Food delivery services have been booming in the U.S. and across the world with restaurants closed due to COVID-19 restrictions. Even with all the extra business, added costs have kept many delivery companies from turning a decent profit, with some still failing to make any profit at all. For one tech giant, a timely acquisition may be just what they need to break away from the pack and begin capitalizing on a huge opportunity.
On Monday, Uber Eats announced they would be acquiring popular food delivery service Postmates for roughly $2.65 billion. The deal for the San Francisco start-up is reportedly all in stock, and while Postmates will immediately combine with Uber’s food delivery branch, they will continue to operate under their original name.
Uber’s main business of ride-hailing has taken an even bigger hit following coronavirus lockdowns across the globe. According to The New York Times, Uber reported a $2.9 billion loss during the first three months of 2020, laying off 14 percent of its workforce.
Uber Eats, however, has thrived in recent months alongside other food delivery services like Grubhub and DoorDash. The Uber division rose by 53 percent in the first quarter of the year, with bookings reportedly doubling compared to last year between April and June. Postmates also did fairly well during the first quarter of 2020, posting a revenue of $107 million with over 115,000 unique merchants.