Uber Buys Postmates for $2.65 Billion

The world of third-party delivery platforms is getting smaller.

In June, GrubHub announced it would merge with Just Eat Takeaway, a third-party delivery platform based in Europe. That agreement was struck just weeks after GrubHub and Uber failed to agree on a deal that would merge those two companies. 

Since then, Uber has turned its sights to other third-party delivery providers, hoping to bolster its own Uber Eats platform. On Monday, Uber announced it will acquire Postmates for $2.65 billion.

“Uber and Postmates have long shared a belief that platforms like ours can power much more than just food delivery—they can be a hugely important part of local commerce and communities, all the more important during crises like COVID-19. As more people and more restaurants have come to use our services, Q2 bookings on Uber Eats are up more than 100 percent year on year. 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,” said Uber CEO Dara Khosrowshahi.

Since the arrival of the COVID-19 pandemic, Uber’s ride-share service has struggled while Uber Eats has grown. With the acquisition of Postmates, Uber may be aiming to make food delivery its primary service.

This is less than welcome news for foodservice franchises, who already contend with a narrow marketplace of delivery providers offering less than competitive fee structures for merchants. As the New York Times points out, Postmates and Uber Eats already account for 37% of delivery sales in the U.S. DoorDash, the largest player, accounts for 45% and GrubHub accounts for 17%.

Read the full announcement at investor.uber.com.