Uber Acquires Postmates’ Food Delivery Business for a Whopping $2.65 Billion

As Uber marks its territory in the US food delivery market, brands could see competition intensifying in the days to come.

Multinational ride-hailing giant Uber has agreed to acquire Postmates, America’s leading food and grocery delivery provider, for a whopping $2.65 billion. The all-stock deal, subject to regulatory approval, would give Uber roughly 30 percent share of the US food delivery market, according to analytics firm Second Measure.

Postmates is an on-demand delivery service that allows users to request deliveries of all types, including food, groceries, and alcohol from local stores and restaurants. The company operates in about 2,940 US cities. Postmates currently stands fourth in the US on-demand delivery market, with competitors like Caviar, Freshly, DoorDash, Deliveroo, GrubHub, and Instacart in the play.

Uber’s Postmates acquisition is expected to increase its world’s food delivery market share. Uber and Postmates were reportedly having discussions about the deal on and off for about four years, but the talks accelerated after Uber recently approached the latter. Both company’s boards have approved the deal, for which Uber currently expects to issue about 84 million shares of common stock.

However, this does not change much for consumers. Uber said that it plans to keep the Postmates app running separately, supported by a more efficient, combined merchant and delivery network. Uber also plans to leverage its marketplace technology, including routing, dispatching, and dynamic pricing, to improve Postmates’ last-mile delivery operations.

The pandemic is dramatically transforming food, groceries, and restaurant supply chains, bringing a whole new dimension of convenience into the picture. As more and more consumers seek professional and on-demand hyperlocal delivery of groceries, fresh fruits, veg, readymade food, and even alcohol, big brands like Uber are making the most of this opportunity to grab a larger share in the market.

Needless to say, businesses in the food and grocery delivery and hyperlocal markets must brace themselves for the heavy competition from bigger brands like Uber in the future. The biggest market success driver is excellent customer service, which can be achieved quickly, on time, and professionally.

The pandemic may drift away, but the impact it is causing on consumer buying behavior will linger around for a long time now. Efficient doorstep delivery is more critical than ever before now, and brands cannot overlook the importance of tech-based logistics in achieving desired last-mile efficiencies.

Locus offers AI-driven tech solutions to enterprises in the hyperlocal delivery market for efficient logistics management. Click here for a free demo.