You know Uber. You know Postmates. But now, the popular ride-sharing company has officially acquired the delivery app.
Originally announced last July, Uber Technologies set out to buy Postmates for $2.65 Billion in stock. At first, the company worked to buy another food delivery rival, GrubHub. However, the deal fell through since they could not work to determine a break-up fee, and Uber felt like GrubHub was stalling.
The deal closed in December and Uber now owns the San Francisco-based company, saying that their new partnership will “create an even stronger delivery marketplace.”
But how does that work in regards to Postmates and Uber’s own food delivery service, Uber Eats?
In a press release, Uber explained that acquiring Postmates helps in the sense that it focuses on different geographical areas than Uber Eats does; additionally, Postmates established good relationships with small and medium sized businesses, as well as local restaurants.
The two apps will continue to operate independently from one another and focus on their own branding, but they’ll merge some back-end operations such as drivers.
Uber CEO Dara Khosrowshahi said that the two apps also share similar beliefs in terms of positive impact.
“Uber and Postmates have long shared a belief that platforms like ours can power much more than just food delivery,” she said. “They can be a hugely important part of local commerce and communities, all the more important during crises like COVID-19 … We’re thrilled to welcome Postmates to the Uber family as we innovate together to deliver better experiences for consumers, delivery people, and merchants across the country.
Looking at Numbers
At the time of the initial announcement, Uber estimated that it would issue approximately 84 million shares of common stock for 100% of the fully diluted equity of Postmates.
Edison Trends reported that Uber Eats also trailed behind another food delivery service, DoorDash. When it looked at all services from last June, prior to the news, DoorDash took 45 percent of all transactions; Uber Eats stood in second place at 28 percent. With Uber Eats and Postmates combined, their combined market share would boost to around 35%.
The merge should help Uber a great deal, especially as the service wants to bounce back from its losses due to the COVID-19 pandemic. When news of Uber buying Postmates first came around, ride-share usage was down 80 percent from the previous year. But the company believes that as restaurants stay closed and limit those who want to dine-in, more will turn to take-out and delivery.
With Postmates now part of the Uber family, the company also plans to launch a “regional listening exercise” this year to help further connect with restaurants and merchants; this will serve as a time for them to ask questions and for Uber to hear out concerns.