Amazon Adds Grubhub Food Delivery Service to Prime Membership

[Image source=AP Yonhap News]

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Amazon, the world's largest e-commerce company, is partnering with Dutch food delivery company Just Eat to add food delivery services to its paid membership service, 'Prime.' Amazon is also investing in Just Eat's food delivery service Grubhub, drawing attention to whether the food delivery market, which has been declining since the COVID-19 pandemic, will undergo changes.

According to the Wall Street Journal (WSJ) and others on the 6th (local time), Amazon announced that it has reached an agreement with Just Eat Takeaway to add Grubhub to the Prime service in the United States. As a result, U.S. Prime members will become Grubhub members free of charge for the first year, receiving waived delivery fees when ordering from certain restaurants, along with other discount benefits. After that, a monthly fee of $9.99 will be required to continue using the service.

Just Eat stated that through this agreement, Amazon has secured an option to purchase a 2% stake in Grubhub and may acquire up to 15% of the company’s shares depending on Grubhub’s subscriber growth performance. Just Eat still owns Grubhub but is continuously exploring options to sell all or part of the business.

WSJ interpreted this move as Grubhub leveraging Amazon’s membership program to expand its subscriber base. Amazon plans to further expand food-related services through its Prime membership. Amazon has been offering discounts to Prime members when shopping at its premium grocery chain, Whole Foods Market.

Founded in 2004, Grubhub once became the largest online food ordering platform in the U.S., but since 2018, it has fallen to third place behind DoorDash and Uber Eats. Following the announcement of the agreement between Amazon and Grubhub, Uber’s stock price dropped more than 3%, and DoorDash’s stock price fell by as much as 9%.