Uber Technologies, in a move to mitigate the losses of its ride-hailing business during the coronavirus pandemic, has agreed to purchase food delivery platform Postmates.
April reportedly saw an 80% drop in Uber’s ride volume, while Uber Eats saw a 52% rise in orders year-on-year for Q1.
Should it go ahead, the acquisition will see the merging of two of the largest online food delivery services in the US.
This would represent a significant threat to the business of competitors such as Grubhub and Doordash.
The Uber-Postmates deal has been agreed upon for a price of $2.65 billion in stock.
This comes amid the coronavirus pandemic which has seen sit-in dining establishments reduced to delivery-only services.
According to The Freedonia Group’s National Online Consumer Survey conducted in May 2020, 30% of adults were using restaurant delivery more because of the coronavirus pandemic.
Jennifer Mapes-Christ, consumer and commercial group leader for the Freedonia Group, commented: “This combination of Uber and Postmates will enable the two companies to expand to a more comprehensive delivery service, as both are working to build networks to deliver groceries and other essentials.”