Tech

Insiders Reveal Uber Trying to Buy Out Postmates! Could They Be Threatened?

By Urian , Jun 29, 2020 09:52 PM EDT

Just recently, Uber has decided to make a takeover offer to purchase Postmates, the new upstart delivery service, this is according to three different people familiar with the ongoing matter. This purchase is done as the current on-demand food delivery market grows and Uber is currently looking for brand new ways to make some money.

Both companies could come to a deal as early as Monday evening, according to certain people, who spoke only on the condition of anonymity due to lacking the authorization to do this publicly. The talks are currently going on, the people have cautioned, and any particular potential for this deal could still fall apart.

Uber buys Postmates?

The representatives of both Uber and Postmates still declined to give a comment on any potential deal talks.

A certain tie-up could definitely bolster Uber's own delivery business, Uber Eats, in order to help it compensate for the whole catering of its core ride-hailing business, which currently has collapsed in a number of cities due to the ongoing coronavirus pandemic.

Food delivery is still not profitable, but the demand has definitely increased as the restaurants remain closed and people remain stuck inside.

The deal could also be a sort of lifeline for Postmates, a company of nine years that was one of the other earlier start-ups to be able to harness the true power of the smartphone and also the nascent "gig economy" in order to offer city dwellers the courier service that could make everything convenient with a tap of a button.

The value of this takeover remained unknown until Monday evening.

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Postmates' "almost" acquisitions

Although Postmates saw the early popularity in the coastal cities, especially within Los Angeles, the company has still struggled to compete with its much larger competitors just like DoorDash, GrubHub, and also Uber Eats. In February, Postmates also confidentially filed for it to go public.

The category has definitely been ripe for consolidation. Uber has been able to hold its merger talks this year with companies like GrubHub, a particular food delivery competitor. But those talks eventually fell apart after both of the companies were not able to reach an agreement on the price.

GrubHub was eventually purchased by another company Just Eats, which is a European food delivery service. The company was bought at $7.3 billion back in June. The value of the takeover offer was not clear Monday evening.

Quite shortly after the whole GrubHub deal fell through, Uber then began to piece together a new potential offer for Postmates, which is one of the few stand-alone and completely American companies in the food delivery industry.

According to the informants, Postmates previously held talks as well with DoorDash and GrubHub sometime over the last year but decided to be unidentified because the talks were done in private.

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