Uber buys Postmates: Here's why

With the COVID-19 pandemic, we've seen a large uptick in demand for home delivery. For weeks, restaurants in many regions of the country were limited to take out and delivery orders, and if coronavirus cases keep increasing in the US, they may be limited to those options once more. Services like Uber Eats, Postmates, and Door Dash have been in high demand in recent weeks, and soon, two of those companies will be joining forces.

Uber announced today that it will buy Postmates for $2.65 billion. The all-stock transaction is expected to be finalized in Q1 2021, so we're still a long way out from that final handshake. In its announcement today, Uber says that the board of directors for both companies have approved the sale, and "stockholders representing a majority of Postmates' outstanding shares have committed to support the transaction."

It sounds like this is a good buy for Uber for multiple reasons. For starters, Postmates is popular in regions and among demographics where Uber Eats is not. We also have the fact that Postmates has "strong relationships with small- and medium-sized restaurants" that Uber Eats can tap into to offer a more complete delivery service.

When the deal is complete, Uber plans to keep the Postmates app up and running, though it plans to combine the merchant and delivery networks for both apps. Presumably, we'll see delivery options for Postmates and Uber Eats listed in both apps, potentially giving restaurants that would have only been listed in one more exposure and access to a larger customer base.

As with all acquisitions, this one between Uber and Postmates still has to go through the standard regulatory approval process, and Postmates stockholders have to approve the deal too. Assuming that all happens, we should see Postmates and Uber Eats join together early next year.