Will Postmates accept a proposal from Uber?

by | Jul 1, 2020

(Photo courtesy brandinglosangeles.com)

Back in June, Uber had been talking with food delivery service Grubhub about a potential merger. But before Uber and Grubhub could make their relationship official, Just Eat swooped in and swept Grubhub off its feet.

Now, Uber is looking for a rebound. It has set its sights on Postmates, offering to buy the food delivery company for $2.6 billion.

Why is Uber so desperate for a merger? The US food delivery market is very competitive. Customers tend not to be loyal to any one delivery service, and will hunt for the lowest price. This means food delivery services have to undercut each other’s prices until their profits are very, very small. Combining operations could allow Uber and Postmates to raise delivery fees and cut costs.

But Postmates is hesitant to commit. Last February, the company filed for IPO, meaning it has the option to go public. Postmates must decide whether to accept Uber’s ~~marriage~~ merger proposal, or fly solo on the public market.

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