Uber is trying to buy Grubhub
Uber has made an offer to buy Grubhub, with the potential for a deal to be reached as early as this month, according to a report from Bloomberg. The offer is said to be an all-stock takeover that would see Grubhub — currently valued at $4.5 billion — be absorbed into Uber’s larger operation.
Uber operates its own food delivery service, Uber Eats, which is a rival of Grubhub. An October 2019 report had Uber Eats with roughly 20 percent of the delivery app market, while Grubhub had 30 percent. Both fell behind DoorDash, which controls 35 percent of the market and is the fastest-growing of the three. Buying Grubhub could catapult Uber from third place to first and give the company a huge advantage over DoorDash and other services.
That Uber would want to invest more into its meal delivery offerings isn’t a surprise; the company has taken a tremendous hit in the past few months due to a steep decline in customers for its ride-sharing business caused by the coronavirus pandemic. Uber saw record losses of $2.9 billion last quarter, led by an 80 percent decline in ride-sharing customers. Uber Eats was one of the only positive parts of Uber’s business, with an 89 percent year-over-year gross bookings growth for April — but Uber still struggled with increased competition from DoorDash and Grubhub, along with difficulties in regions that were less profitable.
Absorbing one of its largest competitors would help solve both of those issues, removing a major source of competition for Uber while expanding its scale and ability to offer service in more places.
Buying Grubhub would mark the latest effort by Uber to expand its operations beyond ride-sharing. The company also recently made another huge investment into Lime, which saw Uber’s bike and scooter business, Jump, absorbed into Lime. As part of that deal, Lime scooters and bikes are now able to be rented directly in Uber’s app, and Uber has the option to buy out Lime entirely between 2022 and 2024 at a specific price.
Uber has made an offer to buy Grubhub, with the potential for a deal to be reached as early as this month, according to a report from Bloomberg. The offer is said to be an all-stock takeover that would see Grubhub — currently valued at $4.5 billion — be absorbed…
