| Hi, it's Priya. It seems like food delivery companies are finally getting tired of bleeding each other dry. Uber Technologies Inc. has made an offer to buy Postmates Inc., less than a month after its failed bid to buy Grubhub. The move is the latest in a flurry of activity for the unprofitable but fast-growing industry. Just Eat Takeaway.com NV snapped up Grubhub before Uber could close the deal. Postmates is still considering going public via a special purpose acquisition company. And DoorDash Inc., the lavishly funded market leader, filed for a public stock listing earlier this year, before raising more money from private investors. The frenzied deal-making comes during what should be the heyday for food delivery companies—Uber Eats' business has more than doubled during the pandemic. Instead, the coronavirus delivery boom has given way to an era of pricey acquisitions that may not be enough to improve the sector's bad unit economics. If Uber does buy Postmates it's not clear it will make much of a difference. For starters, Postmates is small. The company was an early pioneer in food delivery, but it has long seemed likely that it would one day be swallowed by one of its larger rivals. The company held just 8% of the market in the U.S. in May, compared to 44% for DoorDash, and 23% each for Uber Eats and Grubhub, according to Second Measure, which tracks credit card transactions. If Uber does gobble up Postmates' 8% of market share, it will still trail DoorDash, which last month raised $400 million more dollars from investors, and has demonstrated a willingness to spend. "Postmates doesn't significantly move the needle" for Uber, Wedbush Securities analyst Daniel Ives said. But, Ives added, "The clock's ticking, and if it's not Uber, there will be another strategic acquirer likely for Postmates." If DoorDash or another rival were to scoop up the startup, it could push Uber Eats even further behind. An added benefit is that Postmates is such a small player that an acquisition by Uber is unlikely to raise antitrust fears, Ives said. Regulator attention to a combined Uber-Grubhub giant was one of the concerns that sank the deal. And buying Postmates would give Uber Eats a boost in certain markets, such as Los Angeles, where it is a leader. For Uber, which lost $2.9 billion in the first quarter, a little consolidation is better than none, and could be a step toward easing the fierce competition that has long made food delivery such a bad business. Uber Chief Executive Officer Dara Khosrowshahi said last month at a virtual conference that one of Uber's explicit goals is to drive consolidation in the food delivery industry, a move expected to bring companies closer to profitability. But even with the tie-ups, it's not clear the price wars will slow down. DoorDash is still growing quickly, and Just Eat Takeaway's Grubhub deal is a signal of increased ambition on the part of a European giant, not retrenching. Companies may be moving to stop the bleeding, but that doesn't mean it will work. —Priya Anand | 
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