Uber has made an offer to acquire grubhub and could seal the deal as soon as this month.
The offer is said to be an all stock takeover that would see Grubhub get absorbed into Uber’s larger operation. Grubhub is currently valued at $4.5 billion.
Uber currently operates uber eats, which is a Grubhub competitor in many countries. In a 2019 report, Uber had 20 percent of the delivery app market while grub hub had 30 percent.
It is no surprise that Uber wants to invest more in the food delivery as its main business has taken a big hit from the coronavirus pandemic.
The company recorded losses of $2.9 billion last quarter occasioned by an 80 percent decline in ride sharing customers. Uber eats performed better during the crisis with an 89 percent year-over-year growth. However, uber eats still struggled with competition from the market.
Absorbing Grubhub would solve two problems for Uber. They will remove a major competitor and expand its scale and ability to offer food delivery services to a wider market.