meal delivery service Postmates acquired by uber for $2.65 billion

Postmates services will be acquired bu Uber for $2.65 billion all-stock deal intended to give the ride-hail company a much-need jolt after its offer to buy Grubhub fell apart amid antitrust scrutiny.

Postmates’ app will continue to run separately after the acquisition, but it’ll be able to tap into a merchant and delivery network combined with Uber Eats. Uber says this will mean more restaurant options for consumers and more efficient deliveries for drivers who pick up multiple orders at a time.

Uber desperately needs its meal delivery division up and running, Uber Eats, to make up for the huge losses it’s been experiencing since the start of the coronavirus pandemic. Food delivery is not profitable, nor is Uber’s core ride-hailing business. However the company is hoping that with restaurants closed to in-person dining, more people will be ordering takeout in the future.

Uber Eats is an obvious bright spot, but it’s still under pressure, thanks to regulatory pressure and competition from Grubhub and DoorDash. Uber Eats has seen an acceleration in demand since mid-March. Uber recently shuttered its Eats business in eight cities.Uber is still trailing behind DoorDash, the leader in food delivery.

Postmates, which is headquartered in San Francisco, helped revolutionize the food delivery segment when it launched in 2011. The company had been planning to go public in October but reportedly told its advisers market conditions were suboptimal and delayed the filing.