This post was originally published on this site
A Postmates sticker is displayed next to an Uber Eats sticker on the window of a restaurant in San Francisco, Calif. Uber Technologies Inc. has closed its purchase of Postmates Inc.
Justin Sullivan/Getty Images
Bolstering its increasingly important delivery business, Uber Technologies Inc. announced Tuesday that it has completed its $2.65 billion acquisition of Postmates Inc.
The Uber Eats and Postmates apps will continue to run separately, Uber UBER, +0.61% said in a filing with the Securities and Exchange Commission, though the two companies have begun integrating U.S. operations.
The companies’ combined delivery business would be second in market share to the nation’s leading food delivery app, DoorDash Inc., which is set to go public. According to Edison Trends, DoorDash as of October commanded 50% of the U.S. market, and Uber and Postmates together had 33%, followed by GrubHub Inc. at 16%.
See: The pandemic has more than doubled food-delivery apps’ business. Now what?
With restrictions because of the coronavirus pandemic giving a big boost to delivery of food and other goods, Uber Eats brought in revenue of $1.45 billion in the third quarter, a 125% year-over-year increase. Uber estimates that for the quarter ending Dec. 31, Postmates would contribute $350 million to $400 million to delivery gross bookings, according to the filing. Integrating Postmates would also increase its delivery business’ adjusted Ebitda loss by about $7 million to $12 million, the company said.
Food-delivery apps face pressure from the restaurant industry and municipalities over the commissions they take for deliveries and other issues, including their classification of delivery workers as independent contractors. In its announcement of the deal’s completion, Uber said it will begin a national “listening tour” that is “designed to better understand merchants’ needs, and to continue to develop products, services, and policies that protect their interests.”
See: The pandemic turned Postmates’ IPO plans into a bidding war between Uber and Wall Street
Uber announced its all-stock purchase of Postmates in July, beating out two unnamed special-purpose acquisition companies that had made offers for the San Francisco-based company. The deal was approved by the U.S. Justice Department last month.
Uber shares are up 2.5% Tuesday, to $50.90. They have risen nearly 71% so far this year.
