Uber ($UBER) is looking to gobble up food delivery app Postmates ($PRIVATE:POSTMATES), the New York Times reports. After a catastrophic few months for the ridesharing company, it may be looking to bring Postmates under the fold of its own delivery app UberEats to recoup some losses.
Food delivery is overflowing with competition ranging from enormous to fledgling, as we chronicled back in 2018, which also means it’s overflowing with opportunities for consolidation. And Uber has been looking to consolidate for a while now; less than a month ago it made a bid to buy GrubHub ($GRUB) which ultimately fell through. Now it’s turned its hungry eyes in Postmates’ direction.
Postmates is overall one of the smaller competitors in the field, but its small size means there’s plenty of room to grow - and it’s definitely growing in areas where Uber isn’t. App Store reviews for Postmates are up 276% year-over-year, and up 39% since January thanks to a bump after Americans started quarantining.
Reviews for UberEats, however, have almost completely plateaued since July 2019. By scooping up Postmates, Uber could be looking to inject some fast growth into their one major operation that’s still up and running as their flagship ride-sharing service has tanked thanks to COVID-19.
Facebook data shows a more detailed view of where Postmates stands compared to its competitors. Overall, Uber’s strong brand recognition has made it king on the platform with 2.85 million likes, adding another 200,000 or so during COVID. But DoorDash ($PRIVATE:DOORDASH) has used the pandemic to surge into popularity. From July 2019 to Jan. 2020, they only added some 22,000 new likes. But in the same amount of time this year, they’ve added twice that with 45,000 new likes.
While Postmates appears to be trailing behind DoorDash and isn’t anywhere near GrubHub’s numbers, it is still steadily growing. Both Grubhub and Postmates have added some 10,000 followers so far this year - that’s a sea change for Postmates and small potatoes for GrubHub, whose facebook following has utterly stagnated going as far back as 2017. It may be a blessing in disguise for Uber that their offer fell through, as Postmates clearly has more room to grow while GrubHub is holding steady.
Postmates is also showing promise in Talking About data. It took until the end of May for them to really catch on, but they outperformed GrubHub for more of June, and the two are now within just 2,000 mentions of one another. DoorDash was also a top performer during the first full month of quarantine, but has since gotten less buzz and is turning downwards towards Postmates and GrubHub, signaling that the two smaller competitors might be moving up.
DoorDash, which is valued at $16 billion, might seem like a desirable acquisition target since it so consistently outperforms Postmates on social media, but they may just be too large for a company like Uber to acquire. After all, when Uber tried to buy the much smaller GrubHub, which Just Eat Takeaway acquired for $7.3 billion, a few antitrust alarms were set off. Postmates, valued at $2.4 billion, may represent the largest size Uber is willing to absorb so as not to invoke the ire of regulators.
Either that, or it’s all they can afford.
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales, and app ratings - and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
