Uber May Be Making a Big Buy in the Food Delivery Business
The meal-delivery world may be consolidating.
Uber Technologies Inc. is negotiating to purchase of meal-delivery service Deliveroo, reports Bloomberg. Uber already has its own meal-delivery service—Uber Eats—that competes with Deliveroo. Uber Eats is expecting $6 billion in revenue this year.
Deliveroo was last valued at more than $2 billion, while Uber sold a stake to Softbank (SFTBY) in 2017 that valued the whole company at $72 billion according to a February court settlement. Uber is planning an IPO for late 2019.
Neither company replied to Bloomberg’s request for comments on the size of the potential deal.
Deliveroo, founded in the U.K. in 2013, is available in more than 200 cities in Australia, Belgium, France, Germany, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, the United Arab Emirates, and the U.K. Its owners have hinted at a possible public offering but have not filed the relevant securities forms.
The meal-delivery world has been evolving, and Deliveroo announced earlier this month that it would offer customers the option to order food from multiple restaurants in a single delivery. It already partners with restaurants to build shared kitchens for delivery-only services, making it easier for messengers to centralize pickups. It is on a hiring binge in London, the Financial Times reports.
Both Deliveroo and Uber have faced court cases over whether their couriers are employees or legitimate independent contractors. And several meal delivery services have gone under in the last few years.
But labor and market risks have not slowed investment in the food- and meal-delivery business from both the tech and traditional retail sectors. Earlier this year Google partnered with Carrefour to deliver food, for example.