Uber agrees deal to buy food delivery

SAN FRANCISCO (AFP) – Uber has agreed to buy food delivery app Postmates in a multibillion dollar deal, according to Bloomberg. The San Francisco-based rideshare giant has been badly affected by the coronavirus pandemic – cutting a quarter of its global workforce in May – and has been looking to boost its growing food delivery service Uber Eats.

Bloomberg reported an expected USD2.65 billion deal with start-up Postmates in the United States (US), citing people familiar with the matter. The deal will bolster Uber and help Postmates, a nine-year-old firm that has struggled against larger food delivery rivals, the New York Times has previously reported.

A USD6 billion Uber offer this year to acquire Grubhub – another US food delivery app – fell through. Grubhub was later bought by European competitor Just Eat Takeaway.

Uber said in its quarterly update earlier this year that it lost nearly USD3 billion and its rides business was down some 80 per cent in April.

The company noted however, that it was seeing strong revenue growth for its Eats food delivery operation.