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After a closer look, federal regulator approves Uber Eats-Postmates deal

The DOJ and FTC had been investigating the $2.65 billion agreement for potential anti-trust violations.
Uber Eats x Postmates
Photograph: Shutterstock

UPDATE: This story has been updated to include a comment from Protect Our Restaurants.

The Department of Justice has approved Uber Eats’ deal to acquire Postmates, after the agency asked to take a closer look at the agreement for potential antitrust violations.

Uber Eats said in an SEC filing Tuesday that it now expects to close the $2.65 billion deal in the fourth quarter. 

It will bring together two of the country’s largest food delivery companies, consolidating the industry to three major players: Uber Eats/Postmates, DoorDash and Grubhub. That prompted the DOJ and Federal Trade Commission to request additional information in September as it investigated whether the move could hurt competition in the space. However, the agencies ended that inquiry early, and the deal can now proceed.

Protect Our Restaurants, a group advocating for more regulation of third-party delivery companies, criticized the decision in a statement Tuesday. 

“This decision by the Department of Justice will only tighten the incredible squeeze restaurant owners like us are already experiencing every day,” the group said. “Allowing Uber to acquire Postmates is a failure by the DOJ to protect the needs of small business owners and the communities we support. Small businesses across the country will need President-elect Biden to take a new approach to deals like this.”

Uber’s Tuesday filing also contained some information for restaurants that use Postmates and might be wondering how the deal will affect them: After the acquisition closes, Uber Eats will waive exclusive agreements between Postmates and about 800 restaurants in 11 markets. That opens the door for Uber Eats to partner with those restaurants in the future, but it said it won’t do that until six months after close.

Those markets are Bellingham, Wash.; Charleston, S.C.; El Paso, Texas; Las Vegas; Los Angeles; Miami; Nashville; New Orleans; Orlando; Tampa Bay; and western Arizona.

Uber Eats has said it plans to use Postmates to bolster its market share out West, where Postmates has a strong presence.

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