Food delivery workers travel on bicycles along a street in New York, United States, on Tuesday, March 17, 2020.
Depetrius Freeman | Bloomberg | Getty Images
Amazon on Wednesday agreed To acquire a stake in Grubhub as part of a deal that will also give Prime members a one-year membership to the food delivery service.
Partnership gives Amazon the option to acquire a 2% stake in Grubhub, the US subsidiary of Just Eat Takeaway.com, the European food giant He said. Amazon will be able to increase its total share of Grubhub to 15% depending on certain performance factors, such as the number of new customers added.
News of the deal sent shares of the delivery platform down. Uber shares are down more than 3%, and DoorDash shares are down 9%.
Amazon is sweetening the perks of its Prime program, which has more than 200 million members and already includes some food-related benefits like grocery discounts at Whole Foods. Prime members will now be able to forgo delivery fees on some Grubhub orders and access other benefits of the Grubhub loyalty program at no additional cost.
“The value of the Prime membership continues to grow with this offer,” said Jamil Ghani, Vice President of Amazon Prime. in the current situation.
The agreement comes as Netherlands-based Just Eat explores selling Grubhub amid pressure from investors to improve its business. Just Eat stock is down more than 60% this year.
Amazon has previously experimented with adding food delivery benefits to Prime. In September, it announced a partnership with European delivery company Deliveroo that would give Prime members in the UK and Ireland access to Deliveroo Plus for one year. Amazon acquired a stake in Deliveroo in 2019.
Watch: Andy Gacy’s priority is to chart the next generation’s path for growth, says Madrona McLaughlin
