Uber acquires Postmates for $2.65B

Jul 9, 2020

Uber recently came to an agreement to expand their market share by acquiring Postmates, the California based company, for $2.65 billion. Uber’s on-demand transportation business continues to struggle during the coronavirus pandemic, so the company is looking to build upon its growing food delivery service.

Food delivery apps have grown significantly in recent years. The existence of so many applications, and their similar offerings, has led to high levels of competition between companies like UberEats, Grubhub, Doordash, and more, making profits harder to come by for all parties involved.

The current food delivery system is fundamentally flawed. It is no mystery that the economics of third-party delivery are broken as all parties involved seem to lose money. Uber’s move to acquire Postmates is not only a positive sign for restaurants, but for all members of the ordering ecosystem (i.e. restaurants, delivery drivers, and customers). An incoming trend of consolidation amongst third-party delivery apps, and subsequently a reduction in the total number of players, will hopefully fix the mangled nature of the industry.

Acquiring customers is now done predominantly online, as restaurants continue to bolster their online presence. Using third-party delivery services is one of the ways in which restaurants have sought out customers and adjusted to life during COVID-19. However, until further consolidation occurs amongst third-party delivery apps, questions remain regarding whether or not using these apps is the most effective way to help shift restaurants to an e-commerce business.

Before the coronavirus outbreak, using third-party delivery apps was justifiable in that, customers ordering via a third-party delivery service could potentially convert to dine-in customers. Now, that opportunity ceases to exist. Marqii helps restaurants drive customers towards first-party delivery, avoiding the current challenges that come with third-party delivery apps altogether. Through Marqii’s partnership with OrderSnapp, restaurants will be able to access a high quality and low cost first-party ordering system, which will help restaurants generate more revenue as they continue to adapt to the new way of life due to COVID-19.