An Overview of Zomato and Uber Eats

Garret Camp and Travis Kalanick formed the UberEATS parent company in 2009. With the
arrival of UberFRESH in California in August 2014, the firm began offering food distribution.
The website was renamed UberEATS and launched in London in 2016.

UberEats began charging shipping fees in August 2018 based on the range or distance of the
shipment. The shipping fees in the United Kingdom and Ireland are calculated depending on the
order size. UberEats revealed in November 2019 that by the summer of 2019, it would be
delivering food through drones. Zomato purchased UberEats in an all-stock deal on January 21,
giving UberEats a 9.99 percent interest in the company.

Deepinder Goyal founded Zomato, an Indian food and restaurant distribution startup, in 2008.
Zomato's services are available in 24 countries and 10,000 towns. In 2011, Zomato began
delivering throughout India, including in Delhi NCR, Mumbai, Bangalore, Chennai, Pune,
Kolkata, and other cities.

Zomato has purchased 12 startups around the world. Menu Menia was purchased by Zomato in
July 2014. Tongue stun, a Bengaluru startup, was purchased by Zomato in September 2018 for
an 18-million-dollar cash and stock offer. Zomato recently purchased the Lucknow-based Tech
Angle startup, which specialized in drones.

On the 21st of January 2020, Zomato purchased UberEats stock for 350 million dollars.

Motivation of the Deal

The reason for Zomato's purchase of Uber Eats-

 Big acquirers acquire smaller businesses in order to deliver faster, to provide more

reliable facilities at a cheaper cost. While Zomato is a larger company than Uber Eats and
they both compete in the same industry but Uber was unable to influence the market.
 This will allow Zomato achieve a strategic advantage over Swiggy, as the combination of
Zomato and Uber Eats will help the company boost its market share to more than 50%,
putting it ahead of Swiggy.
  Zomato would now have more collective bargaining power with restaurants, decreasing
its losses.
 Swiggy was being seen as a Food Tech or Food Hub by the strong bank, but now that
Uber Eats has been acquired by Zomato, Zomato will become the Food Tech or Food
Hub in the food industry.

Why did Uber decide to sell?

Uber has been losing money for a few years, and its CEO, Dara Khosrawasahi, said that the
company would only compete in markets where it would be the No. 1 player, while in India,
Zomato and Swiggy were ahead of UberEats, which is why they sold it to Zomato. 

Uber competed with Swiggy and Zomato, who have well-established business relationships with
local restaurants and are able to adapt rapidly to market trends such as changes in technology.

According to industry figures, UberEats accounts for 5% of all global online food ordering
bookings. UberEats lost 107 million dollars in December of this year.

The transaction also offers Uber a 9.99 percent stake in Zomato, which is expected to be priced
at $3 billion. This deal would allow Uber to recoup at least some of its initial investment in India.
Furthermore, the sales price paid by Zomato for UberEats can be used by UberEats to expand its
other companies.

Zomato and Uber Eats plan to buy shares of each other-

This method of acquisition entails purchasing a company or acquiring a company by offering
them stock. Zomato decided to give Uber Eats 10% of its stock in exchange for 100% ownership.
The acquirer bears all liabilities and assets of the company in this sort of transaction, and the
buyer may with contractual obligations allocate the liability.
Conclusion

Uber Eats was purchased by Zomato in an all-stock agreement. Customers will benefit the most
from this sale because it will have significant savings. The stock agreement is carried out by
firms that are in the same industry. As a result, Zomato has risen to the top of the food marketing
and supply chain, establishing itself as the food industry's megastar.