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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.

House passes $768 billion defense spending bill

Photo: Andrew Harrer/Bloomberg via Getty Images

The House approved a $768 billion National Defense Authorization Act (NDAA) for the 2022 fiscal year in a bipartisan 316-113 vote on Thursday.

Why it matters: The annual bill, which authorizes Pentagon spending levels and guides policy for the department, would require women to register for the military draft, among other provisions.

5 hours ago - Politics & Policy

Republicans’ secret lobbying

Illustration: Shoshana Gordon/Axios

The five Senate Republicans who helped negotiate and draft the $1.2 trillion bipartisan infrastructure bill have been privately courting their Republican colleagues to pass the measure in the House.

Why it matters: House GOP leaders are actively urging their members to oppose the bill. The senators are working to undercut that effort as Monday shapes up as a do-or-die moment for the bipartisan bill.