Power

Why Uber's big deal for Grubhub fell out — and a European suitor stepped in

The deal was reportedly nixed due to antitrust concerns, which have shadowed the courtship since it was revealed publicly.

Hands holding donuts

How many ways can the food delivery market be split among companies? Recent moves signal a trend toward consolidation.

Photo: Tu Trinh/Unsplash

The hottest deal in tech isn't happening after all: Uber's acquisition talks with Grubhub have collapsed, and Grubhub instead will merge with European giant Just Eat Takeaway.com.

The Uber deal was reportedly nixed due to antitrust concerns, which shadowed the courtship since it was revealed publicly. Rep. David Cicilline, the top Democrat on the House Judiciary's antitrust subcommittee, called the potential deal "a new low in pandemic profiteering," while a group of Democratic senators asked the FTC and Department of Justice to look into the acquisition, which they claimed would "raise serious competition issues." Based on a Wedbush analysis, a combined Grubhub and Uber Eats would have controlled around 55% of the U.S. restaurant delivery market.

Amid this political uncertainty, Grubhub reportedly wanted Uber to agree to a cash breakup fee, to be paid in the event that the deal didn't go through. Uber was seemingly reluctant to commit — and has now bailed altogether.

Fortunately for the struggling Grubhub, an overseas savior emerged. Grubhub and Just Eat Takeaway.com (which we'll call JET) announced Wednesday that they'll merge in an all-stock deal. JET is itself the product of a merger, with the Dutch Takeaway.com acquiring Britain's Just Eat this year for around $7.4 billion.

Grubhub, which is worth around $5 billion, will finally give the European firm a foothold in the U.S., delivery's second-biggest market. JET's lack of a U.S. presence up to now also means that the deal is unlikely to run afoul of U.S. regulators, who don't have to worry about decreased competition in the American market.

That's not the only reason this deal makes sense. Like Grubhub, JET's primary focus is a marketplace-based model, one that pairs consumers with restaurants that handle their own delivery. Uber Eats, meanwhile, pays its own drivers — a business that Grubhub executives famously said would never "generate significant profits," but were forced to enter in the face of competition from DoorDash, Postmates and Uber Eats.

Should the merger go through, then, a crucial question will be whether Grubhub continues to do its own deliveries (something that JET has also experimented with) or if it retreats to its once-successful marketplace-only model.

Grubhub could also benefit from having an owner that is singularly dedicated to delivering food and one that's been in the game for a long time. Both Just Eat and Takeaway.com were founded in 2000, before Grubhub's 2004 founding and significantly earlier than Uber Eats' 2014 launch.

For Uber, the loss of the deal is a mixed bag. Uber wanted to expand Eats' market share, helping to boost its least-unprofitable segment — and may now struggle to do so. But there could be a silver lining. With Uber under significant financial and regulatory pressures, a complex merger might not have been the best idea right now. Without Grubhub to distract it, Uber can focus on its core business of moving people.

This post was updated with more information about the Just Eat Takeaway.com merger.

Policy

Google is wooing a coalition of civil rights allies. It’s working.

The tech giant is adept at winning friends even when it’s not trying to immediately influence people.

A map display of Washington lines the floor next to the elevators at the Google office in Washington, D.C.

Photo: Andrew Harrer/Bloomberg via Getty Images

As Google has faced intensifying pressure from policymakers in recent years, it’s founded trade associations, hired a roster of former top government officials and sometimes spent more than $20 million annually on federal lobbying.

But the company has also become famous in Washington for nurturing less clearly mercenary ties. It has long funded the work of laissez-faire economists who now defend it against antitrust charges, for instance. It’s making inroads with traditional business associations that once pummeled it on policy, and also supports think tanks and advocacy groups.

Keep Reading Show less
Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

Sustainability. It can be a charged word in the context of blockchain and crypto – whether from outsiders with a limited view of the technology or from insiders using it for competitive advantage. But as a CEO in the industry, I don’t think either of those approaches helps us move forward. We should all be able to agree that using less energy to get a task done is a good thing and that there is room for improvement in the amount of energy that is consumed to power different blockchain technologies.

So, what if we put the enormous industry talent and minds that have created and developed blockchain to the task of building in a more energy-efficient manner? Can we not just solve the issues but also set the standard for other industries to develop technology in a future-proof way?

Keep Reading Show less
Denelle Dixon, CEO of SDF

Denelle Dixon is CEO and Executive Director of the Stellar Development Foundation, a non-profit using blockchain to unlock economic potential by making money more fluid, markets more open, and people more empowered. Previously, Dixon served as COO of Mozilla. Leading the business, revenue and policy teams, she fought for Net Neutrality and consumer privacy protections and was responsible for commercial partnerships. Denelle also served as general counsel and legal advisor in private equity and technology.

Workplace

Everything you need to know about tech layoffs and hiring slowdowns

Will tech companies and startups continue to have layoffs?

It’s not just early-stage startups that are feeling the burn.

Photo: Kirsty O'Connor/PA Images via Getty Images

What goes up must come down.

High-flying startups with record valuations, huge hiring goals and ambitious expansion plans are now announcing hiring slowdowns, freezes and in some cases widespread layoffs. It’s the dot-com bust all over again — this time, without the cute sock puppet and in the midst of a global pandemic we just can’t seem to shake.

Keep Reading Show less
Nat Rubio-Licht

Nat Rubio-Licht is a Los Angeles-based news writer at Protocol. They graduated from Syracuse University with a degree in newspaper and online journalism in May 2020. Prior to joining the team, they worked at the Los Angeles Business Journal as a technology and aerospace reporter.

Entertainment

Sink into ‘Love, Death & Robots’ and more weekend recs

Don’t know what to do this weekend? We’ve got you covered.

Our favorite picks for your weekend pleasure.

Image: A24; 11 bit studios; Getty Images

We could all use a bit of a break. This weekend we’re diving into Netflix’s beautifully animated sci-fi “Love, Death & Robots,” losing ourselves in surreal “Men” and loving Zelda-like Moonlighter.

Keep Reading Show less
Nick Statt

Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.

Workplace

This machine would like to interview you for a job

Companies are embracing automated video interviews to filter through floods of job applicants. But interviews with a computer screen raise big ethical questions and might scare off candidates.

Although automated interview companies claim to reduce bias in hiring, the researchers and advocates who study AI bias are these companies’ most frequent critics.

Photo: Johner Images via Getty Images

Applying for a job these days is starting to feel a lot like online dating. Job-seekers send their resume into portal after portal and a silent abyss waits on the other side.

That abyss is silent for a reason and it has little to do with the still-tight job market or the quality of your particular resume. On the other side of the portal, hiring managers watch the hundreds and even thousands of resumes pile up. It’s an infinite mountain of digital profiles, most of them from people completely unqualified. Going through them all would be a virtually fruitless task.

Keep Reading Show less
Anna Kramer

Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.

Latest Stories
Bulletins