Most people have heard of the popular quote that declares, “If you cannot beat them, join them”. In fact, this quote is now being brought to life at this very moment in the food delivery business. Recently, Uber took a giant leap of faith and decided to expand the growth of its Uber Eats division by acquiring Postmates, one of its former competitors, in a deal worth $2.65 billion. Despite there being many reasons as to why Uber decided to acquire Postmates, many speculate the effects that the COVID-19 pandemic had a significant influence on Uber’s decision.
Although the infamous COVID-19 pandemic effected all businesses in one form or another, Uber especially was found to have a tremendously negative impact. Fears of contamination and spreading of the virus overwhelmed the minds of the public and made even the most courageous individuals afraid to get into the car of a stranger. Despite the fear of contracting COVID-19 negatively affecting Uber’s ride-sharing profits, Uber also noticed that the pandemic had a positive impact on their business as well, specifically related to their Uber Eats division. By choosing to have food delivered to one at home, individuals were able to safely eat their food from the comfort of their house while successfully avoiding the travel to public areas in the process. The demand for food delivery services skyrocketed due to the pandemic, which caused Uber to start searching for ways to enhance its Uber Eats division.
Recently, Uber decided to make a power move in the food delivery service by choosing to acquire Postmates in a $2.65 billion deal. Although Uber is procuring Postmates, the deal clarifies that Postmates will continue to operate on its own app and keep its brand name. This acquisition is extremely significant, because by choosing to make this deal, Uber is choosing to expand and potentially dominate in a market that the company already resides in while still offering Postmates as an alternative delivery service to consumers. According to Edison Trends, the deal acquired will cause Uber to have a particularly bright future in the food delivery industry. In the United States, Uber and Postmates combined is expected to make up about 37 percent of all food delivery sales. This combination of two powerhouse food delivery services could potentially mean that Uber will dominate the markets in the next few years. The combination of Uber and Postmates has the potential to have an impressive impact in the market through technological advancements as well as opening Uber’s business revenues to a larger consumer base.
There are many views pertaining to if Uber has made a smart decision by choosing to expand its market in the food delivery business. Uber’s decision is considered by some to be risky due to the business purely relying on the hope that the food delivery industry will continue to rise in demand throughout the long-term future. However, despite Uber’s potential risk in acquiring Postmates, life has proven to many of us that every great success begins with a bit of risk. To achieve true success in industries, one must be able to give up control and take a leap of faith. Although the future is yet to be determined for the food delivery industry, by selecting to acquire Postmates, Uber has the potential to not only dominate the business, but also take profits to places that Uber has never seen before—all it will take is a leap of faith.