CLEVELAND, July 7, 2020 /PRNewswire/ -- On July 6, Uber Technologies Incorporated (San Francisco, CA) announced that it had agreed to acquire Postmates Incorporated (San Francisco, CA) for $2.65 billion in stock. This deal, if completed, would combine two of the largest third-party online foodservice delivery firms. Uber sees the two companies as complementary in terms of both their geographic focus and their relationships with foodservice providers.
Uber's UberEats unit has been the bright spot for the company recently, seeing exponential growth in contrast to the sharp declines in the company's flagship ride-hailing unit as stay-at-home orders and sharp reductions in travel for business and pleasure. Uber CEO Dara Khosrowshahi noted on a recent earnings call that "a higher and higher percentage of our Rides customers are using Eats."
According to The Freedonia Group's National Online Consumer Survey conducted in May 2020, 30% of adults note that they are using restaurant delivery more because of the coronavirus pandemic and 51% note that they are using restaurant curb-side pick-up options more.
Jennifer Mapes-Christ, consumer and commercial group leader for the Freedonia Group, notes "This combination of Uber and Postmates will enable the two companies to expand to a more comprehensive delivery service, as both are working to build networks to deliver groceries and other essentials."
According to Packaged Facts analyst Cara Rasch, "The shift to more convenience options via carryout and delivery precede even the COVID-19 outbreak which caused dine-in services at restaurants to be widely shuttered. The advent of apps and web portals allowing users to order from local restaurants and stores via the internet or a mobile application has caused carryout, and especially delivery, of restaurant food to expand rapidly."
Furthermore, she notes, "Online order services can be offered by third parties or proprietary, in-house applications. However, third-party apps – such as UberEats and Postmates – have a number of advantages, including consumer convenience of being able to order from a variety of restaurants using one app. While some restaurants consider the commissions that third-party online delivery companies charge to be a burden, they allow a restaurant to participate in delivery without investing in their own app or delivery staff."
However, Rasch notes, "Profitability difficulties and labor issues have challenged the third-party delivery industry, which is still in its infancy. In the longer run, third-party digital delivery operators will be faced with more foodservice operators developing their own delivery services. Foodservice companies may also combine with other local foodservice providers to offer the service at a lower fee level and to have more control of the delivery process."
Mapes-Christ comments, "It is that increasing competition with the restaurants themselves that is leading companies like Uber to think more broadly about on-demand delivery. Last-mile delivery in e-commerce more broadly is a challenge but quick service continues to be an increasing consumer priority."
For more information, see the following data-rich market analysis reports from The Freedonia Group's off-the-shelf research catalog, including US Foodservice Single-Use Products, Pouches, Global Foodservice Single-Use Products, Global Foodservice, Global E-Commerce, Retail Bags, and Global Single-Use Packaging Regulations.
Additional analysis of the food delivery industry can be found in Food & Beverage reports from Packaged Facts, The Freedonia Group's sister publisher. Key titles include Food Carryout & Delivery, Food Carryout and Delivery: Special COVID-19 Consumer Insights, Food Market Outlook 2020: Home Cooking, Grocery Shopping, & Food Trends in the Coronavirus Age, Office Coffee Service, Online Grocery Shopping, Meal Kits, Eating Trends: Restaurant Use, and Global Food E-Commerce.
About The Freedonia Group – The Freedonia Group, a division of MarketResearch.com, is a leading international industrial research company publishing more than 100 studies annually. Since 1985 we have provided research to customers ranging in size from global conglomerates to one-person consulting firms. More than 90% of the industrial companies in the Fortune 500 use Freedonia Group research to help with their strategic planning. Each study includes product and market analyses and forecasts, in-depth discussions of important industry trends, and market share information. Studies can be purchased at www.freedoniagroup.com and are also available on www.marketresearch.com and www.profound.com.
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SOURCE The Freedonia Group
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