Skip to main content

Uber to acquire Postmates for $2.65 billion

 

Uber has agreed to acquire food-delivery company Postmates, following rumors about a possible sale circulating over the weekend. The move leaves Uber with a large share of the food delivery market, uniting two of the largest food delivery companies — Uber Eats and Postmates — under one banner.

Uber failed in its plans to purchase fellow delivery company Grubhub earlier this year due to apparent regulatory concerns. Instead, it has agreed to purchase Postmates for $2.65 billion in an all-stock transaction, issuing approximately 84 million shares in return for 100% of the equity of Postmates.

Recommended Videos

“Over the past eight years we have been focused on a single mission: enable anyone to have anything delivered to them on-demand,” Postmates co-founder and CEO Bastian Lehmann said in a statement. “Joining forces with Uber will continue that mission as we continue to build Postmates while creating an even stronger platform that brings this mission to life for our customers.”

Please enable Javascript to view this content

The move comes at a crucial time for Uber, which reported $2.9 billion in losses in the first quarter of 2020, with rides dropping substantially in the wake of the coronavirus pandemic. The company laid off 3,700 employees recently and has branched into more delivery services to compensate for ride losses.

Uber Eats grew 54% year-over-year according to the same report, bolstered by a restaurant industry forced to shift to takeout while coronavirus lockdowns remain in place.

Although lockdown restrictions have eased across the United States, it’s unclear if restaurants will see a return to regular dine-in numbers any time soon. Many cities and states still require restaurants to limit the number of customers in the building and to space them out, and millions of Americans may remain uncomfortable dining out until the pandemic is fully under control, something that might not happen until next year.

The acquisition might give Uber an edge over its biggest rival, DoorDash, which controlled about 35% of the food delivery market in late 2019.

For consumers, the most notable effect could be a rise in fees. A 2016 paper studying the effects of mergers and acquisitions found “evidence that M&As increase markups on average across U.S. manufacturing industries, but … little evidence for channels often mentioned as potential sources of productivity and efficiency gains,” so those fees you see tacked on to your Postmates bill might jump.

The sale could also pose a problem for restaurants. With the decline in dine-in sales, restaurants without their own delivery infrastructure are forced to turn to services such as Uber Eats and Postmates, losing a chunk of their sales to the commission those services charge.

Georgina Torbet
Georgina has been the space writer at Digital Trends space writer for six years, covering human space exploration, planetary…
Google has some ‘good ideas’ for putting ads in Gemini
Gemini Advanced on the Google Pixel 9 Pro Fold.

Google is exploring adding ads to Gemini AI. CEO Sundar Pichai floated the idea in an earnings call but did not mention a specific date, according to The Verge. He also noted that the company has "very good ideas" about how it could appear in the future.

This year's focus remains on enhancing user experience features and broadening subscription offerings. Pichai noted that advertising has been essential in scaling other Google services, such as YouTube, possibly hinting that ads will eventually come to Gemini. However, Pichai did not mention how Google plans to integrate ads into Gemini when they appear in the AI. He also said they are committed to making the products work and delivering them to a vast audience.

Read more
iPhone 7 owners are getting $200 in class action lawsuit, and here’s how you can track yours
iPhone 7 and iPhone 7 Plus.

Settlement payout from the iPhone 7 class action lawsuit against Apple are starting to roll out. Those who participated in the class action lawsuit have started to receive payments, with amounts varying based on whether you spent any money on repairing the iPhone 7 or the iPhone 7 Plus.

Some of the co-applicants in the lawsuit have started to receive around $200 as part payment from the $35 million settlement, 9to5Mac reported. While the payout is less than the maximum of $350 initially approved by the court, it should still feel satisfactory to the appellants.

Read more
The EU is cracking down on labels in Windows 11’s Start menu
The Surface Pro 11 on a white table in front of a window.

To align with the EU's Digital Markets Act (DMA), Microsoft is updating Windows 11's Start Menu Search, but only for users in the European Economic Area, as Tech Radar reports. The software giant is introducing more transparent labels to distinguish between web search results and local ones. This move is part of broader changes that let users uninstall Edge and turn off Bing integration, reinforcing transparency and user choice.

The changes are in a new Windows 11 Insider Preview Build, build 27764. Notably, X user @alex290292 shared a screenshot that shows the new Start menu user interface with the "Windows" and "Web search from Bing" sections. These changes are great news since they give users more control over Windows 11. Specifically, the modifications include adding custom web search providers to Windows Search, letting users remove the Edge browser, and turning off Bing web search.

Read more