CONSUMER

Amazon partners with Grubhub to offer Prime customers meal delivery perks

Jul 6, 2022, 12:16 PM
FILE (Photo by Leon Neal/Getty Images)...
FILE (Photo by Leon Neal/Getty Images)
(Photo by Leon Neal/Getty Images)

(CNN) — Amazon Prime members in the United States can now get free meal deliveries through Grubhub as part of a growing business partnership between the two companies.

The deal, announced Wednesday, will give Amazon’s paying subscribers the option to sign up for a free one-year Grubhub+ membership (normally $9.99 a month) and receive unlimited free deliveries when they order from restaurants listed on the service.

At the same time, Amazon could become a stakeholder in Grubhub’s business. Amazon has the option to take a 2% stake in Grubhub, with the possibility to acquire up to 15% if certain business performance conditions are met, according to an announcement from Grubhub’s Netherlands-based parent company, Just Eat Takeaway.com.

For Amazon, the tie-up has the potential to broaden the appeal of its Prime service, which now costs $139 annually. It also helps bolster its meal delivery effortsAmazon announced in 2019 that it was shuttering its short-lived restaurant delivery service in the US that delivered food to Prime members.

“Amazon has tried to build its own third-party food marketplace for years and did not have much success,” Ralph Schackart, an analyst with William Blair, wrote in a research note Wednesday. “Today’s announcement looks like a potential partnership approach to establish itself back in the space.”

Shackart also said Amazon could “look to acquire the Grubhub operations.”

In its statement Wednesday, Just Eat Takeaway.com said it “continues to actively explore the partial or full sale of Grubhub.” Shares for Just Eat Takeway.com, which trade in Amsterdam, surged some 13% Wednesday.

Amazon’s latest foray into the food delivery sector comes as the industry faces new headwinds and a harsher fundraising environment. Demand for food delivery services has fallen sharply as pandemic-related business restrictions loosen and many consumers resume dining out. A labor shortage and ever-evolving regulatory landscape has also hit the sector hard in recent months.

Amazon’s moves could further upend the sector. DoorDash stock fell some 8% Wednesday morning on the news, and has plummeted around 50% since the beginning of the year. Shares of Uber, operator of UberEats, has similarly fallen about 50% in 2022, and slid more than 4% Wednesday morning.

DoorDash still dominates US meal deliveries, with 59% of the market compared to Uber Eats’ 24% and Grubhubs’ 13%, according to data published last month by Bloomberg’s Second Measure.

The-CNN-Wire™ & © 2022 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

KSL 5 TV Live

Top Stories

Consumer

FILE: Brie Olootu pumps gas at an Exxon Mobil gas station on June 09, 2022 in Houston, Texas. Gas p...
Matt Egan

Diesel slides below $5 a gallon for the first time since March

The national average for diesel dipped slightly below $5 a gallon on Thursday for the first time since March 9, according to AAA.
1 day ago
Maralogo...
KSL TV

Sunday Edition: FBI searches Mar-a-Lago; Back to School preparation and concerns

Sunday Edition explores the FBI’s execution of a search warrant at Mar-a-Lago, former President Donald Trump’s residence in Florida. We also discussed all things back to school.
2 days ago
Raspberry Rally goes on sale in early 2023. (Girl Scouts of the USA)...
Jordan Valinsky, CNN Business

Girl Scouts add a new raspberry cookie to the lineup

The Girl Scouts are adding a new, raspberry-flavored cookie to the lineup.
2 days ago
FILE: Target store shopping carts are seen on Aug. 19, 2020, in Miami, Florida. (Photo by Joe Raedl...
ANNE D'INNOCENZIO, AP Retail Writer

Target takes a hit after heavy discounts to clear inventory

Target has reported solid sales for the fiscal second quarter but its profits plunged nearly 90% because it slashed prices to clear unwanted inventories.
2 days ago
NEW YORK, NEW YORK - FEBRUARY 22: A Home Depot store sign is seen on February 22, 2022 in the Sunse...
MICHELLE CHAPMAN, AP Business Writer

Home Depot posts record profit, revenue; sticks to outlook

Home Depot’s sales rose in its fiscal second quarter, buoyed by continued demand for items related to home improvement projects.
3 days ago
DES PLAINES, IL - APRIL 19:  Kraft's Nabisco-brand Capri Sun Fruit Rolls are seen in a grocery stor...
Eliza Pace

Kraft Heinz recalling contaminated Capri Sun juice pouches

Kraft Heinz is recalling thousands of pouches of Capri Sun after some cleaning solution accidentally mixed with the juice on a production line.
3 days ago

Sponsored Articles

Types of Computer Malware and Examples...
PC Laptops

5 Nasty Types of Computer Malware and Examples | Everything You Need to Know to Keep Your Computer and Family Safe

Here are the different types of computer malware and examples that could potentially infect your computer.
tips how to quit smoking...

7 Tips How to Quit Smoking | Quitting Smoking Might be One of the Hardest Things You Ever Do but Here’s Where You Can Start

Quitting smoking cigarettes can be incredibly difficult. Here are 7 tips how to quit smoking to help you on your quitting journey.
Photo: Storyblocks...
Blue Stakes of Utah 811

Blue Stakes of Utah 811: 5 Reasons To Call 811 Before You Dig When Working in Your Yard

Call before you dig. Even at home, you could end up with serious injuries or broken utilities just because you didn't call Blue Stakes of Utah 811.
Days of...
Days of '47 Rodeo

TRIVIA: How well do you know your rodeo? Take this quiz before you go to the Days of ’47!

The Utah Days of ’47 Rodeo presented by Zions Bank is a one-of-a-kind Gold Medal Rodeo being held July 20-23, 25 at 7:30 PM. The Days of ’47 Rodeo How well do you know your rodeo trivia? Take the quiz to test your know-all before heading out to the Days of ’47 Rodeo at the […]
cyber security through multi factor authentication setup...
Les Olson IT

How multi factor authentication setup helps companies stay safe

Multi factor authentication (MFA) setup is an important security measure that every company should implement for their workers. It’s also wise to install it for your personal and home accounts.
...
Lighting Design

Check out these stunning lamps with stained glass shades

Lamps with stained glass shades are statement pieces that are more than simply aesthetic. They also meet a functional requirement: to light up a room.
Amazon partners with Grubhub to offer Prime customers meal delivery perks