Uber Completes Its $2.65 Billion Purchase of Postmates

The all-stock deal will see Postmates' apps and branding live on.

By Daniel Cooper

CHRIS DELMAS | Getty Images via Engadget

This story originally appeared on Engadget

Uber has completed its $2.65 billion purchase of food-and-grocery delivery service Postmates, the company has announced. The deal sees the two companies creating the second largest delivery platform in the US by size, dwarfed only by Doordash.

In a statement, Uber committed to keeping Postmates as a separate, consumer-facing brand, while integrating its back-end into Uber Eats' platform. And both companies would work to ensure that they can "strengthen the delivery of food, groceries, essentials and other goods."

The all-stock deal was prompted, in part, by the collapse of Uber's ride-hailing business in the wake of the COVID-19 pandemic. Postmates' "beloved" brand is also stronger than Uber in a number of areas, including LA and the south west.

Uber's purchase of Postmates, while approved by regulators, may cause some nervousness in the drivers and restaurants that use the service. Eater, earlier this summer, said that the deal will "condense the number of delivery app options to three," reducing people's ability to take their business elsewhere.

It doesn't help that Uber has used its resources to help rob its drivers of key employment protections, such as in California. It spent big to push through Proposition 22, which removed basic rights like mandatory sick leave, overtime payment and expense reimbursements.

The law was also drafted to ensure that future administrations would struggle to overturn it without a supermajority in the California legislature. Politico reports that Uber CEO Dara Khosrowshahi has said that the company will work to push similar law changes in other states in future.

Uber's focus on its grocery and food delivery business comes as it became the one positive in an otherwise bad year. With lockdowns and shelter-in-place orders in effect across the world, the need for a ride-hailing business greatly diminished.

In its most recent financial report, the company said that while its mobility division saw revenue fall by around 53 percent, its Uber Eats arm saw a 125 percent increase. It's plausible that it'll double down on investments in this region in future to help bolster its business while mobility remains in pandemic-enforced flux.

Daniel Cooper
After training to be an intellectual property lawyer, Dan Cooper abandoned a promising career in financial services to sit at home and play with gadgets. He now serves as Engadget's associate European editor.

Related Topics

Editor's Pick

Have More Responsibilities at Work, But No Pay Bump? Use This Script to Get the Raise You Deserve.
Black and Asian Founders Face Opposition at All Levels — Here's Why That Has to Change
Personal Finance

8 Fun and Fulfilling Ways to Retire by Age 50

Early retirement is a real option that more people are pursuing. You can do this if you are willing to work hard.

Thought Leaders

5 Small Daily Habits Self-Made Millionaires Use to Grow Their Wealth

We've all seen what self-made millionaires look like on TV, but it's a lot more subtle than that. Brian Tracy researched what small daily habits these successful entrepreneurs adopted on their journey from rags to riches.

Living

Invest in Yourself: 10 Things Every Working Woman Should Do This Year

When striving for success, it is easy to forget about your mental and physical health. But without health, you cannot fully succeed. Follow these ten lifestyle strategies for success in your personal and professional life.

Marketing

6 Ways to Wring All the Value from Your Earned Media Coverage

Press coverage can help your brand gain visibility and increase credibility — but not if no one sees it. What can you do to get more value from the media placements you've worked so hard to earn?

Growing a Business

The Best Way to Run a Business Meeting

All too often, meetings run longer than they should and fail to keep attendees engaged. Here's how to run a meeting the right way.