Uber and Postmates

The company which I will be discussing is the transport company and its negotiations to merge with Postmates Delivery Service. This is to expand its food delivery system to compensate for the decline in business, which has been witnessed during the Covid 9 pandemic. Uber began as a simple idea of transporting people after ordering the ride online through websites and mobile apps. The idea gained momentum and popularity throughout the world and it was adopted in many countries. In addition to ordering rides, Uber offers peer-to-peer ridesharing, food delivery, micro-mobility and ride service hailing. Currently, the negotiations have been successful and Uber was able to acquire Postmates food delivery service for $2.65 billion in an all-stock deal (Sherman, 2020).

Several issues were raised during the negotiations for the merger between Uber and Postmates. There was a concern on the harm which the merger will have on the competition and consumers. There was fear that the main purpose of the merger was to enhance Uber’s market power, eliminate the competitor which was Postmates and expand the ecosystem of Uber. Both companies offer services of delivering food from restaurants to people and by acquiring Postmates, Uber aims at eliminating this competition. Uber is well known for transporting people while Postmates is aimed at delivering food. By merging with Postmates, Uber is able to capture the market which had been tapped by Postmates making it easy to monopolize the market (Sherman, 2020).
There are several decision analysis tools which can be utilized in decision making. There SWOT analysis diagram helps to analyze the situation using four distinct quadrants i.e. strengths, weaknesses, opportunities and threats. A SWOT analysis will help to determine whether or not the business decision that is being made is viable. A decision matrix is a tool utilized when there are multiple choices to gain clarity. It is similar to a pros/cons list but requires for the level of importance of the factors to be determined. A Pareto analysis is a tool that helps to identify the changes which will be most effective to a business. This will help determine the business’s decisions (Ostrom, & Wilhelmsen, 2019). Although the merger between Uber and Postmates was not public, there are two tools which they may have utilized. Pareto analysis or a SWOT analysis may have been used to determine whether or not the decision to merge with Postmates was viable.
BATNA is an acronym for Best alternative to a negotiated agreement. This is the most advantageous alternative that an organization taking part in negotiations can take if they fail. Negotiating parties should have a BATNA so that they are not left stranded whenever the negotiations do not go as they had anticipated them to (Ostrom, & Wilhelmsen, 2019). In this case, the BATNA for Uber has not been well highlighted and it would have been of no use since the negotiations have been successful and Uber was able to acquire Postmates and expand its food delivery service. For Uber, they should seriously put into consideration their timing when going into negotiations. Uber had tried negotiating with Grubhub and this sis not go well as they failed to reach an agreement. The failure of these negotiations posed a threat to the negotiations between Uber and Postmates. Therefore, in the future, Uber should allow for sufficient time to lapse before they venture into another negotiation to avoid this effect.

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