- Free Consultations / No Fees Until We Win
- (213) 927-3700
Personal Injury Firm
Though Postmates said via a press release that it would continue to run separately after being acquired by Uber, the food delivery company reportedly sent an email to customers urging recipients to download the Uber Eats app. Postmates wrote, “keep your eyes out for even more of your local favorites.”
Last year, the tech giant Uber bought Postmates in an attempt to consolidate market share and boost profitability. “[The] combination of platforms provides more choice and convenience for consumers, new demand and tailored technology offerings for restaurants, and increased income opportunities for delivery people,” the company wrote on its blog at the time.
With Americans still sheltering in place at two months shy from the one year mark of the coronavirus pandemic, sales for meal delivery services grew 135% by October 2020. Moreover, Postmates is currently the fourth major meal delivery company in the U.S., and it earned 7% of the country’s meal delivery market in October. With Postmates’s customers, Uber Eats can pull ahead in Los Angeles. As of October 2020, Postmates is the top food delivery service in the city, according to data from Second Measure. Meanwhile, Uber Eats lags behind DoorDash and is on par with Grubhub.
As written by Gizmodo last year, “Postmates represents just one piece of Uber’s grand ambition for Amazon-scale domination.” A combined Uber-Postmates would claim 37% of food delivery market share in the U.S., according to payments-tracker Edison Trends. That would put them head-to-head with the current leader, DoorDash, which has a 44% market share. However, NBC News pointed out: “The acquisition is already questionable because arguably, neither company is in a healthy financial state.” Uber reported a $2.9 billion loss in the first quarter of 2020, and the food-delivery companies are similarly struggling to turn a profit.
As reported by the New York Times, Uber laid off roughly 185 people from its Postmates division, or about 15% of Postmates’ total workforce in late January 2021. It has been reported that the Postmates brand and app will remain separate, and only much of the behind-the-scenes infrastructure will be melded with Uber Eats and supported by Uber Eats employees. It is unclear why they would send an email to their customers urging them to switch from Postmates to Uber Eats. In 2020, Uber Eats’ revenue overtook the revenue from the ride-hailing business for the first time as people ordered more meals delivered to their homes.
In the aforementioned press release, Uber CEO Dara Khosrowshahi said: “Uber and Postmates have long been committed to powering delivery services that support local commerce and communities, all the more important during crises like the one we face today. We’re thrilled to bring these two teams together to continue to innovate, bringing ever-better products and services for merchants, delivery people, and consumers across the country.”
Meanwhile, Uber is embarking on a series of virtual listening sessions aimed at gaining a “better understanding of how [it] can best support [their] restaurant and merchant partners.” These sessions were announced to begin in early 2021 and move to in-person when it’s safe to do so.