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Illustration: Sarah Grillo/Axios

Uber has agreed to acquire food delivery company Postmates for $2.65 billion in an all-stock deal, the companies announced Monday.

Why it matters: This is the latest merger for the food delivery space as the sector undergoes an ongoing market consolidation.

The big picture: The Uber-Postmates tie-up would still put the combined businesses' market share behind DoorDash, which has about 45% of the U.S. food delivery market, according to credit card spending tracking companies.

  • Postmates has raised just over $900 million in total funding, and was last valued at $2.4 billion post-money.
  • This deal also showcases Postmates' prowess in the Los Angeles and Miami markets, where the company has strong market share.

Between the lines: It's not surprising to see Postmates get acquired. Though it paused its IPO ambitions last year, the company was recently rumored to resume plans to go public and was also looking to raise new funding, as Axios reported.

  • Uber has also been drastically reshaping its business since the beginning of the coronavirus pandemic. Its ride-share business has significantly suffered, dropping by as much as 70% in April, and it recently offloaded its scooter and bike rental unit. However, its food delivery arm has seen a surge as restaurants turned to delivery to remain afloat.
  • The pandemic has also made ride-hailing and delivery more costly for the companies across these industries as they've had to provide more resources to drivers, including paid sick leave and cleaning supplies.

What's next: Both Postmates and Uber have opposed a newly effective California labor law that could force the companies to reclassify their drivers from independent contractors to employees. The companies are backing a state ballot measure to change the law in the coming November elections.

Go deeper

The gig economy is on the ballot

Illustration: Aïda Amer/Axios

Prop 22 is shaping up to be California's most expensive ballot question ever, and its outcome could upend a gig economy business model that's attracted hundreds of billions of investment dollars.

The state of play: Prop 22, supported by such companies as DoorDash and Uber, is favored in most recent polling. But it's no sure bet, due to a large chunk of still undecided voters.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: Large coronavirus outbreaks leading to high death rates — Coronavirus cases are at an all-time high ahead of Election Day — Fauci says U.S. may not return to normal until 2022
  2. Politics: Top HHS spokesperson pitched coronavirus ad campaign as "helping the president" — Space Force's No. 2 general tests positive for coronavirus
  3. World: Taiwan reaches a record 200 days with no local coronavirus cases — Europe faces "stronger and deadlier" wave France imposes lockdown Germany to close bars and restaurants for a month.
  4. Sports: Boston Marathon delayed MLB to investigate Dodgers player who joined celebration after positive COVID test.
Dan Primack, author of Pro Rata
2 hours ago - Economy & Business

Leon Black says he "made a terrible mistake" doing business with Jeffrey Epstein

Photo illustration: Sarah Grillo/Axios. Photo: Rick Friedman/Corbis/Getty Images

Apollo Global Management CEO Leon Black on Thursday said during an earnings call that he made a "terrible mistake" by employing Jeffrey Epstein to work on personal financial and philanthropic services.

Why it matters: Apollo is one of the world's largest private equity firms, and already has lost at least one major client over Black's involvement with Epstein.