In the United States, Grubhub now offers free meal deliveries to Amazon Prime members as part of a developing commercial alliance between the two businesses.
The agreement, which was made public on Wednesday, would allow paying Amazon customers to sign up for a free one-year subscription to Grubhub+ (which costs $9.99 per month) and enjoy unlimited free deliveries when they make restaurant orders through the service.
At the same time, Amazon might start investing in Grubhub’s operations. According to a statement from Just Eat Takeaway.com, the parent company of Grubhub, which is based in the Netherlands, Amazon has the option to purchase a 2 percent ownership in the company, with the potential to increase that stake to 15 percent provided certain business performance criteria are reached.
The partnership might help Amazon increase the appeal of its Prime subscription, which currently costs $139 a year. Additionally, it supports its food delivery initiatives. In 2019, Amazon made the abrupt decision to discontinue its US restaurant delivery service, which provided food to Prime members.
Additionally, Shackart suggested that Amazon “seek to acquire the Grubhub operations.”
Just Eat Takeaway.com said in a statement on Wednesday that it “continues to actively investigate the partial or full sale of Grubhub.” The price of Just Eat Takeaway.com shares, which are traded in Amsterdam, increased by almost 13% on Wednesday.
Amazon’s most recent entry into the food delivery market comes as the sector is dealing with fresh challenges and a more challenging funding environment.
As pandemic-related business restrictions lessen and many people start eating out again, the demand for food delivery services has dropped significantly. The sector has recently been severely impacted by a labor shortage and a constantly changing regulatory environment.
The sector may be further disrupted by Amazon’s actions. On the news on Wednesday morning, the price of DoorDash stock dropped by about 8%. Since the year’s beginning, the stock has lost about 50% of its value. Shares of Uber, the company that runs UberEats, have similarly declined by about 50% in 2022 and have dropped by more than 4% on Wednesday.
According to data released last month by Bloomberg’s Second Measure, DoorDash still holds a 59 percent market share in the US meal delivery business, followed by Uber Eats with a 24 percent market share and Grubhub with a 13 percent market share.
