Editor's take: Why Uber suddenly feels the need to scoop up a competitor rather than continue to invest in its own established product is a bit puzzling although given the surge in interest in delivery services as people practice social distancing, it makes sense that Uber would want to capitalize on this segment as rapidly as possible. The only question is, will people continue to use delivery service in droves once restrictions ease?
Uber has reportedly made an offer to acquire food ordering and delivery service Grubhub. No word yet on the details of the all-stock deal.
Sources familiar with the matter tell Bloomberg that discussions are ongoing and an agreement could be reached as early as this month.
Share value in Uber, which revealed earlier this month that it would be laying off around 3,700 employees or about 14 percent of its workforce and close at least 180 driver service centers, is up nearly seven percent on the news. Grubhub's stock, meanwhile, shot up more than 32 percent on the rumor.
Given current stock prices, Grubhub is valued at $5.47 billion while Uber has a market cap north of $58 billion.
It's an interesting development considering Uber's recent job cuts. The fact that the transportation company also operates its own food delivery service, Uber Eats, is another part of the equation that can't be overlooked.
A rival to Grubhub, Uber tweaked Uber Eats back in March to better serve local economies when it became clear that the Coronavirus wasn't going away anytime soon.