“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 press release.
“As more people and more restaurants have come to use our services, Q2 bookings on Uber Eats are up more than 100 percent year on year,” Khosrowshahi continued. “We’re thrilled to welcome Postmates to the Uber family as we innovate together to deliver better experiences for consumers, delivery people, and merchants across the country.”
Uber Eats will most likely remain second to DoorDash in the US, even after it buys Postmates.
“This is an aggressive move by Uber to take out a competitor on the Uber Eats front and further consolidate its market position, especially as the COVID-19 pandemic continues to shift more of a focus to deliveries vs. ride-sharing in the near-term,” Dan Ives, an analyst at Wedbush Securities, said in a note to clients about the deal, which is expected to close in the first quarter of 2021, pending approval from US regulatory agencies and Postmates shareholders.
On a conference call Monday, Uber said its eats business had become profitable on an EBITDA basis, an adjusted financial metric, in many markets. The combined businesses will be able to significantly cut costs, Khosrowshahi said, helping Uber reach overall profitability — something it’s never achieved. Postmates will remain a separate consumer app, and Uber declined to share any details on the company’s finances.
Uber specifically cited a strong user base of young people and millennials on Postmates that it stood to gain as part of the deal.
A slide from Uber’s presentation to shareholders about its Postmates deal.
Postmates was founded by Bastian Lehmann, Sam Street, and Sean Plaice in 2011. It serves the US and is headquartered in San Francisco.
“Over the past eight years we have been focused on a single mission: enable anyone to have anything delivered to them on-demand,” Lehmann, the company’s CEO, said in the press release.
“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. Uber and Postmates have been strong allies working together to advocate and create the best practices across our industry, especially for our couriers.”