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.

Big Tech’s big job shuffle

Protocol reporters discuss a big week of moves in the tech industry, from Jack Dorsey to Gigi Sohn to Square – sorry, Block.

Photo: Joe Raedle/Getty Images

On this episode of the Source Code podcast: Issie Lapowsky joins the show to discuss Jack Dorsey’s sudden exit from Twitter, the waning cult of the founder, and what’s next for the social network. Then, Ben Pimentel joins to chat about why Dorsey wanted to focus on Square, why Square is now called Block, and the company’s crypto-first future. Finally, Ben Brody chats about the confirmation hearings for Gigi Sohn and Alan Davidson, and what happens next in the Meta/Giphy antitrust saga.

For more on the topics in this episode:

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David Pierce

David Pierce ( @pierce) is Protocol's editorial director. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

The fintech developers who made mobile banking as routine as texting or online shopping aren't done. The next frontier for innovation is open banking – fintech builders are enabling consumers to be at the center of where and how their data is used to provide the services they want and need.

Most people don't even realize they're using open banking services today. If they connected their investment and banking accounts in a personal financial management solution or app, they're using open banking. Perhaps they've seen ads about how they can improve their credit score by uploading pay stubs or utility records to that same app – this is also powered by open banking.

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Bob Schukai
Bob Schukai is Executive Vice President of Technology Development, New Digital Infrastructure & Fintech at Mastercard, where he leads the technical design, execution and support of innovative open banking and fintech solutions, as well as next generation technologies to support global payment and data capabilities. Prior to Mastercard, Schukai’s work focused on cognitive computing, financial technology, blockchain, user experience and digital identity. He is also a member of the Institute for Electrical and Electronics Engineers.

Meta, Block, Alphabet: Why some companies outgrow their old names

When tech becomes Big Tech, sometimes the names feel too small.

What do you do when your company becomes many companies? You might have to rebrand.

Photo: Block

What’s in a name? For tech companies, quite a lot.

Most companies in tech are named for their first product, whether it’s a social network, a shopping website, a search engine or a messaging service. But as big tech companies grow, their ambitions tend to sprawl, and their founding names often can’t keep up. So in recent years, tech giants like Meta, Block and Alphabet shifted from the names of their flagship products to something all-encompassing. But companies taking on a sleek new name isn’t just a marketing play. Brands often take new names to create distance between themselves and their flagship product.

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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.

Loom, Zoom, boom: How Rippling raised $250 million with a demo video and a memo

Video app Loom has become the founder’s tool of choice for pitching venture capitalists.

Rippling CEO Parker Conrad recorded a product demo on Loom and sent it to investors as a fundraising shortcut.

Photo: Rippling

Parker Conrad has come to deeply loathe PowerPoint slides. He’s raised money for three different startups, and sending investors slides of a pitch deck feels like sending them only half a presentation, he said.

“It’s like sending someone a song and some of the tracks of music are missing,” Conrad, the co-founder and CEO of HR startup Rippling, told Protocol. “Any slide that you put together is meant to be accompanied by your voice track. And so if you’re sending slides without that, it’s a terrible way to convey information.”

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Biz Carson

Biz Carson ( @bizcarson) is a San Francisco-based reporter at Protocol, covering Silicon Valley with a focus on startups and venture capital. Previously, she reported for Forbes and was co-editor of Forbes Next Billion-Dollar Startups list. Before that, she worked for Business Insider, Gigaom, and Wired and started her career as a newspaper designer for Gannett.

The cry-laughing emoji has absolutely earned this

Is it always sincere or even trendy? No. Does it serve its purpose? Absolutely.

The laugh-cry emoji has provided us with a codified process for indicating that we are all having a fun time here.

Photo: atomicstudio via Getty Images

In a stunning victory for the rights of people who find out about TikToks via Instagram Reels and have fond memories of Warped tour, the cry-laughing emoji has once again emerged from the fray as the most-used emoji of the year, according to data from the Unicode Consortium. The tearful grin, whose Christian name is “Face with Tears of Joy,” hasn’t relinquished its stranglehold on the top spot since 2015, when we as a nation were reeling from Zayn Malik’s One Direction exit, marveling at the Sisyphean efforts of pizza rat and becoming slowly numb to Uptown Funk. That was the same year that the teary-eyed grin was named Oxford Dictionary’s word of the year.

This is the second year that the Unicode Consortium, a nonprofit organization tasked with digitizing language, has released data (the first was in 2019). Other emoji in the top 10 include the red heart, sobbing face, face with heart eyes and Old Faithful, the venerable smiley face 😊. The Consortium notes that many of the most-used emoji’s placements have stayed consistent from its 2019 data, although the pleading face emoji (🥺) did make a noticeable leap from 97 to 14.

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Becca Evans
Becca Evans is a copy editor and producer at Protocol. Previously she edited Carrie Ann Conversations, a wellness and lifestyle publication founded by Carrie Ann Inaba. She's also written for STYLECASTER. Becca lives in Los Angeles.
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