In a strategic move, Uber announced its plans last week to acquire alcohol delivery service Drizly for $1.1 billion, further expanding Uber’s revenue and service mix. About 90% of the deal will be paid to Drizly stockholders in the form of Uber common stock, and the remainder will be paid in cash. The acquisition is subject to regulatory approval, and is expected to close in the first half of 2021.
About Drizly
Launched in 2012, Drizly is the largest online marketplace for alcohol in North America. The alcohol delivery service is now available in more than 1,400 U.S. cities, working with thousands of beer, wine and spirits merchants to provide customers with a wide range of products as well as competitive and transparent pricing. Drizly will continue to operate through its own app and will eventually be integrated into the Uber Eats app.
Through the acquisition, Drizly will expand in business sector that is growing rapidly. Uber’s mobile marketplace and food delivery and ridesharing platforms will help Drizly reach a new customer base. Delivery drivers will have more opportunities to earn money, and Uber’s rewards and subscription programs will give provide more value for customers through Drizly.
Eats Pass subscription
Uber offers a subscription program – Eats Pass – through Uber Eats. For $9.99 a month, Eats Pass subscribers pay $0 in delivery fees and get 5% off eligible orders over $15. The deal is available at thousands of participating restaurants in the U.S. and Canada, who are marked in the Uber Eats app. Eats Pass offers a 30-day free trial, and subscribers can cancel at any time. Last year Uber acquired Postmates in a $2.65 billion all-stock deal, expanding its merchant and customer base. This could expand the Eats Pass program with Drizly as another bonus for Eats Pass subscribers.
Uber CEO Dara Khosrowshahi remarks on Uber’s acquisition of the alcohol delivery service.
“Wherever you want to go and whatever you need to get, our goal at Uber is to make people’s lives a little bit easier. That’s why we’ve been branching into new categories like groceries, prescriptions and, now, alcohol. Cory and his amazing team have built Drizly into an incredible success story, profitably growing gross bookings more than 300 percent year-over-year. By bringing Drizly into the Uber family, we can accelerate that trajectory by exposing Drizly to the Uber audience and expanding its geographic presence into our global footprint in the years ahead,” said Khosrowshahi.
Drizly co-founder and CEO Cory Rellas also comments on the deal.
“Drizly has spent the last 8 years building the infrastructure, technology, and partnerships to bring the consumer a shopping experience they deserve. It’s a proud day for the Drizly team as we recognize what we’ve accomplished to date but also with the humility that much remains to be done to fulfill our vision. With this in mind, we are thrilled to join a world-class Uber team whose platform will accelerate Drizly on its mission to be there when it matters—committed to life’s moments and the people who create them,” Rellas said.
Uber partners with Nimble for pharmacy delivery
In related news, in late January, Uber announced that it was partnering with Nimble to provide prescription delivery in New York City. This is an expansion on a prescription delivery pilot program that was initially tested in Dallas, Austin and Houston, Texas.
“At Uber, we’re hard at work making Uber Eats your go-to destination for much more than food from your favorite restaurant, corner store, or grocer. Today I’m excited to announce that we’re one step closer to delivering that reality to our consumers everywhere with the launch of on-demand prescription delivery in the US, powered by our partner Nimble,” said Kiran Vinta, Uber’s U.S. GM for New Verticals. “Now more than ever, people are looking for ways to safely and conveniently get the things they need, and we’re proud to bring the very best parts of Uber to prescription delivery.”
Expanding alcohol delivery service market
The alcohol delivery market is expanding, particularly as the pandemic continues into a second year. In November, online delivery company GoPuff agreed to buy adult beverage retailer BevMo for $350 million. Named to CNBC’s 2020 Disruptor 50 List, GoPuff operates more than 200 micro-fulfillment centers which serve more than 500 cities across the country. The company specializes in quick-turnaround deliveries, including late night delivery and 24/7 service in some markets, on a variety of consumer products including everyday essentials like groceries and cleaning supplies to snacks and drinks.
Insider Take
While not always successful, Uber has always been innovative in looking for new opportunities for growth. The company is primarily known for its ridesharing service, but the company also offers software solutions for public transportation, freight and logistics, Uber Eats, and a bike and electric scooter program. Uber’s strategic acquisitions of Drizly and Postmates and its partnership with Nimble will help Uber in better serving its customers by taking advantages of service gaps and the growing demand for convenience and door-to-door delivery. We wonder what will be next.
