Devoured

Amazon shuts down "Amazon Restaurants" — Grubhub celebrates with 8% jump

Snacks / Wednesday, June 12, 2019

Apparently Amazon fails at some things... The company's restaurant delivery service, uncreatively-named Amazon Restaurants, will end on June 24th — The 1-hour meal delivery for Prime members is over. Now "Restaurants" gets to join the rarely-discussed club of Amazon un-successes:

  • Amazon Fire: A smartphone. 2014-2015. RIP.
  • Destinations: An attempt to get into the travel bookings game. Shut down the year it launched.
  • Dash Buttons: $5 gadgets you press to auto-order more things, like Tide. Barking at Alexa turned out to be easier.
  • And now, Amazon Restaurants: It was tiny — Just 20 cities and 2% of the overall market.

90% of the food delivery market... is devoured by 4 companies: Grubhub, Uber Eats, DoorDash, and Postmates. Word that Amazon canceled its delivery plans popped Grubhub shares 8% Tuesday (shares of the others are either private or complicated by Uber's ride-share majority business). Amazon's not completely out, though — Last month it led a $575M investment in UK-based deliverer Deliveroo.

Amazon clearly didn’t promote Restaurants enough... And we found a key example that highlights that: Fast food partnerships. Uber Eats delivers for McDonald's, DoorDash has Wendy's, and Grubhub handles Taco Bell. Amazon didn't invest in driving growth to its own service, so it'll invest in startups to do that instead.

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