Uber is spending $2.3B to get into catering

The cost of ordering catering for business meetings and events may decrease due to increased competition.

Uber is acquiring ezCater, a U.S. platform for catering and workplace meals, in an all-cash transaction valued at $2.3 billion. The deal aims to expand Uber Eats' offerings by incorporating business-focused catering services. EzCater, founded in 2007, operates as a marketplace connecting businesses with caterers and generated over $2.5 billion in gross bookings in the past 12 months. This acquisition is part of Uber's broader strategy to grow its food delivery business, following previous moves like the potential $15 billion acquisition of Delivery Hero and investments in drone delivery companies. Uber's CEO, Dara Khosrowshahi, stated the acquisition will enable restaurants to access new, larger customer segments and secure more valuable catering orders through Uber's extensive reach.

This acquisition signals a significant push by Uber to capture a larger share of the lucrative business-to-business food services market, moving beyond individual meal deliveries. By integrating ezCater's established network and logistics for corporate clients, Uber Eats aims to become a comprehensive solution for both individual and large-scale food orders. The substantial investment underscores Uber's ambition to diversify its revenue streams and leverage its existing delivery infrastructure for new service verticals.

The move could pressure existing business catering providers and food delivery platforms to innovate or consolidate, potentially leading to more competitive pricing and enhanced service offerings for businesses. Companies that rely on ezCater for their corporate meal needs can anticipate a more integrated experience, potentially with streamlined ordering and billing processes through the Uber platform. The success of this integration will be closely watched as a test case for Uber's ability to scale beyond its core ride-sharing and individual food delivery services into more complex B2B markets.