Technology

Uber is trying to buy Grubhub

Uber has made an offer to buy Grube, potentially for the deal earlier this month, according to a report form Bloomberg. The proposal is said to be an all-stock takeover that will see Grub – currently valued at $ 4.5 billion – be absorbed into Uber’s larger operation.

Uber operates its own food delivery service, Uber Eats, which rivals Grubh. October 2019 report Uber Eats had about 20 percent share in the delivery app market, while Grubh had 30 percent. Both fell behind DoorDash, which controls 35 percent of the market and grew the fastest among the three. By purchasing Grubh, Uber could move up to third position and give the company a huge advantage over Dordash and other services.

That Uber would like to invest more in its food delivery is no surprise; The company has taken a tremendous hit over the past few months due to a massive drop in customers for its ride-sharing business due to the coronovirus epidemic. Uber saw a record loss of $ 2.9 billion in the previous quarter, causing an 80 percent drop in ride-sharing customers. Uber Eats was one of the only positive parts of Uber’s business, with 89 percent year-over-year gross booking growth for April. But Uber still struggled with increasing competition from Dordash and Grubh, along with difficulties in areas that were less profitable.

Absorbing one of its biggest competitors will help resolve both issues, expanding its scale and ability to offer service in more locations, putting out a major source of competition for Uber.

To expand its functions beyond Raube-sharing, GrubHub will mark the latest effort by Uber. The company recently made another major investment in Lime, which included Uber’s bike and scooter business, Jump, Lime. Under that deal, Lime scooters and bikes can now be leased directly into Uber’s app, and Uber has the option to purchase Lime solely between 2022 and 2024 at a special price.

Back to top button