The ride-hailing organization has been attempting to extend its food-delivery business to make up for the breakdown of its essential business.
A deal for Postmates, last esteemed by investors at $2.4 billion, could support Uber’s delivery business, Uber Eats. Credit Charles Rex Arbogast/Associated Press
SAN FRANCISCO — Uber has made a takeover offer to purchase Postmates, the upstart delivery service, as per three individuals acquainted with the issue, as the on-request food delivery market merges and Uber searches for better approaches to bring in cash.
The two organizations could arrive at an arrangement as right on time as Monday evening, as per the people, who talked on the state of anonymity since they were not approved to do so publicly. The discussions are as yet going on, the individuals cautioned, and any potential for an arrangement could fall apart.
Uber is talking about purchasing Postmates for about $2.6 billion, one of the individuals said. Delegates of Postmates and Uber declined to comment on any potential arrangement talks.
A tie-up could support Uber’s delivery business, Uber Eats, and assist it with making up for the cratering of its centre ride-hailing business, which has crumbled in numerous cities as a result of the coronavirus pandemic. Food delivery isn’t profitable, yet request has soared while restaurants are shut, and individuals are remaining at home.
The deal would likewise be a lifesaver for Postmates. This nine-year-old organization was one of the previous start-ups to harness the intensity of the cell phone and the nascent “gig economy” to offer city inhabitants a courier service that could convey anything at the tap of a button.
While Postmates saw early popularity in seaside urban communities — notably Los Angeles — the organization has contended to compete with a lot bigger contenders like GrubHub, DoorDash and Uber Eats. In February, Postmates secretly filed to go public.
The category has been ready for consolidation. Uber held merger talks this year with GrubHub, a food delivery contender. Yet, those discussions fell apart after the two organizations couldn’t agree to a value, two individuals acquainted with the issue said. GrubHub was purchased eventually by Just Eats, an European food delivery service, for $7.3 billion in June.
Not long after the GrubHub deal failed to work out, Uber started to piece together a possible proposal for Postmates, one of only a handful hardly any independent American organizations in food delivery.
Postmates likewise held deal converses with GrubHub and DoorDash in the course of the most recent year, as indicated by two individuals with information on the circumstance, who declined to be distinguished because the discussions were private.
Postmates was made in 2011 by Sam Street, Bastian Lehmann and Sean Plaice, who is the CEO. It figured out how to catch the hearts of Hollywood, with supports from big names like the singer John Legend and Kylie Jenner. It even scored an investment from the entertainer Jared Leto.
Yet, Postmates, last esteemed by investors at $2.4 billion, stays a little player in a fiercely competitive market. The other enormous privately owned business, DoorDash, which investors have esteemed at $16 billion, secretly recorded to open up to the world in February.
Even though not a direct comparison since the organizations figure expenses and limits in an unexpected way, GrubHub reported $1.3 billion in revenue and Uber Eats published $1.4 billion in 2019.
Postmates and its opponents face regulatory obstacles. California, as of late passed legislation that may expect them to treat delivery drivers as employees instead of as self-employed entities. That would mean the organizations would bring to the table drivers full-time advantages, for example, medicinal services. Different states are thinking about comparable legislation.
Postmates is supporting a California voting form measure to upset the law, which is known as Assembly Bill 5.