{"id":26978,"date":"2020-07-07T08:20:58","date_gmt":"2020-07-07T08:20:58","guid":{"rendered":"https:\/\/www.ceo-na.com\/?p=26978"},"modified":"2020-07-07T14:37:55","modified_gmt":"2020-07-07T14:37:55","slug":"uber-gambles-on-postmates-deal","status":"publish","type":"post","link":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/opinion\/uber-gambles-on-postmates-deal\/","title":{"rendered":"Uber gambles on Postmates deal"},"content":{"rendered":"

Uber shares rose 6% on Monday after the company announced the $2.65 billion all-stock purchase of Postmates.<\/em><\/strong><\/p>\n

\u00a0<\/em><\/p>\n

Uber is bragging about the growth in its food delivery service, but the success only masks the true quandary facing the company\u2014the damage done by COVID-19 on its core ride-sharing business.<\/p>\n

Yet on Monday, Uber announced it will buy Postmates for $2.65 billion, claiming the deal will boost its Uber Eats delivery unit, bringing in 10 million active customers in key markets such as Los Angeles, Phoenix, and Las Vegas.<\/p>\n

The problem for Uber is that its traditional customers are staying home, meaning they\u2019re no longer taking rides to restaurants, bars, parties, concerts, or the office.\u00a0The flipside of the lockdown was that the company\u2019s meal delivery business grew in the\u00a0first quarter<\/a>, yet Uber Eats still accounted for less than one-third of total gross bookings. Rides made up 69%.<\/p>\n

The lockdown was viewed as a temporary measure, of course, but with key markets like Texas and Florida reinforcing their restrictions, investors are concerned, especially as an increasing number of employers have said they won\u2019t be reopening their offices for the rest of the year.<\/p>\n

Cue the Postmates deal. The acquisition means 98% of the food delivery market in the U.S. will be controlled by Uber, GrubHub, and privately held DoorDash. Uber\u2019s stock rose 6% on Monday to $32.52 and is up 9.1% for the year, while the S&P 500 is down slightly in 2020.<\/p>\n

Uber CEO Dara Khosrowshahi said in a call with investors after the transaction was announced that the company\u2019s ride-hailing business has bounced back somewhat from earlier in the year. After falling 75% in the second quarter compared to 2019, it\u2019s now at less than a 60% decline from the prior year. According to Khosrowshahi, some countries are even seeing growth.<\/p>\n

At the same time, Eats\u2019 bookings more than doubled in the second quarter, and Postmates\u2019 grew by 67%, according to the investors call.<\/p>\n

\u201cWe\u2019re in the unique position of having the Eats business to significantly offset headwinds in our rides business,\u201d Khosrowshahi said.<\/p>\n

Yet this really does remain to be seen. In May, Uber twice announced jobs cuts of at least 3,000 employees, leaving it with about 20,000, according to the latest available headcount figures. The company also said it would be shutting or consolidating 45 offices.<\/p>\n

Khosrowshahi said he expects the Postmates deal to close in the first quarter of 2021. Yet according to Refinitiv, Uber could see as much as an 8% drop in revenue this year to just over $13 billion. While analysts anticipate a reacceleration next year, that\u2019s based on the assumptions that food delivery will continue to grow\u2014and more importantly, rides will also pick back up.<\/p>\n","protected":false},"excerpt":{"rendered":"

Uber shares rose 6% on Monday after the company announced […]<\/p>\n","protected":false},"author":21,"featured_media":26977,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53],"tags":[99,98,1385,3890,3891,100,3886,3892],"class_list":["post-26978","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinion","tag-ceo","tag-ceo-north-america","tag-ceo-northam","tag-postmates","tag-postmates-deal","tag-uber","tag-uber-eats","tag-uber-gambles-on-postmates-deal"],"_links":{"self":[{"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/posts\/26978","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/comments?post=26978"}],"version-history":[{"count":1,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/posts\/26978\/revisions"}],"predecessor-version":[{"id":26979,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/posts\/26978\/revisions\/26979"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/media\/26977"}],"wp:attachment":[{"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/media?parent=26978"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/categories?post=26978"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/tags?post=26978"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}