WASHINGTON: Uber said Monday it was buying delivery startup Postmates for $2.65 billion in stock, in a move shaking up the sector which has seen surging growth during the coronavirus pandemic. The acquisition steps up the effort by Uber to diversify its business to meet growing delivery demands after failing to win a battle for US meal delivery giant GrubHub.

"Uber and Postmates have long shared a belief that platforms like ours can power much more than just food delivery - they can be a hugely important part of local commerce and communities, all the more important during crises like Covid-19," Uber chief executive Dara Khosrowshahi said in a statement.

Khosrowshahi told analysts on a conference call he expects the takeover will "drive significant efficiencies and cost savings" and help "offer wider selection at lower prices for consumers."

Postmates, a startup specializing in delivery of food, groceries and other goods, will be integrated into Uber Eats, which has seen its business double during the global health crisis.