Uber has agreed to a $2.65 billion takeover of food delivery competitor Postmates, the company said in a statement Monday.
“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,” Uber CEO Dara Khosrowshahi said in a statement.
The two delivery services, which compete with other apps such as Grubhub and DoorDash, are hoping to bolster their presence in the market as coronavirus continues to keep people indoors. Delivery orders increased by over 67% in March, when the pandemic began to shut down much of the country, according to CNBC.
Postmates has a presence in thousands of U.S. cities and millions of active customers that order delivery from more trendy brands, according to CNN.
There will not be a merging of the two apps, with Uber planning to “keep the consumer-facing Postmates app running separately, supported by a more efficient, combined merchant and delivery network,” the company statement said. Postmates was founded in 2011 as one of the first restaurant delivery apps but is now ranked 4th among major apps in the industry, Bloomberg reported.
The combined power of Uber and Postmates accounts for 30% of meal delivery monthly sales, according to analytics company Second Measure. Both companies have discussed a deal for over 4 years, but nothing materialized until last week when Uber finally approached with a sufficient offer, according to Bloomberg.
The current delivery app leader will continue to be DoorDash, which Second Measure reported accounts for 45% of monthly meal delivery sales.
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