Amazon to shut restaurant delivery service in U.S.

Andrew Cummings
June 13, 2019

Amazon is closing its USA restaurant delivery service, a 4-year-old business that failed to take off amid fierce competition from Uber Eats, DoorDash and others.

The Seattle-based retailer said in a statement that the service will be discontinued in the US on June 24.

"A small fraction of Amazon employees are affected by this decision, and many of those affected have already found new roles at Amazon", the company said in a statement.

But Scott thinks Amazon, which also owns grocery chain Whole Foods, isn't abandoning the food delivery business altogether.

To be sure, this is hardly a surprise.

Amazon Restaurants was a tiny player in the USA, taking about 2% of the market, according to Jeremy Scott, a food and restaurant analyst at Mizuho.

He said Amazon didn't promote the delivery service enough and didn't have deals with big fast food chains.

GeekWire also amusingly pointed out that the Amazon Restaurants Twitter account was still updating as of Monday. The service gave Prime members a way to get meals delivered to their door, using the Amazon Restaurants website or through the Prime Now shopping app.

Delivery providers have already started merging with one another: Newly public delivery company Waitr bought Bite Squad late a year ago, for instance. It failed to gain traction against its global competitors, including DoorDash, Grubhub, Uber Eats, Postmates and Just Eat. The company launched a takeout service in 2014 that let customers use the now-defunct Amazon Local app to order food for pick-up. "The aggregators tend to have sticky customers", David Gibbs, president of Taco Bell, KFC, and Pizza Hut owner Yum Brands, told analysts last month.

Uber Eats, which launched more than three years ago and is live in 500 cities globally, generated $1.46 billion in revenue last year, up from $587 million in 2017, and brought in $536 million during the first quarter of 2019. Update: Shares of Grubhub were up more than 6 percent Tuesday morning.

But giving up on restaurant delivery seems like a pretty big concession from a company that usually appears insistent on delivering everything.

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