A potential merger of Uber and Grubhub would create a major powerhouse in the food ordering and delivery business.
In the ongoing series of PYMNTS Provider Rankings that track mobile-app markets, both Uber Eats and Grubhub have consistently placed in the top five in PYMNTS Provider Ranking of Aggregators.
Word emerged Tuesday (May 12) that Uber — which operates the Uber Eats food delivery service — had approached Grubhub about a possible merger or acquisition. Talks toward such a deal are said to still be underway.
The New York Times reported that Uber approached Grubhub after the pandemic struck. Grubhub reportedly asked for two Uber shares for each of its own, for a total valuation of $6 billion. Uber’s market cap, by comparison, is nearly $59 billion.
As PYMNTS reported on Tuesday, a merger of the two food delivery giants could create an unbeatable team. A combined Uber Eats-Grubhub would control 55 percent of the nation’s meal delivery market, according to Wedbush Securities. Market tracker Second Measure found Uber-Grubhub would capture about 80 percent market share in New York City, 70 percent in Boston and 60 percent in Chicago.
And that’s not all.
The latest monthly PYMNTS Provider Rankings of the top 20 food-ordering companies found that Uber Eats and Grubhub place No. 2 and No. 3, respectively, in an analysis of app downloads, average number of users and other factors. Only DoorDash ranked higher, coming in at No. 1.
The merger talks between the two firms also come as COVID-19 has turned most restaurants into takeout-focused operations that often use Uber Eats or Grubhub for customer ordering and delivery. PYMNTS recently reported that in a letter to shareholders, Grubhub President and CFO Adam DeWitt and Founder and CEO Matt Maloney wrote the company added about the same number of new eateries in March and April as it did during all of 2019's second half.