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Uber, Postmates Agree on $2.65B All-Stock Deal

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Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#31

Post by csours »

tyre wrote: post #24

Food delivery is a terrible business. M&A won’t make it better. I worked at LivingSocial in 2012/2013. We used to joke that “we lose money on every transaction but make it up in scale.” Takeout and Delivery was one of the last bets the company made. Basically food delivery. The customer service load is huge, the services aren’t really differentiated, and you have to both pay the driver enough for it to be worth it an…

I saw someone online saying how they didn't get their ranch with their pizza, so they called up customer service and eventually got a whole new pizza out of the deal.

I understand it sucks to not get your ranch, but come on...

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#32

Post by Jommi »

arcticbull wrote: post #27
0zymandias wrote: post #18

I am bullish on this as a recent shareholder. We are now in the consolidation phase of delivery service where fewer companies mean less competition, more efficiency and better economics. This is where Dara’s strength is. He has a history of great dealmaking and acquisitions. I expect Uber to thrive as the industry consolidates.

Remember JUMP? They were acquired for $200M like, a year and a half ago. As far as I can tell, they don't exist anymore.

Jump bikes still exist. Not sure what you're on about.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#33

Post by Jommi »

uber473453 wrote: post #19
rchandna wrote: post #5

I don't understand why Uber has been so obsessed with buying another company in the US food delivery market.

The CEO is a banker. Naturally he sees M&A, not innovation, as the company's future.

It's been an M&A company for years now. Just look at its portfolio of ownerships in competing local leaders like Didi, Yandex and Grab. It's a perfect food delivery ride hailing super app investment fund!

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#34

Post by acwan93 »

mardifoufs wrote: post #8

What's Postmates moat? Having never used it, I don't necessarily see the 2.6b$ value in a smaller delivery app that is only really used in some areas of the US. Though I'm sure there is something I'm missing and 2.6b$ is probably less expensive than the cost of pricing Postmates out of the market especially considering it's an all stocks deal. It's just that delivery seems to be easily scalable and easy to just dump…

I use Grubhub most of the time, and I’ve found the thing that keeps me on the platform is 1) The $10 monthly credit on American Express Gold cards and 2) The 2% cash back from the Rakuten portal, which stacks with the 4x points from the Amex card.

Of course, a lot of restaurants end up increasing their prices on Grubhub to make up for their fees, and rightly so (I phone in using the number listed on Apple Maps). I still don’t understand how anyone expects these food delivery apps to be profitable. I’m also 95-99% certain once we feel safe dining at a restaurant again we wouldn’t be using these apps anymore.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#35

Post by shin_lao »

tyre wrote: post #24

Food delivery is a terrible business. M&A won’t make it better. I worked at LivingSocial in 2012/2013. We used to joke that “we lose money on every transaction but make it up in scale.” Takeout and Delivery was one of the last bets the company made. Basically food delivery. The customer service load is huge, the services aren’t really differentiated, and you have to both pay the driver enough for it to be worth it an…

I think it will make sense when cities will have a better infrastructure for targeted deliveries. I'm thinking routes for drones and clear delivery spots.

Would not be surprised 30y from now most homes won't have kitchen anymore. You'll have an access where a drone can come in an deliver whatever you ordered.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#36

Post by chejazi »

tyre wrote: post #24

Food delivery is a terrible business. M&A won’t make it better. I worked at LivingSocial in 2012/2013. We used to joke that “we lose money on every transaction but make it up in scale.” Takeout and Delivery was one of the last bets the company made. Basically food delivery. The customer service load is huge, the services aren’t really differentiated, and you have to both pay the driver enough for it to be worth it an…

Maybe ghost kitchens will fix the unit economics.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#37

Post by mardifoufs »

cglong wrote: post #28
mardifoufs wrote: post #8

What's Postmates moat? Having never used it, I don't necessarily see the 2.6b$ value in a smaller delivery app that is only really used in some areas of the US. Though I'm sure there is something I'm missing and 2.6b$ is probably less expensive than the cost of pricing Postmates out of the market especially considering it's an all stocks deal. It's just that delivery seems to be easily scalable and easy to just dump…

Of all the services I've tried in this space, only Postmates lets you request items from businesses they aren't partnered with. This was a huge win once when I needed groceries delivered quickly.

So they can go to the restaurant and order for you? That's interesting. I can't imagine it being very efficient or very fast though, how do they manage to not lose tens of minutes per order on non partnered restaurants/stores?

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#38

Post by cletus »

What I find interesting about the food delivery business is that there's clearly a market for this but nobody's happy.

- Restaurants (rightly) complain that the drivers provide a poor service. For example, pizza delivered cold because the drivers have no heat bags. I've even heard of a pizza box mounted vertically on a delivery bicycle.

- Customers are unhappy because food can be delivered cold through no fault of the restaurant. To save money, multiple deliveries can be scheduled at once. You can see this as your assigned driver drives passed the restaurant when your food is ready, clearly they're on another delivery. They come back 20 minutes later and turn what should be a 10-15 minute delivery (from the time the order is ready) to a 45 minute disaster;

- And drivers don't seem happy, complaining about low pay.

Yet... people want food delivered. Is this really just a case of people not willing to pay what the service truly costs? If so, no consolidation will help. I imagine fairly small delivery areas is really the only thing that can be economical.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#39

Post by godzillabrennus »

tyre wrote: post #24

Food delivery is a terrible business. M&A won’t make it better. I worked at LivingSocial in 2012/2013. We used to joke that “we lose money on every transaction but make it up in scale.” Takeout and Delivery was one of the last bets the company made. Basically food delivery. The customer service load is huge, the services aren’t really differentiated, and you have to both pay the driver enough for it to be worth it an…

Until we have robots to do the labor I agree.

Re: Uber, Postmates Agree on $2.65B All-Stock Deal

#40

Post by vecinu »

acwan93 wrote: post #34
mardifoufs wrote: post #8

What's Postmates moat? Having never used it, I don't necessarily see the 2.6b$ value in a smaller delivery app that is only really used in some areas of the US. Though I'm sure there is something I'm missing and 2.6b$ is probably less expensive than the cost of pricing Postmates out of the market especially considering it's an all stocks deal. It's just that delivery seems to be easily scalable and easy to just dump…

I use Grubhub most of the time, and I’ve found the thing that keeps me on the platform is 1) The $10 monthly credit on American Express Gold cards and 2) The 2% cash back from the Rakuten portal, which stacks with the 4x points from the Amex card. Of course, a lot of restaurants end up increasing their prices on Grubhub to make up for their fees, and rightly so (I phone in using the number listed on Apple Maps). I st…

> 1) The $10 monthly credit on American Express Gold cards

But the annual fee is $250, how is it worth it? At best if you use the $100 airline credit, which is now hard to "hack", and max out $10/mo on Grubhub, you're still paying $30 for the privilege...

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