Uber and Amazon appear to be facing even stiffer competition in the global delivery market. According to reports from the Wall Street Journal, a pending deal between the Dutch food delivery company Takeaway.com and London based Just Eat has been struck.
The merger which still needs to be approved by both companies’ boards, shareholders, and government regulators could challenge both Uber and Amazon. The companies combined for a whopping three-hundred sixty million orders last year and look poised to challenge the American firms.
Deliver is set to explode over the next few years
It should come at no surprise that food delivery is growing and growing fast. We see Uber creating innovations in the space, such as trying out drones for delivery. Just about everything in our world is deliverable by one method or another. It is an on-demand world we live in and overseas markets are no different than our own. That is why you should expect to see more and more mergers like this one.
The aim of this merger appears to be based on expansion. It is becoming more and more difficult for delivery based startups to compete against the likes of Uber and Amazon. That is why these mergers will become commonplace as they jockey for position in emerging markets.
In this particular case, size does matter. Particularly when it comes to companies like Amazon and Uber who can box out and restrict access to certain markets just because of their size. However, as the food delivery market continues to grow including claims that over 10% of all restaurant sales will be delivery based by 2020, expect the competition to be fierce.
It’s going to be a giant game of Pac-Man…
In order to survive many of the larger companies are going to start by gobbling up all of the little guys and integrating their unique propositions into existing models. Recently Amazon dumped a whole truckload of cash into a smaller delivery competitor to Uber. Additionally, Takeaway.com recently acquired the German company Delivery Hero for a cool $930 million. The winner of the game will ultimately be the operation with the most cash and in this case, it would appear that Amazon is the big player.
Amazon vs. Uber, what are the implications?
Considering that Uber and Amazon exist in pretty different spheres of the delivery world, there isn’t a lot of direct competition.
Uber focuses primarily on restaurant delivery, whereas Amazon is looking to own the grocery delivery market. Initially you would think that there isn’t much overlap, but eventually, a monstrosity like Amazon is a beast that needs to be fed twenty-four-seven three hundred sixty-five days a year. This could mean that Amazon is interested in jumping into the restaurant delivery game soon.
It is still too early to call it a war…
Amazon doesn’t look like it wants to engage Uber outright. If anything weakening Uber’s position in the market provides more opportunity for Amazon. If Amazon can keep the likes of Uber stifled by investing in its competitors it could swoop in and take Uber in one quick bite. However, like I said I don’t see that happening.
Ultimately, this seems like Amazon expanding through clever avenues to keep its options open ultimately. Rumors have surfaced that Uber Eats would like to soon offer a grocery delivery service. That could be the reason why mergers like this are happening left and right.
What does it mean for drivers?
If you happen to be an Uber Eats driver, at this point it doesn’t mean much. Uber Eats is still one of the most profitable arms of Uber Technologies, Inc and will continue to expand and offer more services such as Starbucks coffee delivery despite mergers like this one. It is probably safe to say Eats drivers have a much longer lifeline than rideshare drivers do.