Deals

Uber Charts Path to Long-Elusive Profit With Postmates Deal

Watch: Uber Technologies Inc. agreed to buy Postmates Inc. for $2.65 billion to expand in food delivery after the coronavirus pandemic cratered demand for ride-hailing, its main business.(Source: Bloomberg)

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By Lizette Chapman and Michael Tobin

July 6, 2020 at 7:06 PM UTC

Updated on

July 6, 2020 at 7:30 PM UTC

This article is for subscribers only.

Neither Uber Technologies Inc. nor Postmates Inc. are profitable. They’re hoping that a combination of the two businesses will somehow get them there.

Uber said Monday it will spend $2.65 billion for the San Francisco-based food delivery company Postmates. The all-stock transaction is a bid to accelerate a path to profitability set by Uber Chief Executive Officer Dara Khosrowshahi and deliver growth rates once typical of Uber’s ride-hailing operation. Both aspects of that strategy rely on food delivery, which has gotten a boost from the coronavirus pandemic.