Uber has been in talks with food delivery company, Grubhub for an all-stocks acquisition. This merger could play an important role in upscaling the money-losing Uber Eats and bring it up the ladder leaving behind the leading DoorDash. This deal can also help Uber in running its business during Coronavirus as its main commute business is on hold.
The deal is in its initial phase with the companies involved discussing stock exchange ratio and there is no surety of the contract getting finalized. This step will not only remove a strong competitor from the business but will also give a strong market position to Uber. Analysts claim that this could make the US meal delivery business a two-horse race. The companies did not share any details of the discussion when asked.
According to March 2020 stats, DoorDash performed 42% of total deliveries while Uber Eats and Grubhub did 20% and 28% respectively. Uber was valued at $55 billion this Monday while Grubhub was at $4.3 billion. Experts say that Uber can wait for sometime but then the competition will increase in the market. Uber also sold its Indian Uber Eats business to Zomato in January and shut down operations in 8 countries earlier this month. The matter experts are divided in two opinion with some thinking that merger can be a boon while other thinking of it as an exploitation of customers and workers of the company.