The giant and popular e-commerce company, Amazon has signed a partnership agreement with Grubhub after several trials to expand its food delivery services. In the year 2015, Amazon announced making a restaurant delivery through Prime Now, its one-hour delivery app.
The company began to staff workers for the new restaurant division in Seattle to compete with food vendors like Grubhub amongst others. The service is to grant access to Amazon Prime members to have access to the menu and place an order from the app.
Importance of Prime-Now
The application enables customers to track their orders from the preparation stage and through the carriage to the delivery point. Every ordered meal is delivered to the customer within one hour without delivery or extra charges. As of November 2019, Amazon Prime hit a major setback that led to the closure of Amazon Prime in London.
The high level of competition amongst local rivalries like Grubhub, Uber Eats, DoorDash, and Deliveroo led to this drastic action. Also, Amazon refused to establish its significance in restaurant delivery in both the market share and consumer mindshare. The closure led to the company’s intense focus on growing groceries.
Amazon Alliance With Grubhub
Amazon becomes a stalk holder and signs a partnership deal with Grubhub. Its new approach to partnering with the US subsidiary of Just Eat Takeaway (JET), is to render an exclusive offer to its prime service and to encourage more sign up.
In regards to this, Amazon has a right to a 2% stake in Grubhub. This will enable the giant e-commerce company to increase its stake by 15% relative to the increase in numbers of new customers and performance. The news of the partnership reduced the share of delivery of rivalry platforms.
Uber stock reduced by more than 3% while DoorDash shares fell as much as 9%. Amazon is increasing the perks of its Prime services which consist of over 200 million with food benefits and discounts for whole food. As part of its initiatives, Prime members will worry less about the delivery fees on orders from Grubhub and free access to its loyalty benefits programs.
Statement From the Vice President of Amazon
The vice president of Amazon, Jamil Ghani, in a statement said “the value of a Prime membership will continue to grow with this offer”.
Ariella Kurshan, the senior Vice President of growth of Grubhub says the company’s partnership with Amazon will transform lives by providing exceptional preference and convenience. However, this is not the first experience of Amazon teaming up with other delivery companies to make life better for Prime users.