arm.
Uber said that the addition of Postmates boasts differentiated geographic focus areas and customer demographics, as well as “strong relationships with small- and medium-sized restaurants, particularly local favourites.”
“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,” said Uber CEO Dara Khosrowshahi.
Bastian Lehmann, Postmates co-founder and CEO, added: “Over the past eight years we have been focused on a single mission: enable anyone to have anything delivered to them on-demand.
“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.
“Uber and Postmates have been strong allies working together to advocate and create the best practices across our industry, especially for our couriers.
“Together we can ensure that as our industry continues to grow, it will do so for the benefit of everyone in the communities we serve.”