SAN FRANCISCO — Uber has made a takeover provide to purchase Postmates, the upstart supply service, in keeping with three folks accustomed to the matter, because the on-demand meals supply market consolidates and Uber appears for brand new methods to make cash.
The 2 firms might attain a deal as early as Monday night, in keeping with the folks, who spoke on the situation of anonymity as a result of they weren’t approved to take action publicly. The talks are nonetheless occurring, the folks cautioned, and any potential for a deal might crumble.
Representatives of Uber and Postmates declined to touch upon any potential deal talks.
A tie-up might bolster Uber’s supply enterprise, Uber Eats, and assist it compensate for the cratering of its core ride-hailing enterprise, which has collapsed in lots of cities due to the coronavirus pandemic. Meals supply is just not worthwhile, however demand has soared whereas eating places are closed and individuals are staying at house.
The deal would even be a lifeline for Postmates, a nine-year-old firm that was one of many earlier start-ups to harness the ability of the smartphone and the nascent “gig economic system” to supply metropolis dwellers a courier service that would ship something on the faucet of a button.
The worth of the takeover provide was not clear Monday night.
Whereas Postmates noticed early reputation in coastal cities — particularly Los Angeles — the corporate has struggled to compete with a lot bigger opponents like DoorDash, GrubHub and Uber Eats. In February, Postmates confidentially filed to go public.
The class has been ripe for consolidation. Uber held merger talks this yr with GrubHub, a meals supply competitor. However these talks fell aside after the 2 firms couldn’t come to settlement on a value, two folks accustomed to the matter stated. GrubHub was finally bought by Just Eats, a European food delivery service, for $7.3 billion in June.
Shortly after the GrubHub deal fell through, Uber began to piece together a potential offer for Postmates, one of the few stand-alone American companies in food delivery.
Postmates also held sale talks with DoorDash and GrubHub over the last year, according to two people with knowledge of the situation, who declined to be identified because the talks were private.
Postmates was created in 2011 by Sam Street, Sean Plaice and Bastian Lehmann, who is the chief executive. It managed to capture the hearts of Hollywood, with endorsements from celebrities like Kylie Jenner and the singer John Legend. It even scored an investment from the actor Jared Leto.
But Postmates, last valued by investors at $2.4 billion, remains a small player in a fiercely competitive market. The other large private company, DoorDash, which investors have valued at $12.7 billion, confidentially filed to go public in February.
Though not a direct comparison because the companies calculate fees and discounts differently, GrubHub reported $1.3 billion in revenue in 2019 and Uber Eats reported $1.4 billion.
Postmates and its rivals face regulatory hurdles. California recently passed legislation that may require them to treat delivery drivers as employees rather than as independent contractors. That would mean the companies would have to offer drivers full-time benefits such as health care. Other states are considering similar legislation.
Postmates is supporting a California ballot measure to overturn the law, which is known as Assembly Bill 5.