Uber Technologies remains bullish on the food delivery market as its passenger ride business continues to struggle.
Uber has agreed to buy major rival Postmates Inc for $2.65 billion in an all-stock deal to expand its food delivery footprint further across the US.
"Postmates is highly complementary to Uber Eats, with differentiated geographic focus areas and customer demographics, and Postmates’ strong relationships with small- and medium-sized restaurants," Uber said.
Postmates co-founder Bastian Lehmann will stay on to help manage the business while Uber’s food-delivery chief Pierre-Dimitri Gore-Coty wuill oversee the combined business.
Uber plans to keep the Postmates app as a separate business which will be supported by a more effecient combined merchant and delivery network.
Uber recently had its eye on GrubHub, but a multi-billion dollar deal fell through.
Postmates has a 8% market share of food delivery in the US, accounting for about five million deliveries a month, based on pre-Covid-19 data.
Since the pandemic Uber Eats has seen revenue surge by more than 50%.
Like Uber, Postmates is San Francisco based.
