Uber buys catering company for $2.3 billion to boost Uber Eats
Uber has agreed to acquire corporate catering platform ezCater for $2.3 billion in cash. The deal is expected to help Uber Eats expand its presence in orders for companies, offices and business events.
As Bloomberg reports, ezCater operates a platform for arranging food services for meetings, conferences and other corporate events. The company works with more than 140,000 restaurants across the U.S., while the average order exceeds $400. Over the past 12 months, more than $2.5 billion worth of orders were placed through the platform.
Uber strengthens its food delivery business
The acquisition of ezCater will expand Uber’s food delivery segment, which accounts for nearly half of Uber’s total bookings. The business is also growing faster than the company’s core ride-hailing service.
The deal should also strengthen Uber’s position against DoorDash. The largest food delivery platform in the U.S. launched its own workplace catering service in April. Uber expects to close the deal in the coming months.
Why food delivery became an important business for Uber
Uber Eats has become one of the company’s largest businesses thanks to a huge volume of orders and growing demand for not only prepared meals, but also groceries and other goods. Delivery is already growing faster than the ride-hailing business.
Uber Eats also generates additional revenue from Uber One subscriptions and advertising inside the app. The more orders that move through the same network of couriers and restaurants, the more efficient the delivery business becomes, while repeat customers help reduce spending on attracting new users.
Uber recently cut 3,300 jobs amid growing competition from robotaxis.
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