Uber set to sell takeaway division to rival Deliveroo ‘within two years’

TAXI firm Uber will sell its Uber Eats takeaway delivery business to rival Deliveroo within two years, analysts believe.

The move would leave just two main delivery rivals in the UK, which is dominated by Just Eat – Britain’s biggest online takeaway company – and comes as demand for takeaways online soars during the coronavirus crisis.

Analysts at respected City outfit Jefferies believe the new owner of Just Eat – Takeaway.com – will ‘choke’ its two smaller rivals with an aggressive strategy including slashing delivery fees that will force them to merge.

In their detailed note, industry experts Giles Thorne and Sebastian Patulea said: ‘If executed well, Takeaway’s actions could/ should drive its competitors into each other’s arms.’

As well as dropping the minimum order values, getting rid of delivery fees, and snapping up new restaurant partners, they expect the newly owned Just Eat to move away from the gig economy model. That would stifle the supply of riders at Uber and Deliveroo as most would rather be employees at Just Eat, the analysts argue.

The outbreak of Covid-19 has triggered a spike in orders online as people selfisolate at home and with many supermarket shelves empty.

The Jefferies analysts said they believe the Competition & Markets Authority would approve a merger of Deliveroo and Uber Eats in the UK, even though the regulator is probing the deal for Amazon to buy a stake in Deliveroo.

They wrote: ‘We’ve spoken in this note of the rising regulatory tide against big US internet, so the sale of Uber Eats to Deliveroo would be a laudable backing of a national champion (Deliveroo being a UK private company and founded in London).’