Uber scoops up Postmates for $2.65bn

Published July 7, 2020
The acquisition allows Uver to expand into Postmates’ existing network in 4,200 US cities. — AP/File
The acquisition allows Uver to expand into Postmates’ existing network in 4,200 US cities. — AP/File

NEW YORK: Uber Technologies Inc on Monday said it would acquire Postmates Inc for $2.65 billion to expand its food delivery market share and significantly increase the business of supplying everyday goods at a time when the coronavirus has pummeled its core ride-hailing service.

The all-stock deal, still subject to regulatory approval, would give Uber a roughly 30 per cent share of the US food delivery market, trailing only rival DoorDash, which commands some 45pc, according to analytics firm Second Measure.

The ride-hailing giant said both companies’ boards have approved the deal, for which Uber currently expects to issue some 84 million shares of common stock. It offered a premium of about 10pc on Postmates’ last valuation of $2.4bn whose shares were up 5pc at $32.24.

Uber Chief Executive Dara Khosrowshahi on Monday told analysts the tie-up would allow Uber Eats to distinguish itself by delivering not only restaurant food, but everything from groceries to personal care and fashion items.

Uber has launched an option to send packages via its US ride-hailing drivers during the pandemic and teamed up with grocery stores in several countries. The acquisition allows it to expand into Postmates’ existing network in 4,200 US cities.

“The vision for us is to become an everyday service,” the Uber CEO said.

Khosrowshahi said he expects the deal to create profitability for the Uber’s Eats unit, as well as some $200m in cost saving synergies in about two years and additional efficiency gains through Uber’s smarter routing technology.

Published in Dawn, July 7th, 2020

Opinion

Lull before the storm
Updated 24 Oct 2021

Lull before the storm

It does not take rocket science to figure out why each of the two sides is taking the stand it is.
The larger debate
Updated 23 Oct 2021

The larger debate

The revelations show how the economy promotes inequality.

Editorial

Anti-government rallies
Updated 24 Oct 2021

Anti-government rallies

Banning a party because it can create a public nuisance sets a dangerous precedent which can be repeated to justify future bans.
24 Oct 2021

End of polio?

AFTER a long struggle, the reward is finally in sight. With only a single case of wild poliovirus reported this year...
24 Oct 2021

Heritage work

IT is encouraging that, slowly, projects of heritage conservation and preservation appear to be taking off. These...
A final push
Updated 23 Oct 2021

A final push

PAKISTAN’S hopes of exiting the so-called FATF grey list have been shattered once again. The global money...
23 Oct 2021

Kabul visit

FOREIGN MINISTER Shah Mahmood Qureshi’s flying visit to Kabul on Thursday is the first official high-level...
23 Oct 2021

Baqir’s blooper

THE remarks made by State Bank governor Reza Baqir at a London press conference have hit a raw nerve in Pakistan. In...