Uber Makes Offer to Buy Postmates Delivery Service – The New York Times

SAN FRANCISCO– Uber has actually made a takeover offer to purchase Postmates, the upstart delivery service, according to three individuals knowledgeable about the matter, as the on-demand food shipment market combines and Uber tries to find brand-new ways to make money.The two business could reach a deal as early as Monday evening, according to the people, who spoke on the condition of privacy since they were not authorized to do so openly. The talks are still going on, individuals cautioned, and any potential for a deal could fall apart.Representatives of Uber and Postmates decreased to comment on any potential deal talks.A tie-up might reinforce Ubers shipment organisation, Uber Eats, and assist it compensate for the cratering of its core ride-hailing company, which has actually collapsed in numerous cities because of the coronavirus pandemic. Food delivery is not lucrative, however demand has skyrocketed while restaurants are closed and people are remaining at home.The offer would likewise be a lifeline for Postmates, a nine-year-old business that was one of the earlier start-ups to harness the power of the mobile phone and the nascent “gig economy” to use city residents a courier service that could provide anything at the tap of a button.The worth of the takeover offer was not clear Monday evening.While Postmates saw early popularity in seaside cities– particularly Los Angeles– the business has actually had a hard time to take on much bigger rivals like DoorDash, GrubHub and Uber Eats. In February, Postmates confidentially submitted to go public.The category has actually been ripe for combination. Uber held merger talks this year with GrubHub, a food shipment rival. Those talks fell apart after the 2 business might not come to contract on a rate, 2 people familiar with the matter stated. GrubHub was eventually bought by Just Eats, a European food shipment service, for $7.3 billion in June.Shortly after the GrubHub deal fell through, Uber began to piece together a prospective offer for Postmates, among the couple of stand-alone American companies in food delivery.Postmates likewise held sale talks with DoorDash and GrubHub over the in 2015, according to two people with knowledge of the scenario, who decreased to be identified since the talks were private.Postmates was created in 2011 by Sam Street, Sean Plaice and Bastian Lehmann, who is the president. It handled to capture the hearts of Hollywood, with recommendations from celebs like Kylie Jenner and the vocalist John Legend. It even scored a financial investment from the actor Jared Leto.But Postmates, last valued by financiers at $2.4 billion, remains a small gamer in an increasingly competitive market. The other large private company, DoorDash, which financiers have valued at $16 billion, in complete confidence submitted to go public in February.Though not a direct comparison because the companies compute fees and discount rates differently, GrubHub reported $1.3 billion in revenue in 2019 and Uber Eats reported $1.4 billion.Postmates and its rivals deal with regulative hurdles. California just recently passed legislation that may require them to treat delivery motorists as employees rather than as independent contractors. That would mean the companies would need to use chauffeurs full-time benefits such as healthcare. Other states are thinking about similar legislation.Postmates is supporting a California ballot measure to overturn the law, which is known as Assembly Bill 5.