SAN FRANCISCO — Uber has made a takeover supply to purchase Postmates, the upstart supply service, in accordance with three individuals aware of the matter, because the on-demand meals supply market consolidates and Uber appears for brand new methods to generate profits.
The 2 firms may attain a deal as early as Monday night, in accordance with the individuals, who spoke on the situation of anonymity as a result of they weren’t approved to take action publicly. The talks are nonetheless happening, the individuals cautioned, and any potential for a deal may disintegrate.
Uber is discussing shopping for Postmates for about $2.6 billion, one of many individuals mentioned. Representatives of Uber and Postmates declined to touch upon any potential deal talks.
A tie-up may 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 isn’t worthwhile, however demand has soared whereas eating places are closed and persons are staying at residence.
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 facility of the smartphone and the nascent “gig financial system” to supply metropolis dwellers a courier service that would ship something on the faucet of a button.
Whereas Postmates noticed early reputation in coastal cities — particularly Los Angeles — the corporate has struggled to compete with a lot bigger rivals 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 individuals aware of the matter mentioned. GrubHub was ultimately purchased by Simply Eats, a European meals supply service, for $7.three billion in June.
Shortly after the GrubHub deal fell via, Uber started to piece collectively a possible supply for Postmates, one of many few stand-alone American firms in meals supply.
Postmates additionally held sale talks with DoorDash and GrubHub over the past yr, in accordance with two individuals with information of the state of affairs, who declined to be recognized as a result of the talks have been non-public.
Postmates was created in 2011 by Sam Avenue, Sean Plaice and Bastian Lehmann, who’s the chief govt. It managed to seize the hearts of Hollywood, with endorsements from celebrities like Kylie Jenner and the singer John Legend. It even scored an funding from the actor Jared Leto.
However Postmates, final valued by buyers at $2.four billion, stays a small participant in a fiercely aggressive market. The opposite massive non-public firm, DoorDash, which buyers have valued at $16 billion, confidentially filed to go public in February.
Although not a direct comparability as a result of the businesses calculate charges and reductions in another way, GrubHub reported $1.three billion in income in 2019 and Uber Eats reported $1.four billion.
Postmates and its rivals face regulatory hurdles. California not too long ago handed laws which will require them to deal with supply drivers as workers somewhat than as impartial contractors. That may imply the businesses must supply drivers full-time advantages equivalent to well being care. Different states are contemplating comparable laws.
Postmates is supporting a California poll measure to overturn the legislation, which is called Meeting Invoice 5.