Uber has reportedly made an offer to buy food delivery service Postmates, according to The New York Times.
According to the Times, the talks are still ongoing and the deal could fall through.
For those who have been paying attention to Uber, this appetite is not new, albeit consistent. A little over a month ago, the ride-hailing company was reportedly pursuing an acquisition of Grubhub, another food delivery company. Grubhub was ultimately acquired by Just Eat Takeaway in a $7.3 billion deal, but only after the deal with Uber fell through over a variety of concerns.
The food delivery market is set to benefit largely from the COVID-19 pandemic, as stores remain shuttered or switch operations to takeout only. The latest earnings from the public ride-hailing company show that its ride-hailing business is slowing while its food delivery service is growing like hell. Gross bookings for Uber Eats last quarter were $4.68 billion.
So even though Uber still loses a ton of money ($2.94 billion including all costs), its Uber Eats growth is staggering. And the green shoots might be fueling some of this interest in other competitors.
If regulatory concerns were an issue, Postmates may make a better fit.
With a valuation of $2.4 billion, Postmates is significantly smaller than Grubhub. And while the company filed to go public nearly 16 months ago, it held off eventually citing “choppy market” conditions.
So if Uber Eats and Postmates combined, the result would still be smaller than Doordash’s market hold, but would be competitive nonetheless. DoorDash, last valued at $13 billion, confidentially filed for an IPO nearly four months ago.
Also, Postmates delivers more than just food.
If the merger goes through, the food delivery race would get refueled in an interesting way: Uber Eats and Postmates versus Grubhub and Takeaway versus DoorDash.
Postmates declined to comment on rumors or speculation. Uber did not immediately respond to a request for comment.