Amazon shuts down its restaurant delivery service in the US

Daniel Fowler
June 12, 2019

Amazon has dabbled in food delivery ever since launching grocery delivery service AmazonFresh in Seattle more than a decade ago.

The closure of the USA business, which was first reported by technology news site GeekWire, will happen on June 24th.

To be sure, this is hardly a surprise. Amazon shut down the London branch of Restaurants late past year, which could have been a sign of its impending US demise, in retrospect. And earlier this year, it took a stake in United Kingdom delivery service Deliveroo.

With Amazon out of the restaurant delivery business, analysts said others could pick up the crumbs.

Still, the move furthers the delivery business's consolidation, as a small handful of large, national players have come to dominate the market.

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For Amazon Prime members, it provides the same services as other food-delivery apps like Uber Eats and Deliveroo, seeing meals delivered to their houses through Prime Now or the Amazon Restaurants website.

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

As it is, restaurant companies are increasingly faced with the reality that delivery customers prefer their own services. "The aggregators tend to have sticky customers", David Gibbs, president of Taco Bell, KFC, and Pizza Hut owner Yum Brands, told analysts last month. Those three companies combined hold more than 75 percent of the USA food delivery market share.

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.

Uber listed Amazon as an Uber Eats competitor in its IPO documents earlier this year. Update: Shares of Grubhub were up more than 6 percent Tuesday morning. Grubhub estimates the market has only about 15 percent penetration.

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