It’s official: Uber Eats is joining forces with another restaurant food delivery app.
In a deal announced Monday, Uber agreed to acquire Postmates for $2.65 billion. The acquisition was rumored last week after Uber’s failed bid to buy delivery competitor Grubhub in June.
Postmates is less popular than Uber Eats, with only about 8 percent of the U.S. delivery market. Combined, Postmates and Uber Eats have about 30 percent of the market, compared to Grubhub’s 23 percent. Grubhub was bought by a Dutch company, Just Eat Takeaway, last month.
Uber avoided antitrust scrutiny after its Grubhub talks fell apart, but could face new questions over its acquisition of Postmates.
In a statement about the deal, Uber explained how Postmates will continue as a separate app. But behind the scenes, its infrastructure will serve restaurants and delivery workers on both platforms.
Uber says together the companies will “offer more tools and technology” to more restaurants and consumers who will “benefit from expanded choice across a wider range of restaurants and other merchants.”
On the delivery end, Uber claims workers “will enjoy more opportunities to earn income, with increased batching of orders to make better use of their time.”
It’s not clear how restaurants will be affected. Many restaurant owners have complained about high fees from delivery apps cutting into already slim profit margins. Now, with even fewer competitors, there’s less pressure for apps like Uber Eats and Grubhub to lower fees.