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.

Fintech

Judge Zia Faruqui is trying to teach you crypto, one ‘SNL’ reference at a time

His decisions on major cryptocurrency cases have quoted "The Big Lebowski," "SNL," and "Dr. Strangelove." That’s because he wants you — yes, you — to read them.

The ways Zia Faruqui (right) has weighed on cases that have come before him can give lawyers clues as to what legal frameworks will pass muster.

Photo: Carolyn Van Houten/The Washington Post via Getty Images

“Cryptocurrency and related software analytics tools are ‘The wave of the future, Dude. One hundred percent electronic.’”

That’s not a quote from "The Big Lebowski" — at least, not directly. It’s a quote from a Washington, D.C., district court memorandum opinion on the role cryptocurrency analytics tools can play in government investigations. The author is Magistrate Judge Zia Faruqui.

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Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

The financial technology transformation is driving competition, creating consumer choice, and shaping the future of finance. Hear from seven fintech leaders who are reshaping the future of finance, and join the inaugural Financial Technology Association Fintech Summit to learn more.

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FTA
The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.
Enterprise

AWS CEO: The cloud isn’t just about technology

As AWS preps for its annual re:Invent conference, Adam Selipsky talks product strategy, support for hybrid environments, and the value of the cloud in uncertain economic times.

Photo: Noah Berger/Getty Images for Amazon Web Services

AWS is gearing up for re:Invent, its annual cloud computing conference where announcements this year are expected to focus on its end-to-end data strategy and delivering new industry-specific services.

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Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Image: Protocol

We launched Protocol in February 2020 to cover the evolving power center of tech. It is with deep sadness that just under three years later, we are winding down the publication.

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Bennett Richardson

Bennett Richardson ( @bennettrich) is the president of Protocol. Prior to joining Protocol in 2019, Bennett was executive director of global strategic partnerships at POLITICO, where he led strategic growth efforts including POLITICO's European expansion in Brussels and POLITICO's creative agency POLITICO Focus during his six years with the company. Prior to POLITICO, Bennett was co-founder and CMO of Hinge, the mobile dating company recently acquired by Match Group. Bennett began his career in digital and social brand marketing working with major brands across tech, energy, and health care at leading marketing and communications agencies including Edelman and GMMB. Bennett is originally from Portland, Maine, and received his bachelor's degree from Colgate University.

Enterprise

Why large enterprises struggle to find suitable platforms for MLops

As companies expand their use of AI beyond running just a few machine learning models, and as larger enterprises go from deploying hundreds of models to thousands and even millions of models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

As companies expand their use of AI beyond running just a few machine learning models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

Photo: artpartner-images via Getty Images

On any given day, Lily AI runs hundreds of machine learning models using computer vision and natural language processing that are customized for its retail and ecommerce clients to make website product recommendations, forecast demand, and plan merchandising. But this spring when the company was in the market for a machine learning operations platform to manage its expanding model roster, it wasn’t easy to find a suitable off-the-shelf system that could handle such a large number of models in deployment while also meeting other criteria.

Some MLops platforms are not well-suited for maintaining even more than 10 machine learning models when it comes to keeping track of data, navigating their user interfaces, or reporting capabilities, Matthew Nokleby, machine learning manager for Lily AI’s product intelligence team, told Protocol earlier this year. “The duct tape starts to show,” he said.

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Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

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