Business

Uber wants to buy Postmates for $2.6B amid GrubHub fallout

Uber wants to buy Postmates for $2.6B amid GrubHub fallout

Uber is in talks to purchase Postmates for roughly $2.6 billion following the collapse of its takeover deal with Grubhub, according to reports.

The deal would further consolidate the food delivery industry at a time when the coronavirus pandemic has demand soaring. It would also strengthen Uber’s delivery arm, Uber Eats, which is unprofitable despite being the second-biggest player in the American market, reports say.

Uber started putting together an offer for Postmates, which was last valued at $2.4 billion, soon after its proposed $6 billion tie-up with Grubhub fell apart, the New York Times reported late Monday. Chicago-based Grubhub ended up getting bought by Dutch delivery firm Just Eat Takeaway in a $7.3 billion deal.

Uber and Postmates could announce a deal by next week if they reach one, which is not guaranteed, according to The Wall Street Journal. Neither Uber nor Postmates immediately provided comment to The Post Tuesday morning.

The takeover could reportedly give Uber a boost as the coronavirus crisis depresses demand for its core ride-hailing service. Postmates — the smallest major player in the US food delivery market — had previously discussed sales with Grubhub and rival DoorDash and was getting ready to publicize its filing for an initial public offering, according to reports.

The recent moves to consolidate the sector have raised fears among lawmakers and restaurant industry advocates about tech giants further tightening their grip on the mom-and-pop eateries that rely on their services. Delivery companies have drawn scrutiny for the steep commissions they charge restaurants, leading the New York City Council to approve a cap on commissions in May.

Uber and Postmates previously joined forces on a federal lawsuit challenging a California law that aimed to force tech companies to classify their gig workers as employees rather than independent contractors. The companies argued the law would hike their costs while limiting flexibility for their workers. California Attorney General Xavier Becerra has stood by the measure as an effort to protect workers and moved to dismiss the lawsuit.

About the author

Steve Murphy

Steve Murphy

Steve Murphy has handled various businesses throughout his career and has a deep domain knowledge. He founded Report Door in an attempt to bring the latest news to its readers. He is glued to the stock market most of the times and just loves being in touch with the developments in the business world.

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