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An Uber Eats delivery person in Japan. Photo by Bloomberg.

Uber Misses Out on Grubhub—But That May Not Be All Bad

Photo: An Uber Eats delivery person in Japan. Photo by Bloomberg.

The planned merger of U.S. online food-ordering pioneer Grubhub and its European counterpart, Just Eat Takeaway—a deal the companies announced on Wednesday—will disappoint investors in Uber. The ride-hailing and food-delivery giant last month offered to buy Grubhub. But Just Eat is a more suitable partner for Grubhub.

Just Eat, like Grubhub, is primarily an app that helps people order meals from restaurants operating their own delivery service. DoorDash and Uber Eats, on the other hand, are food-ordering apps that handle delivery for restaurants lacking such a service. That’s a faster-growing business than the Grubhub model, but one with worse economics at the moment. And if this deal happens, it will dash investor hopes that a shakeout of the U.S. food delivery sector could help players like DoorDash or Uber Eats turn profitable sooner. That’s likely why Uber’s stock fell 5% on the news. 

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