Doordash Inc. and Grubhub (recently acquired by Netherlands-based Just Eat Takeaway for $7.3 billion) have been vying to be the No. 1 third-party delivery service in the United States. The third horse in the race, Uber Technologies Inc., was also interested in GrubHub but there were antitrust questions. That didn’t leave Uber with many options to get quick growth while capitalizing on the demand for food service delivery during the COVID-19 pandemic.
Enter Postmates, the food delivery startup which raised $225 million in September at a $2.4 billion valuation, and reportedly held deal talks with GrubHub and DoorDash. With Uber paying $2.65 billion for the unicorn, Uber Eats now has a chance to bulk up its revenue. The New York Times notes food delivery apps offer very similar services, leading to heavy competition and pressure to keep fees low; and while more people have been using delivery services during the pandemic, profits have been elusive.
How this plays out for the drivers remains to be seen.
— Baz Hiralal contributed to this report.